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News : Irish Last Updated: Mar 15, 2013 - 9:00 AM

Friday Newspaper Review - - Irish Business News - - March 15, 2013
By Finfacts Team
Mar 15, 2013 - 8:57 AM

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The Irish Independent reports that the health service had to pay out as much as €1.3m last year in compensation to its own staff who were injured on the job.

The State Claims Agency, which handled the cases, did not elaborate on the injuries or the number of employees but the main events reported annually involve slips, trips and falls.

There were 85,918 incidents involving staff and members of the public logged by the State Claims Agency in 2011.

Around one in three of the incidents, which would have included near misses, involved slips, trips or falls, said the Health Service Executive (HSE).

"The impact of a slip, trip or fall can vary from a minor cut or bruise to more severe implications. Healthcare services have a range of policies in place to minimise slips, trips and falls, focusing strongly on staff training. Patient mobility assessments are carried out and assessments of the physical environment," the HSE said.

The HSE recently issued a circular to staff on the prevention and management of stress in the workplace, saying it recognised it as a health and safety issue.

The Irish Independent also reports that exports plunged 12pc in January as sales of chemicals and pharmaceuticals dived, new figures show.

Trade exports fell to €6.8bn in January from €7.7bn in the same month last year as demand for some chemicals plunged by a third and exports of medical and pharmaceutical products fell by a fifth.

Irish exports have see-sawed in recent months as important drugs such anti-cholesterol treatment Lipitor saw their patents expire – pushing down the value of Ireland's exports and highlighting the sector's dependency on a relatively small number of products.

"The expiry of patents in certain pharmaceutical products is impacting negatively on output," said Merrion Stockbroker's Alan McQuaid.

While the so-called patent cliff is pulling down export numbers, it will have little effect on the real economy because the sector employs relatively few people, said Davy Stockbrokers wealth manager David McNamara.

Pharmaceuticals accounts for 10pc of GDP but employs just 22,000 people.

Imports also declined in January, falling 1pc to €4.4bn year-on-year.

The CSO also said yesterday that it was revising down the overall trade surplus for 2012 to €42.8bn. The new figures suggest the surplus fell last year from the previous year. Preliminary figures had suggested 2012 was a bumper year for the economy.

In more bad news, Ernst and Young's latest report on the European economy cut its GDP forecast for Ireland ten-fold.

The accountancy firm says it expects the economy here to grow a puny 0.1pc rather than the 1pc it forecast three months ago.

Ireland has made a lot of progress since the start of the financial crisis but that short-term growth prospects are still weak, Ernst & Young said. It says we should start to see sustainable growth of 1.9pc in 2014, accelerating to 2.5pc in 2015.

Ernst & Young economist Marie Diron said Wednesday's sale of 10-year sovereign bonds contributed to its prediction for growth in 2014.

"The success of the 10-year bond issuance by the Irish Government is very good news for the economy. It is further evidence of investors' confidence in the sustainability of public finances and cements Ireland's restored access to financial markets. Similarly successful bond sales would encourage rating agencies to upgrade Ireland's credit rating. Achievements such as this is one of the main factors behind our forecast of a return to solid growth from 2014 onwards."

The forecast says that unemployment levels in Ireland are predicted to remain at high levels in 2013 (14.9pc), before we start to see a modest improvement to 13.8pc in 2015.

However, it says that productivity has improved since 2008 because Irish output has not fallen as quickly as employment, similar to the productivity boost evident in Spain and Portugal.

The Irish Times reports that Ireland’s issuance of its first long-term bond since being bailed out is an important step towards qualifying for help from the ECB’s bond-buying programme, European Central Bank governing council member Panicos Demetriades said.

The Cyprus central bank governor said euro zone economic recovery was holding to its projected path and the Italian election stalemate had not increased risks to growth.

His comments came as Spain held an unscheduled auction of 10-year bonds following the success of the Irish transaction.

The Spanish treasury sold €803 million of paper due in 2029, 2040 and 2041 – less than recent issues of the same bonds but at lower yields. No target amount had been set for the auction.

“It looks like a decent set of auction results,” rate strategist at Rabobank Lyn Graham-Taylor said. “The size was roughly as anticipated and obviously it was always going to go well given that it looks like this was a request from primary dealers.”

Less upbeat

Other analysts were less upbeat.

“Given that Spain issued bonds with longer maturity they had to give investors some discount and there was not a strong demand for those bonds. It shows that Spain can outperform Italy but it’s not easy even for them to issue long-dated bonds,” said Alessandro Giansanti, rate strategist at ING. Ireland on Wednesday issued its first benchmark 10-year bond since its EU/IMF bailout, a landmark on its route to becoming the first bailed-out euro zone country return to full market funding.

With an order book around €13 billion and 400 accounts bidding, bond analysts Glas noted demand was “impressive”, with 82 per cent being placed internationally.

The yield on the 10-year paper, which was within striking distance of 14 per cent back in July 2011, was 4.15 per cent at the auction.

The debt sale takes Ireland closer to meeting the rules for the ECB’s yet-to-be-activated bond-buying programme, dubbed Outright Monetary Transactions (OMT), but not fully there, Mr Demetriades said.

“It is an important step toward fulfilling the conditions for OMT,” he said, sitting by a coffee table in his office.

