Morning business news - August 29Friday 29 August 2014 15.05
Eircom has released its results for the full year to the end of June - showing that group revenue was down 6% over the year, to €1.2bn.
Earnings before interest and tax fell by one per cent of €3m to €479m, and that's before storm costs.
Its fixed and mobile customer numbers are at 1.89 million, while the total customer base is 2.3 million. Broadband customer number rose by 7.5% to 718,000.
The company's statement this morning describes the past year as "transformational" for the business.
According to the company’s chief financial officer Richard Moat, the company’s cost reduction programme has been a success, mainly due to a reduction in the number of people working there.
“We’ve achieved €126m in savings over the past two years and that’s come mainly from a 2,000 headcount reduction,” he said.
“We’re announcing this morning that we want to go for a second phase of cost reduction, taking €50m out of the business looking at all areas of expenditure.
“About 60% of that will be reinvested in growth areas but we anticipate significant further savings coming through.”
However Mr Moat said that he did not anticipate any further “significant” cuts to the Eircom workforce as part of this.
“We’re fairly comfortable with where we sit at headcount of 3,500,” he said.
Mr Moat said the company was making progress in its turnaround, with its earnings showing stabilisation around the €120m figure and solid growth in its new products such as fibre broadband, 4G mobile telephony and home television.
He said more customers were also opting for tripe and quad-play bundles of Eircom services.
When asked about the company’s plans for the future, Mr Moat said a strategic review was under way, with another stock market flotation one of the options being considered.
“If we did that we would use the proceeds of a listing to reduce our debt,” he said. “I want to emphasise that at the moment we haven’t taken any decision but we hope that we will resolve the issue before the end of this calendar year.”
Japan's economy has shown signs of stagnation and weakness as households spent less and factory output stayed flat in July.
Official data released today also showed consumer inflation stayed at 3.3% from the month before.
Japan raised its sales tax from 5% to 8% in April so analysts said "real" inflation for July was actually 1.3%.
Japan's economy, which has fallen to the world's third-biggest, suffered from deflation for almost twenty years.
The central bank's current target for the inflation rate is 2%.
Some record share prices have been hit in the US this week - Apple, the world's biggest company by market value - has hit a record price of $102 a share, that's a gain so far this year of 28%.
This week investors were happy with strong iPhone sales in emerging markets and are looking forward to success with the upcoming IPhone 6, which is expected to benefit from strong phone upgrade demand.
This summer Disney's "Guardians of the Galaxy" film grossed the most money of any film at the box office, and as well as good attendance at its parks that saw its shares up 18% this year to $91 a share.
Burger King - in the news this week because of its talks with coffee and donut chair Tim Hortons - it's shares have hit a record price of $33.97, a 31% gain since the start of the year.
And Netflix's new record price is $485 a share, with a 30% gain this year. Earlier this summer, Netflix passed the 50 million subscriber mark.