KINGSPAN SEES CHALLENGING 2008 - Kingspan says it expects growth in operating profits of 22% for the full 2007 year, over 2006, but the last paragraph of the company's trading statement contains the more pessimistic news that the company expects only mid-single digit growth next year. It says the construction environment in the UK, Ireland and western Europe is more challenging. That is code for looking pretty bad, and as if to confirm that, Kingspan says present market conditions leave it difficult to guide for the coming year.
Construction stock analyst, Florence O'Donoghue of Davy, says that today's trading statement is weaker than had been expected. He says it points to a tougher operating environment for Kingspan in 2008, although results for 2007 will be very strong. After guiding mid-single digit earnings growth for next year, the analyst predicts that the markets will respond negatively. Previous earnings growth forecasts had been pencilled in at the mid-teens level. He points out that shares in the company were down 6% yesterday and says that this bad news - to some extent - had been expected.
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ACCOUNTANTS WORRIED ABOUT NEXT YEAR - In keeping with the downbeat pre-Christmas mood, members of the Institute of Certified Public Accountants, are expecting business conditions to get worse next year. President, of the Institute, Brendan Allen, says that government regulations, cost controls, broadband take-up, interest rates and inflation levels will all feature on accountants' radar. In a quarterly survey taken in the first half of 2007, half of the institute's members felt there would be a disimprovement in the business climate. He says that figure has now climbed to three quarters in its latest December survey. 'Things are not really looking good for Irish business at the present time,' he stated.
Mr Allen says that accountants are in a unique position to judge the business environment as they interface with both small and large businesses. He says they are able to judge the temperature of attitudes to the business environment.
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NO INCREASE IN RATES FROM LIMERICK COUNTY COUNCIL - In an an effort to make life easier for business, Limerick County Council has announced it will not be increasing commercial rates in 2008. Head of Finance at the Council, Oliver Killeen, says that the initiative acknowledges the current climate for businesses and also encourages new businesses to set up in the county. He says he remains very confident about prospects for business in the county and points out the recent good news from the area. These include new connectivity routes for Shannon airport and Dell Ireland's news
*** MORNING BRIEFS - Nintendo Co is having trouble planning for the coming months because of shortages of its Wii video game console. A company spokesman said the level of demand we are facing complicates all of our future business planning. 'All of that becomes a much tougher exercise until we have supply and demand curves that intersect'.
*** The Financial Times reports that the European Central Bank is about to intervene in financial markets again. It says it is to offer unlimited funds at below market interest rates to help head off an end of year liquidity crisis. One analyst is quoted as saying that this is Father Christmas to those who have access. They are bailing out people who have not adjusted to the new reality, he said.
*** It was another torrid day for stock markets yesterday. The Dow Jones in New York finished down over 1% last night which followed a bad day for stock markets across Europe. The Nikkei index of Japanese shares is down slightly this morning. Once again, yesterday was a day of bad tidings for investors in the Irish market. The ISEQ index of Irish shares closed down 2.7% at 6,901.
*** Eurostat, the office that compiles statistics for the European Union, says Ireland is very well-off thank you with gross domestic product per person the second highest in the EU, behind Luxembourg.
*** Gallaghers Bakery in Ardara, Co Donegal has sold a substantial stake in its business to food group, IAWS. A spokesman for Gallaghers says it is a positive move for the company and the jobs of the 160 people it employs are secure.
*** There may be more gold than we thought under the stony grey soil of Co Monaghan. The AGM of Conroy Diamonds and Gold was told yesterday that the level of gold reserves at their Clontibret site was 500,000 ounces, enough to support a mine for at least ten years, according to company chairman Richard Conroy. Production costs would work out at about $300 an ounce, so there is a nice little margin with gold trading currently at around $800 an ounce.
*** Exploration company Providence has announced its to start drilling a new well in the Aje field off the coast of Nigeria.
*** On the currency markets this morning, the euro is trading at $1.44 cents, and 71 pence sterling.