“But for full market access, one needs to look at the entire broad range of maturities.”

Mr Demetriades dismissed the view that the ECB might want to keep the programme – which has imposed market calm since it was unveiled in September – exclusively for large countries, especially Spain and Italy.

“We don’t design programmes for specific countries. OMT was not designed for large or small countries,” the former professor said.

“Once a country fulfils the requirements of the programme, then its size shouldn’t work against it or for it.”

Holger Schmieding, an economist at Berenberg Bank said yesterday Ireland should offer to exit the current bailout programme before it is due to expire at the end of the year in return for an extension of its loans.

“For the German Bundestag, authorising an ESM credit line to Ireland to replace the remaining tranches of the current support programme would be much easier than to simply grant an Irish request for more generous terms on the official support loans,” he said in a note yesterday.

“Ahead of the German election, chancellor Merkel could celebrate an early exit of Ireland from the EU-IMF credit programme as a clear success. ’’

In a note to clients, Irish stockbroker Goodbody said Ireland’s bond sale “opens up the possibility” that the country may not draw down the remaining €11 billion of bailout funding and “instead fund it in the market”.

The Irish Times also reports that these are tough times to be starting a business anywhere, but you would need a special brand of foolhardiness to dip a toe in the rapidly contracting health insurance market.

In a perfect storm caused by rising premiums and falling personal income, the sector is haemorrhaging customers – almost 200,000 in the past five years. Many of those still hanging on to their insurance have downgraded their cover. The trend seems set to continue as levies increase and medical inflation gathers pace.

Add to this the uncertainty surrounding Minister for Health James Reilly ’s plans for universal health insurance. Talk of cutting waiting times for public patients is admirable, but if achieved, what is the point of having private health insurance?

Yet into this turbulent scenario a new provider, Glo Health, opened its doors last July. And far from being beaten down by the prevailing gloom, it appears to have carved out a useful starting niche for itself.


Jim Dowdall, co-founder and chief executive of Glo, allows himself a modest pat on the back before getting onto the traditional sport of the private end of the health insurance market – bashing the VHI.

Glo, he says, has enjoyed “phenomenal success” since it started, with more than 40,000 people switching from other providers. The number sounds impressive but, in a market of 2.1 million subscribers, it amounts to a share of less than 2 per cent.

Still, it compares well to the start-ups by two previous entrants to the market, Vivas Health and Bupa, which attracted 12,000 customers each in their first year in operation.

“These numbers demonstrate to us that customers are crying out for alternatives that add value. They’ve voted with their feet,” enthuses Dowdall, a veteran of the sector as a former chief executive of Aviva Ireland.

In the corporate market, Glo has managed to persuade 32 companies to switch from existing providers. One of them is Facebook which, in a substantial early fillip, came over on Glo’s first day in business.

The company now employs 50 people, with a number of senior appointments, including a new head of claims, due to be made shortly. Having outgrown its original premises, Glo recently moved to a new building in Sandyford.

Dowdall says he and his partners spent 15 months researching the market before deciding on their product offering.

“We saw there was a gap in the market for real innovation, better value and policies that were more relevant to what people wanted.”

The health insurance sector has only four players, he points out, whereas up to 15 sustainable, profitable companies are to be found in other insurance sectors.

The Irish Examiner reports that the financial woes of Bill Cullen, once the country’s best known car dealer, continue.

The five-star Muckross Park Hotel, in Killarney, Co Kerry, co-owned by Mr Cullen and his partner Jackie Lavin, has gone into receivership.

Declan Taite, of RSM Farrell Grant Sparks, has been appointed receiver and manager to Muckross Park Hotel Ltd, Boisdale Holdings Ltd, Silvermire Properties Ltd and certain assets of William Cullen, it was confirmed yesterday.

Bill Cullen and Jackie Lavin said they were very shocked by the “aggressive actions’’ of ACC who had moved against the business with no prior warning.

“Only six weeks ago, they [ACC] were congratulating us on an amazing turning around of the business into profitability and said we were an example of how to turn around a business into a major success,’’ they said.

The couple also said they would do everything in their power to maintain the 105 jobs in the hotel.

Last October, Ulster Bank appointed a receiver to Glencullen Holdings, which operated Mr Cullen’s two remaining car dealerships, in Swords and Liffey Valley in Dublin, with the bank reportedly owed around €12m

In a statement, meanwhile, the receiver’s team and Muckross Park Hotel management said the receivership would not have any impact on current or future bookings.

“The receiver will continue to trade the hotel as normal and maintain employment in the area. All deposits and gift vouchers will be honoured as heretofore,’’ it added.

“It is intended that the hotel will continue to grow its business and revenue over the course of the receivership.”

The celebrity couple acquired the hotel, on the edge of Killarney National Park, in 1990, and invested millions in upgrading it.

Accounts filed in Aug 2012 showed that Mr Cullen, who fronted TV3’s The Apprentice, has ploughed almost €10m into the hotel, including €349,061 in 2011.

The couple had at all times remained upbeat about the hotel and predicted profitability going forward.

Well-known Killarney hotelier Michael Rosney, spokesman for the Kerry branch of the Irish Hotels Federation, said it was a shame that such a fine operation should run into such financial difficulties.

“This is probably symptomatic of the economy in general right now,” he said.

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