2009 PROVES A HOSTILE ENVIRONMENT FOR KINGSPAN - 'Hostile' is how building products group Kingspan has described economic conditions in 2009. The company says its full year profits before tax are down 17% at €56.7m while its operating profit dropped 60% to €62.7m
Kingspan's chief executive Gene Murtagh said last year the firm experienced a set of global challenges never encountered before, but that there is tangible evidence of stability emerging. He says there was a notable improvement in the last quarter of 2009 and adds that order intake - a key indicator of the first three months of 2010 - has been positive. He says that the markets of mainland Europe probably held up the best last year - the Netherlands, Germany and Belgium all fared pretty well. In Australia, where Kingspan has a small base, was also quite positive 'relatively speaking'. He adds that the weaker markets are in the UK and the US - the company's biggest.
During the year, Kingspan streamlined its operations and its CEO today says that most of that work is now complete. He says a firm comes to a crossroads where it has to ease back on the cost reductions and start to get the business back into constructive growth mode again. That is where Kingspan finds itself at the moment, but Mr Murtagh says that he can not rule out any more jobs cuts in Ireland.
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40,000 MORE CONSTRUCTION JOBS TO BE LOST THIS YEAR - The annual report from quantity surveyors Davis Langdon PKS says employment in the construction sector is down by 130,000 since 2007 and 40,000 more jobs will be lost this year. It says tender prices fell by 16%t last year, and could fall by another 6% this year. Tender prices are now at levels not seen since the late 1990s.
The firm's managing director Norman Craig says that total construction output could fall by up to 23% in 2010, which will have a devastating effect on employment levels in the industry. Mr Craig states that the industry is in 'absolute turmoil' at the moment and he urges the Government and all concerned bodies to come together to try and create a vision for the industry. He says that new stimulus programmes should be looked at, as well as the possible appointment of a chief advisor to try and bring the public and private sector together.
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MORNING BRIEFS - Britain's biggest insurer Prudential has suspended its shares after agreeing to buy AIG's Asian life insurance unit for about $35.5 billion. The deal will help the US government get back billions of its bailout money. AIG is nearly 80% owned by the US government after a $182.3 billion bailout. It will pay the Federal Reserve Bank of New York $16 billion from the deal proceeds.
*** Another report, from CB Richard Ellis, says that while conditions remain challenging in the property market, there are some encouraging signs of stabilisation in terms of rents and yields. It says though that because the vacancy rate in Dublin is high at 23%, continued inward investment and significant indigenous requirements will be required to absorb the current overhang of office accommodation.
*** In its Bankwatch survey out this morning ISME, which represents small firms, says that bank lending has deteriorated and there is clear evidence that banks have 'shut up shop'. It says over half of businesses, 55%, were refused funding in the last three months. It says business closures and job losses are directly linked to lack a of credit and that Government intervention required to save thousands of businesses.
*** On the currency markets, the euro is trading at $1.3611 cents and 89.84 pence sterling.
