Morning business news - May 21Tuesday 21 May 2013 10.39
GREENCORE CEO BELIEVES GLOBAL TAX LAWS WILL BE TIGHTENED UP - Global tax law is going to become an area of much greater focus and will be tightened up. That is according to Patrick Coveney, the chief executive of Greencore and former head of the Dublin Chamber of Commerce. "One of the things that I find a little ironic is that it's the politicians in all of these countries that have put in place these tax treaties, and legislated for the tax structures that exist around the world. Frankly I find it a little bit frustrating that it's then them who pile in and criticise internationally traded businesses who are merely availing of the tax environment put in place,'' Mr Coveney said.
"My sense is that the sentiment coming out of the G8 countries is to tighten up tax law somewhat, but I think they have to do that and then implement it, rather than expect that companies all over the world are suddenly going to not avail of the tax environment that's been put in place by the legislators across the developed world,'' he added.
Mr Coveney said that at the moment the focus and scrutiny is on the company rather than the jurisdiction, but he thinks that will "bounce around a bit" depending on the audience and the issues of the day.
Hit by the horsemeat scandal earlier this year, Greencore results for the first six months of the year, show that its UK ready meals business - which makes up 15% of group revenue - is yet to recover fully from the horsemeat contamination, and is still under severe pressure. Greencore said it expects market conditions to remain tough this year, particularly in the core UK market which shows little or no volume growth. For the first half of its financial year Greencore reported profit before tax 11% lower at £14m sterling, with group revenue up almost 1% at £572.9m.
Mr Coveney said the horsemeat scandal had cost the group £5-£6m of revenue in the first half of the year. It was a significant problem, he said, but was limited to small part of the group. He said group earnings per share were 11% higher in the first six months of the year and that the rest of the economic model of the business was working very well.
On horsemeat, he said he was ''very confident that there's absolutely no contamination within our food chain''. "There is always a moderate level of risk, but we would be very comfortable and can reassure our customers and our consumers that our supply chain in the end was proven to contain no horsemeat whatsoever,'' the Greencore CEO said. Mr Coveney also said that revenues for the US are up 120% and it now represents 15% of the group.
MORNING BRIEFS - Apple has been accused of avoiding billions in taxes around the world by exploiting loopholes and using Irish subsidiaries that are not tax residents of any country. The company's Tim Cook will set out proposals to simplify corporate tax laws when he appears at a hearing of the Senate permanent sub-committee on investigations today. A memorandum to the sub-committee members says that today's hearing will examine how Apple Inc - a US multinational corporation - has used a variety of offshore structures, arrangements, and transactions to shift billions of dollars in profits away from the US and into Ireland, where Apple has negotiated a special corporate tax rate of less than 2%. Apple has a cash stockpile of $145 billion, but the committee said $102 billion of this was held offshore.
*** Glanbia's group managing director John Moloney is standing down from his role at the head of the global dairy ingredients group a year early. In a statement this morning Glanbia says Mr Moloney will be replaced by the current finance director Siobhan Talbot.
*** Vodafone Ireland said its average revenue per user was static at €31.40 in the three months to the end of March. It said that over a million of its 2.2 million mobile customers now use a smartphone - a 29.2% year-on-year increase in smartphones on the network.