Finance Diary December 1978

The Irish Central Bank is in an invidious position as its power to act is severely circumscribed by the punt's link with sterling. Thus interest rates and, to a lesser extent, the money supply, is dictated by London.

The Centra! Bank has, however, invented a few methods of its own, one of which is art arrangement whereby money brought into the country by banks in Ireeland is controlled by demannding that half of it be frozen in the Central Bank. This, however, is largely acting the mad hatter. Success in restriccting capital inflows will do nothing more than force the Irish Government to find the £200 million which the Cenntral Bank itself forecast will be lost on the Balance of Payyments this year by borrowing abroad unless external reserrves are run down.

It does seem a bit peculiar, too that the Central Bank should have allowed credit rip this year and then express surprise at the size of the growth in consumer demand. Imposing a severe credit squeeze on personal lending last month, the Bank stopped in to slow down the 40 per cent rate at which this lendding had been growing. It is hoped that the Central Bank has got its Balance of Payyments forecast right but with the trade deficit £150 million up in the first ten months and getting worse, it is likely that the year's figure will be £300 million, after last year's £120 million deficit.

When Torty O'Reilly bought control of the Independent newspapers five and a half years ago, one of the rumours at the time was that he would sell the very valuable site in Middle Abbey St. and move out to a new location in the suburbs or perhaps do li deal with Smurrfit on a new automated prinnting operation.

Nothing ever came of this and the Indo is still using the old letterpress printing sysstem. However with the currrent boom in property values, things could be changing. The Indo had, for example, an old store down in Upper Liffey St. which it recently put on the market.

This store has 7,500 sq. ft. with a 40 ft. frontage facing right on to the site where Marks & Spencers is currently building. The selling agent was naturally Hugh Hamilton, an Indo director, and he did well to get £263,000, an exxtremely good price and one that must well make him wonder just how much he could now get for Indepenndent House.

One of the most successsful quoted companies in Ireland today is Doreen Holldings, the company headed up by that car buff, Cecil Vard, who has stuck loyally to his now 21-year old Vauxxhall although he does. have a little Porche as a second string stand in.

Doreen Holdings was set up 32 years ago and named after one of the family. It grew slowly during the 50s and 60s making ladies outerrwear clothes. It was really only in the early seventies when Doreen took over Jack Toohey, an exporter of ladies raincoats, a company larger than Doreen itself, that things really started to happen.

Since then, profits have more than quadrupled to over £1 million and now the group is moving again on a big scale to expand its Irish retail diviision, . the ten-store Macey's chain, into the UK. This is an expensive move costing £1.5 million, paid mostly in cash.

The company now being taken over is called John Barrie. It controls 30 shops in the Midlands and North West of England and is budgeting for sales this year of £5 milllion and a net profit margin of 5 1/2 per cent in order to give profits of £275,000. The most extraordinary thing about this deal however is that our semi-State bank, The Industrial Credit Co., is giving Doreen £1 million cash to buy this UK store chain, hardly what you would call in the cause of job creation in Ireland.

Updating the 1893 Sale of Goods Act with the Sale of Goods And Supply of Serrvices Bill currently going through the vail will immprove consumer protection but will not fill all the gaps. Buyers of goods on HP, who up to now have had no prootection because they did not have legal ownership, will now be covered. The public will also get some extra prootection against crooked second hand car dealers.

In future, all motor dealers, when selling a second hand car, will have to give the buyer a "certificate of road worthiness". This, however, only states that the vehicle is fit for road use, hardly commprehensive protection for innnocent buyers.

On a recent sample survey, the British Office of Fair Trading came up with the startling results that 874 of the 1 ,614 cars checked had had their milo metres wound back. As almost one-third of private cars are now leased to very high mileage drivers like salesmen, the chances of coming across one of these cars increases every day. It is not at all unusual for these cars to do 30,000 miles a year but you will not find many with this on the clock. The new Bill will not change this situation but it could easily have included a high statuutory fine on anyone caught tampering with a milometre, and perhaps bar those guilty from trading as motor dealers.

Although the Dublin Corrporation does not seem to have made any effort to find an alternate site to Wood Quay for its new civic offices, there are now two other lots on the market downtown.

One of these sites is in Amiens St. It is just up the street from the new Irish Life centre and right next door to CIE's Connolly's Railway Station with road access to the southside facilitated by the new Liffey Bridge.

The site covers 76,000 sq. ft. and already has planning permission for four separate office blocks, which in total would give 108,000 sq. ft. of office space. The tender date for the site closes on Decemmber 14.

Not far away, Williams & Woods has for a long time been trying to sell its disused space up in Parnell St. facing Irish Life's new Moore St. deevelopment. This covers a far bigger area, so if the Corporaation thought the very accesssible Amiens St. site was too small then it could build there.

The developer, Hardwicks Ltd., run by the late Monntague Kavanagh, bought the Willwood site four months ago for £750,000. It is.preepared to sell to the Corpo but no doubt will be looking for around £1 million. Both these sites are already cleared, so the argument that moving from Wood Quay would cause delay, is nonsense .•