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Irish CFOs most optimistic for 5 years

Wednesday, August 13 10:28:30

Ireland's Chief financial Officers (CFOs) are more optimistic about the prospects for their businesses than they've been in the past five years.

A net 62pc of Irish CFOs feel more optimistic about the financial prospects of their company, according to the Deloitte Q2 2014 CFO Survey out today.

This is up from a net 50pc in the first quarter of this year.

Findings also show that a large majority of CFOs (79pc) believe that revenues will increase over the next 12 months. Both capital expenditure and discretionary expenditure are also on the rise - 76pc and 33pc of CFOs respectively expect these to increase over the coming year.

The Q2 survey findings signal for the first time that a majority of the CFO respondents have indicated an apparent increased appetite for risk. Just under two thirds of CFOs (62pc) feel it is a good time to take greater risk onto their company's balance sheet, compared with 29pc in Q2 2013.

CFOs believe that the availability of credit from all sources is improving. For the first time since the survey commenced, a majority of CFOs believe credit to be easily available across domestic and overseas banks, corporate bonds and equity. Most notably there has been a marked improvement in CFOs' perceptions of availability of credit from overseas banks. A net 33pc of respondents now believe credit is easily available from this source, compared to a net 18pc who believed it was hard to get in the first quarter of the year.

Shane Mohan, Partner, Deloitte said that the positive sentiment expressed by CFOs is in line with the majority of respondents who rated the level of external financial and economic uncertainty facing their business as low or normal.

"CFOs reported that they are optimistic about their company's prospects mainly due to external factors the biggest contributor to driving company performance, aside from industry specific demand, is economic growth both at home and abroad. However, importantly, there was an increase in the number of CFOs that feel internal, company-specific factors are also fuelling increased optimism," he said.

"Capital expenditure is on the rise, despite the majority of CFOs indicating that no major equity injections are expected and bank borrowings will decrease or stay the same over the next 12 months. This suggests that organisations will invest cash to support growth, a finding backed up by the fact that CFOs continue to cite a preference for investing as opposed to holding cash this quarter. This, coupled with an increased risk appetite, signals a very real shift in the minds of Irish CFOs - they are forging ahead with growth plans."

Survey results also indicate that the cost and availability of talent is increasingly a key concern and one which is becoming more pronounced for Irish CFOs.

Two out of three CFOs surveyed believe employee numbers will increase over the next 12 months.

However 70pc of CFO respondents believe that talent costs will impede their company's performance over the next year, while 57pc believe talent availability will have a negative impact on performance.

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