Strength of pound worries IWP

TRADING at IWP International is satisfactory this year, but the rising value of the Irish currency on the foreign exchange markets is a concern for the group, according to chief executive, Mr Joe Moran.

Speaking at the company's annual meeting in Dublin yesterday, Mr Moran said the strength of the pound against other European currencies was not working in IWP's favour.

With close to 50 per cent of the group's sales coming from Continental Europe, Mr Moran said the strength of the pound, particularly its sharp appreciation against the Dutch guilder, would reduce the value of its earnings in that market.

The translation costs to the company could run to £1 million over a full year, he estimated. But this would not affect the group's fundamental financial position, he told shareholders.

Mr Moran also complained that Irish interest rates are "too high", saying it was much cheaper for the group to borrow funds in its other European markets. In the Netherlands, for instance, IWP can secure bank funding at less than half the rate of interest available to the group in the Republic. Most of its borrowings in the Netherlands are at a rate of 3.25 per cent, compared with Irish interest rates of around 7 per cent, according to Mr Moran.

The household products, labels and distribution company, is keen to make an acquisition preferably in Britain or Ireland, but opportunities were scarce, he said.

IWP's has recently expanded into Poland through the acquisition of a 60 per cent stake in the household and personal care products company Polbita for £2.9 million. Mr Moran told shareholders at the meeting he had "great confidence" in its future.

IWP reported a 13.4 per cent rise in pretax profits last year to £21.61 million. The group expects a further rise in profits this year.