Foreign investors zone in on profitable firms
Published 25/03/2013 | 05:00
FOREIGN investors are buying fewer Irish companies but looking for ones that are making money as they shift their focus from loss-making bargains to profitable firms, according to a survey from Barclays Bank.
The average profitability of companies where shares changed hands in Ireland in the second half of 2012 was €4.4m, according to the second edition of the Barclays Entrepreneurs Index published today.
By comparison, companies whose shares changed hands in the same period in 2011 reported average losses of €1.28m.
The study looked at Irish businesses with turnovers of over €5m and less than €250m.
Investments were primarily focused on the finance, industrial and technology sectors in the second half of 2012 and there was a significant drop in investment in the retail and property sectors. The number of companies attracting foreign investors slumped 37pc to 311 in the second half, Barclays added.
"We have watched with interest how the picture for businesses in Ireland and the UK has shifted," said Pat McCormack, who is head of wealth and investment management at Barclays. "In Ireland the focus for entrepreneurs is shifting to growth companies."
Barclays employed Ledbury Research to look at the annual returns of all companies in the UK and Ireland and analysed private companies that had changed the details of their shareholders over relevant reporting periods.