Concentrix profits plunge as another company 'reconsiders options' after Brexit

FLASHBACK: In April 2014, the then First Minister Peter Robinson and Deputy First Minister Martin McGuinness were at Concentrix as it announced it was creating 1,036 jobs in Belfast as part of a £36m investment
Gary McDonald Business Editor

AMERICAN technology giant Concentrix has seen its bottom-line profits in Northern Ireland plunge in the last trading year, according to figures filed at Companies House.

It raises the spectre that worse may be to come for the company in the wake of Brexit - especially given that its entire multi-million pound turnover is garnered within the European Union.

And it comes as Deputy First Minister Martin McGuinness revealed to the Irish News that he'd been made aware that another major employer - not Concentrix - was "reconsidering its plans" to make the north its European headquarters.

Concentrix is the global business process outsourcing division of the California-based Synnex Corporation, a Fortune 500 company listed on the New York Stock exchange.

It set up its European hub in Belfast in 2011 after it bought Northern Ireland call centre company GEM, and since then it has more than doubled its workforce from around 700 to 1,650.

In April 2014 it unveiled ambitious plans to recruit more than 1,000 staff in a £36 million expansion of its existing operation in Belfast, one of the biggest-ever investments by a US company and described at the time as "unprecedented"

Those jobs are understood to have been hired on target to the three-year plan, which was supported at the time by £3.5 million of tax-payers' money.

And encouragingly the company is also pressing ahead with plans for a new office block near the old Maysfield leisure centre which will accommodate up to 1,600 staff.

But the latest Concentrix results - and given the political climate in the wake of the UK's vote to exit from the single European trading block - are likely to be causing some concern in the corridors of Invest NI.

The company's turnover fell back by nearly eight per cent from £27.7 million in 2014 to £25.5 million last year, the figures show.

And the consolidated profit for the year, after tax, slumped from more than £1.7 million to just £289,000.

Gross profit dipped from £10.1m to £8.8m while profit on ordinary activities before tax was £296,000 against £2.1 million a year earlier.

During the trading period staff numbers rose from 1,445 to 1,651, which in turn saw the overall Concentrix wages bill jump from £22.9m to £29.1m.

The company said the reduced turnover was due to a mixture of natural contract attrition and foreign exchange pressures.

It added that the drop in gross margin from 36.3 per cent to £34.4 per cent was "due largely to market conditions".

Concentrix Corporation has previously lauded its Belfast operation for "achieving excellent service delivery" and said it would be the location to "expand our European base".

It also has a European footprint in countries like Bulgaria, Portugal, Spain and Slovakia, and in the post-Brexit uncertainty, there may be fears that it could opt to accelerate its business to there instead of Northern Ireland.

No-one from the company was available for comment.

Meanwhile Deputy First Minister McGuinness said there was a "great deal of alarm" within the business community in the north following the Brexit vote, adding that many companies were reevaluating their plans as a result.

He told the Irish News: "We already know that a planned US inward investment mission has been postponed and, in recent days, I have learned that a major employer here is reconsidering its plans to make the north its European headquarters.

"This is a company which employs thousands of people here, partly because they see the north as an ideal near-shore location for the European market."

He added: "The company had been preparing to establish the north as its European headquarters which would have brought additional jobs and investment. But now it feels it has no choice but to reconsider those plans.

"That is greatly concerning. The level of foreign direct investment we have been able to attract over recent years has been one of the success stories of the peace process. It will greatly damage our ability to continue attracting investors if we are dragged out of the European Union."

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