Morning business news - March 27Thursday 27 March 2014 10.14
Most Irish technology companies are planning to expand their businesses and create jobs this year, according to a new report. Of the 90% of tech firms that plan to expand, two-thirds will fund their own growth, three-quarters are planning to grow their workforce, and 60% are looking to export markets to grow their business. Most see the issue of scaling operations - rather than access to credit - as their main growth challenge. The study was commissioned by AIB, and carried out by Amarach Consulting.
John O'Dwyer, AIB's Head of Technology, Media & Telecommunications Banking, says that the technology sector in Ireland is very vibrant and employs over 100,000 people - 30,000 people are employed in the indigenous technology sector alone. Mr O'Dwyer said the survey reveals a "great, great eco-system" to start a new business, with lots of companies going through accelerator and incubator programmes. Revenues from tech companies are also growing fast, with seven out of 10 companies surveyed reporting a 31% increase in 2013 compared to 2012. He says that some of the scaling challenges come with growing revenues so aggressively and bringing the business to external markets as well as bringing in new people and expertise.
Some respondents to the survey said banks do not understand the nature of their business and Mr O'Dwyer said in order to change this, the bank is launching its dedicated banking division for the technology sector - part of a broader sectoral-led strategy for the bank. He said AIB wants to insure that technology companies have the same chance of getting credit as the "butcher, baker and candlestick maker" .
MORNING BRIEFS - King's stock price fell more than 15% on its first day on the New York stock exchange yesterday, making the Candy Crush game maker the biggest new US listing to drop so spectacularly on its opening day in 20 years. The company raised $500m and according to data from Dealogic, King's opening drop was the biggest first-day fall for any company raising more than $500m since its records began in 1995. Having been priced at $22.50, the shares closed down 15.6% at $19. King's flagship game Candy Crush was the most downloaded free app of 2013 but there have been concerns it relies too heavily on the game and doubts over whether it will be able to sustain its popularity and growth over time.
*** The Irish Dairy Board - which owns Kerrygold - has secured a five-year syndicated loan of €420m to fund dairy businesses expanding overseas as milk quotas end next year. The board has sales of around €2 billion and employs about 3,100 people around the world. It is responsible for exporting about 60% of Ireland's dairy products to over 100 countries. The board also develops specialist food ingredients for many of the world's major food manufacturers.