The Galway-based unit of computer giant Hewlett Packard (HP) returned to profit last year in spite of a 26% drop in revenues to $258.1m.
Accounts just filed with the Companies Registration Office show that Hewlett Packard Galway Ltd recorded a pre-tax profit of $7.8m (€6.2m) following a $12.57m loss in 2010 — a positive swing of $20.3m.
The figures show that revenues at the firm dropped by $94.9m from $353m to $258.1m in the 12 months to the end of Oct 31 last.
The chief factor behind the US-owned firm returning to profit was an exceptional cost of $18.5m towards additional pension payments in 2010 that did not re-occur last year.
The figures show thatResearch and Development (R&D) spend at the company last year almost doubled from $10.7m to $20.1m and the directors’ report confirms that R&D is now a major activity on-site with over 200 software developers employed. It states: “Many of these developers are focused on next generation platforms — in particular cloud computing.”
Numbers employed at the firm last year increased from 268 to 378 with staff costs increasing from $26m to $34.9m.
The principal activity of the firm is the manufacture of computer software and computer documentation which is exported mainly from Ireland.
According to the directors’ report: “The company has continued to develop from its manufacturing heritage to be a campus for software business lines with strategic planning and continuous innovation by the site management team and employees driving new business offerings to replace those that have matured naturally and declined.”
The report continues: “Software services business lines continue to perform well supporting a worldwide customer base. In the coming financial year, the company will continue to look for opportunities to demonstrate the value it can deliver for Hewlett Packard businesses and projects across the globe.”
On the risks and uncertainties facing the firm, the directors point to “the challenge of maintaining competitiveness in the face of rising energy and labour costs, especially in the context of comparison with other locations around the globe”.
The figures show the firm recorded an operating profit of $8m following an operating loss of $12.4m in 2010.
The filings also show that payments totalling $325,787 arising from redundancies affected the firm’s operating profits while interest payments amounting to $223,393 also reduced profits.
HP employs around 4,500 people in Ireland with most of them located at the firm’s Irish headquarters in Lexlip.
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