Raft of upbeat earnings data boosts hopes of economic upturn
IRISH companies ranging from Aer Lingus to DCC have beaten expectations as the earning season gains momentum, adding to the evidence of a broad economic recovery after years of decline.
In a further boost for the economy, figures released by the Central Statistics Office yesterday show Irish exports are at their highest level in a decade.
Analysis of the financial performance of companies listed on the stock exchange and smaller firms which publish their results in Companies Office suggest that 2013 will be the year that many companies turn the corner.
This week, drug distribution company United Drug issued the most bullish forecasts in at least five years when it predicted that earnings will rise as much as 8pc this year following a strong start to the year.
"Recent new business wins, both in the UK and Ireland, should see this performance continue for the remainder of the financial year," the company added.
Last week, Aer Lingus boss Christoph Mueller reported that the airline recently enjoyed the best sales day in its history. It added bookings are strong for the rest of the year – a sign that families and businesses are regaining confidence.
Dublin-listed recruitment company CPL, another good barometer of how companies are doing, recently announced pre-tax profits rose 31pc to €5.9m in the second-half of last year. A day earlier, shares in distribution company DCC rose to the highest levels since 2007 after it told the markets that third quarter revenue and operating profit were "well ahead" of the prior year.
DCC's shares are not the only shares to be doing well at present. The benchmark ISEQ Overall Index is trading at levels not seen since August 2008 and has risen 17.9pc in the last 12 months.
While the evidence from listed companies suggests a revival among larger companies, there are also signs that smaller companies are improving. In Donegal, fish processor Killybegs Seafoods said this week that full-year earnings rose 7pc last year to €4.1m. At the other end of the country, the five-star Cliff House Hotel in Ardmore in Co Waterford reported that profits rose by a third last year as visitors with money to spend flocked to its Michelin-starred restaurant.
In the West, Shannon Development recently recorded the first net jobs gain at the Shannon Free Zone last year for the first time in four years and added that it was "optimistic the Shannon Free Zone has turned a corner".
In the capital, designer Louise Kennedy said recently that results for 2012 show continued growth in exports and profitability. Profits doubled the previous year.
Like many small businesses, Ms Kennedy is embracing exports. She opened shops in Beijing last year. Results also underline the strength of the services industry which is booming thanks to exports.
The services sector expanded at its fastest pace since August 2007, according to the latest figures with company managers reporting an improvement from both domestic and external markets during January. Employment in the sector is increasing at its fastest rate in six years.