GRAFTON SEEING SOME SIGNS OF STABILISATION - Grafton has reported pre-tax profits for last year of €13.6m - down from €64m the year before which represents a fall of 79%. Its revenue fell by 26% to €1.98 billion. The company - which is involved in builders' merchanting, DIY and manufacturing - is still actually profitable and generating cash.
Grafton's chief executive Leo Martin says that trading last year was the most difficult for decades and the company found it very challenging. But he adds that the group overall is profitable, and has managed to generate large amounts of free cash flow, securing Grafton's future within its markets. The company's staff number have dropped by about 2,500 in recent months. Mr Martin says that the staff cuts were regrettable, but that the firm still employs just under 9,000 people across its markets, and the action was essential to protect remaining jobs and the company.
The Grafton CEO says there is a possibility that the current 70/30 split in the business between the UK and Ireland could grow in the UK's favour as the UK emerges from recession quicker, as it appears to be in the early stages of a recovery. But the UK recovery may be bumpy and unstable because of uncertainty around elections and sterling, he adds.
House completions in 2009 were estimated at around 17,000, falling from the peak in 2006/2007 by 90%. Grafton estimates that just 10,000 to 12,000 house will be built in the current year. The business has had to absorb this collapse and has repositioned to take advantage of other markets in Ireland, particularly the repair, maintenance and improvement market, Mr Martin says.
He says that apart from the first two weeks of the severe weather conditions, Grafton has been trading close to expectations, with good increases in the UK new housing sector coming through. He says that a stabilisation started in the second half of 2009 and the rate of fall against prior years has moderated dramatically. He says the company thinks it is close to the bottom and probably at a stabilised base.
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HP SET FOR FURTHER DUBLIN EXPANSION - Hewlett Packard is creating 60 new jobs in Belfield in Dublin. The jobs are in technical support and will look after the computer giant's Northern and Western Europe operations.
Martin Murphy, the managing director of HP Ireland, says that the company benchmarked Ireland against other European locations for these positions and HP Ireland was the most competitive. The company is looking for a combination of technical support and language skills, skills that HP has already identified as important for Irish graduates. The jobseekers will need languages such as French, Flemish, Dutch, Swedish and Norwegian.
Martin Murphy says Irish competitiveness is all about developing talent, and that primary and second level education needs to be improved to create the platform for the jobs that HP is trying to bring to Ireland. On pension changes, he said competitiveness is a very finely balanced equation and the country needs to be very cautious about anything that will add to the cost base.
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MORNING BRIEFS - Today is rates day at the European Central Bank. It is expected to hold interest rates at a record low level of 1% today and to detail the next steps in its gradual withdrawal from emergency lending launched during the financial crisis. We will hear about what changes it plans to make to the extra liquidity it has provided for the banking system, with markets primed for some tightening of conditions - most likely in access to three and six month money.
*** Another of the topics up for discussion will be Greece. It says it is prepared to turn to the IMF if its EU neighbours do not come up with aid after it announced tough austerity measures. George Papandreou, the Greek prime minister, is to meet the German chancellor Angela Merkel in Berlin tomorrow, before meeting Nicolas Sarkozy in Paris and then Barack Obama in Washington next week.
*** On the currency markets, the euro is trading at $1.3660 cents and 90.73 pence sterling.
