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News : Irish Last Updated: Mar 8, 2013 - 9:51 AM

Friday Newspaper Review - - Irish Business News - - March 08, 2013
By Finfacts Team
Mar 8, 2013 - 9:47 AM

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The Irish Independent reports that the 'Sunday Business Post' will slash up to a third of the newspaper's workforce and ask remaining staff to accept their third pay cut in as many years if it survives an examinership that started yesterday at the High Court.

The news comes as fears grow for 50 jobs at Webprint in Cork, an outside company that had the contract to print newspapers including the 'Sunday Business Post' and the 'Irish Examiner' for Thomas Crosbie Holdings until the media group that owned the 'Sunday Business Post' went into receivership this week.

That printing contract no longer stands as a result of the receivership.

The chief executive of Webprint, Donagh O'Doherty, could not be reached for comment yesterday.

Accountant Michael McAteer of Grant Thornton was appointed as interim examiner of Post Publishing Ltd, which owns the 'Sunday Business Post' newspaper, at the High Court in Dublin by Mr Justice Peter Kelly.

An interim examiner needed to be appointed straight away so that a newspaper appears this Sunday, the court heard.

Failure to publish an edition of the newspaper would seriously affect the confidence of advertisers and consumers, and could undermine its future chance of survival, the court was told.

There is a reasonable chance that the business can survive following an examinership, if certain conditions are met, the judge said.

"Examinership is desirable and necessary," he said.

The court was told that the Sunday newspaper has a staff of 76 full-time staff and as many as 120 freelance contributors.

Fresh investment in the business will be needed as part of a rescue deal, if the company is to emerge from examinership.

A number of potential buyers have expressed an interest in buying the paper, the company said.

Post Publications has been loss-making since 2009. The loss for 2012 was €1.2m.

The loss this year will be €1.4m but a return to profit is projected for 2014, according to the directors of the business. That will come about as the wider economy returns to growth.

"We don't see much evidence of that in the Commercial Court, maybe outside," Mr Justice Kelly said.


Revenues at the newspaper have halved in the last five years to €7.4m. Income from advertising, a mainstay for newspapers, fell by two-thirds.

The company is almost €600,000 behind on its rent, the court was told.

Landlord Irish Life has only been paid half its €400,000-a-year rent over the past two years, and has unsuccessfully been trying to negotiate a rent reduction.

MR Justice Kelly was told up to 25 redundancies may have to be sought at the newspaper as part of a restructuring.

An independent accountant's report concluded there is a reasonable prospect for the survival of the newspaper as a going concern, providing certain conditions are met, including the support of AIB, which has confirmed it will support the newspaper as the examinership continues.

The appointment of an interim examiner means that staff payments will be honoured, and suppliers will be assured that new contracts will be met.

AIB says it will provide €150,000 in emergency loans to the examiner, that will be needed when the company's own resources are exhausted – probably 13 weeks into the process, the court was told.

A hearing to formally appoint the examiner will take place on Friday next.

The Irish Independent also reports that industrial production fell in January by almost 2pc compared with December and was down just over 3pc over the course of 2012 as pharmaceutical production tumbles.

The contraction in the fourth quarter was more severe than previously thought.

Stockbrokers Merrion said it was also the fourth year-on-year decrease in the past five months.

Alan McQuaid said that manufacturing growth in the short-term was expected to be driven by industries that fall under the 'modern' umbrella.

"Given the still uncertain global economic backdrop, especially in the eurozone and UK, the worry is that overall production will remain subdued in the immediate future, which doesn't augur well for the prospects of Irish exports, an integral part of the country's economic recovery hopes," he said.

But striking a more upbeat tone, Mr McQuaid said that when the world economy regained momentum, Ireland was better placed than most to take advantage of it.

"In February, the NCB Manufacturing Purchasing Managers' Index (PMI) rose to 51.5 from 50.3 in January, with the increase driven by a return to growth in new orders, which had slipped into negative territory for the first time in a year in January.

"We are hopeful that 2013 will be a better year on the economic front, both at home and abroad," he said.

Stockbrokers Davy said that weak demand conditions, and not simply the impact of the pharmaceutical patent cliff, might explain the fall in modern sector output.

"It now appears industry will make a larger negative contribution to GDP growth in Q4 than we had previously thought," chief economist Conall Mac Coille said.

The Irish Times reports that International Monetary Fund managing director Christine Lagarde is to meet Taoiseach Enda Kenny and Tánaiste Eamon Gilmore in Dublin today.

The meeting takes place at Government Buildings and will be followed by a visit to the Central Bank and a lunch event hosted by Ms Lagarde to mark International Women’s Day.

Ms Lagarde’s visit comes after the European Central Bank called yesterday on the Government to step up its banking reforms, with bank governor Mario Draghi urging “further action”.

Mr Draghi was speaking as Central Bank figures showed that while the pace of growth in mortgage arrears is slowing, about 23,500 mortgages have not been paid for two years or more.

John Moran, secretary general of the Department of Finance, told the Public Accounts Committee that the level of repossessions in the Republic was “uncharacteristically low” but that banks should soon be able to “move forward” on tackling problem home loans.

The Republic has a repossession rate of about 0.25 per cent of mortgages, compared with 3 per cent in the UK and up to 5 per cent in the US.

“It’s surprising to us that there are so few repossessions in the system at the moment, given the extent of the crisis,” Mr Moran said. “Ultimately, it is the other people in the country who are paying for these people to stay in their houses.”

Speaking in Frankfurt after the ECB’s governing council meeting, Mr Draghi praised Ireland for its economic progress but said the banking sector was a key concern.

“The Irish Government has undertaken very, very significant progress, very significant results on several fronts... but further action is needed, especially on the banking side, in the financial sector,” Mr Draghi said.

Ahead of her visit, Ms Lagarde told The Irish Times she was concerned about a “relapse” in the global economy.

She also said she wanted to see where Ireland is as it nears the end of its bailout programme.

“I want to understand where the country is – which from the reports I read is a good position – with a programme that is more than on track, with growth that has turned positive for the first time and exceptionally so in comparison to other European and euro area countries,” she said.

“I want to see how we, with the authorities, can best plan for finishing successfully the programme and to make sure that there will not be a relapse.”

The latest Central Bank figures showed that mortgage arrears continued to rise in the last quarter of last year, albeit at a slower pace than in previous quarters. Almost 12 per cent of private residential mortgages were three months behind in payments at the end of December, rising from 11.5 per cent in September.

There was a 14 per cent rise in the number of loans in arrears by more than 720 days, with some 23,500 mortgages falling into this category.

Mr Moran said a “large range of different options” were needed to solve the problem but noted that a workable system was almost in place as the Department of Justice moves to close a legal loophole preventing many repossessions and the new personal insolvency service prepares to launch.

He said it would be “typical” to see a greater incidence of repossession, either through voluntary surrender of a home or through the court system, where the economics of paying a mortgage no longer work.

Repossessions to rise

Mr Moran acknowledged that the rate of repossessions could be expected to rise but added that “we are starting from a base which is uncharacteristically low”.

“Maybe we will move to those levels,” said Mr Moran, referring to repossession rates in the US and the UK. “We have had as serious a crisis as everybody else.”

He said full information on borrowers in difficulty was still unclear, even to the banks themselves, and needed to become more accessible. Options such as deferring repayments on a portion of a loan, or making interest-only repayments could be sufficient to address many problem situations, he said.

AIB said in recent weeks that it would restructure 2,000 loans each month, with other banks also promising greater effort on the issue.

The Irish Times also reports that international Women’s Day tends to concentrate the mind of the business community on the issue of female representation, a process that naturally leads us towards a raft of statistics. Inevitably, some of the numbers will be encouraging, some considerably less so.

Today, on the less heartening side, new research from accountancy firm Grant Thornton tells us that just 21 per cent of senior business roles in the Republic are filled by women and, alas, this is worse than the position four years ago.

The figure, which emerges from research across 100 companies, is flat on 2012. It compares to an international average of 24 per cent, which was three percentage points higher than a year ago. Globally, we’re 36th out of 44 countries surveyed – hardly a cause for celebration.

Sinead Donovan, a Grant Thornton partner, suggests that economic weakness may have left little room for career progression, thus allowing for fewer opportunities for women.

Even with the stagnation however, only about a third of Irish companies surveyed said they would support quotas with respect to the boards of plcs. This matched the global result on this question, which is likely to become a hotter topic the longer female participation at higher levels in business in politics remains a talking point.

One crucial point in the research is that the Republic is ranked lowest on flexible working in the EU, aside from Greece. This translates into 53 per cent of companies offering family-friendly working solutions, compared to an EU average of 74 per cent.

Donovan notes that flexible working is not the only determining factor in growing female participation, with more mature economies where it is embedded not necessarily seeing more women in senior roles.

It is however a start along a road that continues to stretch far ahead, since it can allow women with young children to remain in the workforce even though they no longer wish, or find themselves unable, to work full-time hours.

Figures from Eurostat show 26.2 per cent of Irish employed women (across the public and private sectors) with one child work part-time hours, with this rising to 48.3 per cent with three or more children. The comparable figures for men are 7.9 per cent and 7.7 per cent respectively.

The Irish Examiner reports that following the closure of one of Cork’s best known stores, concerns have been raised that similar outlets will go out of business if shoppers don’t support indigenous retailers.

Fitzgerald Electrical Expert Store on Grand Parade has closed after nearly 90 years in business.

Founded in 1924, the family-run shop prided itself on being a leading supplier of electrical appliances in Cork and throughout the surrounding area.

The store was the first to show colour television in Cork in Mar 1970.

Senator Deirdre Clune (Fine Gael) said she was saddened by the closure.

“This is an extremely difficult time for the family who have a long and proud tradition of trading in their prominent position on Grand Parade.”

Describing it as “a much treasured part of Cork’s retail community,” Ms Clune said she had no doubt that there are many reasons for the decision to close, not least the punishing economic climate Ireland’s retail sector is presently experiencing.

“However, the continuing growth of online retail and large out-of-town warehouse-type shopping has played a large part in the closure of many smaller local businesses,” Ms Clune maintained.

She said most of these large units are not owned by indigenous companies, so people should be considering where they make their purchases in these challenging times.

“If you want local shops on your high street instead of big retailers then people must buy locally and support businesses in their area. This will save local jobs and preserve the strong retail presence in Cork city centre,” the senator said.

“An inviting retail atmosphere has positive knock-on effects with regard to tourism and general footfall in restaurants and shops in the area. The city council has invested and improved the appearance of the Grand Parade to make it an attractive area.”

“There are issues on the Grand Parade, some buildings have been left idle and the variety of shops is not diverse enough to encourage shoppers to visit there instead of the big shopping centres located on the outskirts,” she added.

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© Copyright 2011 by Finfacts.com

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