Business Post
There is lots written about the Gardaí / Whistleblowers Saga.
There are 7,995 vacant houses and 16,321 vacant apartments in Dublin city centre. There is a suggestion that an empty home tax might improve the supply of accommodation.
Briefing documents prepared for Shane Ross by the Department of Transport showed “strong official resistance to facilitating the arrival of most Uber services”. Head of Ireland, Kieran Harte, is lobbying hard and is running a significant trial in Limerick where its new HQ is.
Róisín Burke secured a great interview with John Fitzpatrick, the owner of Fitzpatrick Manhattan and Grand Central hotels. He thinks Dublin hotels are pricey and he quotes the €80m price for the Gresham to support the claim. But he is looking at opportunities outside of Dublin. His two hotels in New York are generating revenues of $26m and making a profit of $4m. He is vocal in his opposition to Airbnb, given the lack of a level playing field from a tax perspective. He is chairman of the Ireland Fund. He tells a few good stories about the struggle to get established in New York and how he took on the Mafia.
There are some good quotes from Gary McGann, who spoke at the Legal and Finance network event in Lansdowne last week. His quotes on our efficiency of spending was interesting. He said that years ago in relation to health etc. “when we were poorer, we were better”. He went on, “there’s not efficiencies in the utilisation of the funds that were created from tax. I tell you what I don’t want, I do not want people to start attacking business and making the economy less competitive based on the idea that risk and profit are bad words. They need to be good words, but we need a more efficient system.”
“Johnny Ronan’s property group Ronan Group Real Estate (RGRE) is working on €1 billion worth of new projects in Dublin just one year after the veteran developer exited the National Management Agency (Nama).” Last week was a busy week: they acquired the Spencer Dock site for €43m and Dublin City Council approved plans for a €300m office development in Ballsbridge. The story is also covered in the Sunday Times. RGRE secured a deal on a six-acre on a site on Spencer Dock from receivers EY. The €43m being paid by Ronan is to secure a license to develop the site, beating off a rival offer from M&G-backed New Generation. The site has planning permission for two office blocks and 165 apartments.
Aerogen is one of the Irish first companies to enter the Iranian market on the back of trade restrictions being lifted. Aerogen are planning to get to €100m in Turnover. They produce drug delivery solutions via aerosol. Trinity Biotech, Butler’s Chocolates and O’Brien’s sandwich bars are also looking to expand into the Iranian market.
“Sean Gallagher has joined the board of Heart Metabolics, a biotechnology company developing drugs for orphan diseases.”
A statement from Sean Quinn during the week said “I confirm that an agreement has now been reached with QBRC which creates a pathway for the Quinn family to potentially realise its ambitions over time.” His €500k a year consultancy has ended and it sounds like there is a bounty for Quinn and family if they are helpful and do not hinder the progress of Quinn Industrial Holdings over the next year or two.
The Sunday Business Post reports that Duff & Phelps, the global valuation and corporate finance advisor, has acquired Corporate Finance Ireland (CFI), a leading corporate finance firm in the Republic of Ireland. The acquisition is the firm’s third in Ireland in the past two years and clearly demonstrates its confidence and commitment to this market. The acquisition will add to Duff & Phelps’ corporate finance and property asset management expertise and is the next step in the roll out of its global product offering to the Irish market. Duff & Phelps acquired the insolvency arm of RSM FGS initially and went on to acquire Kinetic Partners.
Bernard Brogan senior and sons are to acquire the four-star Pillo hotel near Ashbourne and close to Tayto Park, either for themselves or as part of a consortium. It was put on the market by receivers KPMG, having been owned by Paddy Kelly and John McCabe, and is thought to have exceeded the expected price tag of €8m. The Brogans are believed to have bought Dundrum House in Tipperary and they also have a stake in US technology company Adaptive.
UDG Healthcare chief Brendan McAtamney tells the Business Post that he is “eying up deals in the region of €120m to €150m and has up to €600m to spend in total”. UDG sold its distribution to McKesson last September and it is sitting on cash.
Suir Pharma Ireland is being sold by liquidator Michael McAteer. German company Stada sold it to German PE fund Mutares in 2012, who sold it to Slovakian Pharmaceuticals in 2015. It still does a lot of contract manufacturing for Stada. It is projected to lose €2m this year, having lost nearly €5m in the 15 months to March 2016.
Ardmore Shipping is looking to grow by entering the US chartered market.
McCormack Fuels in Sligo has added some heavy hitters to its board, including Tony McEntee (ex-Lifestyle and currently CEO of Allcare), Liam Mulcahy (commercial director of Topaz) and Liam McGreal (ex-Dunnes)
Coolmore Stud “has launched proceedings against France-based businessman Robert Nathas”.
New Agriculture minister Michael Creed is talking a good game regarding what he will do for farmers. He says “everybody’s making a decent living other than the fellow in the milking parlour getting a slap of a shitty tail milking cows, or bringing sheep in off the hillside or rearing a suckler beef herd”.
There is a two-page focus on the housing crisis.
There is an excellent interview with Kevin O’Connor, head of family business Colourtrend, who reflects on 2008 when paint sales dipped by 40%. With sales in the region of €10-15m, they are successfully competing against Dulux and Johnsons.
There is a profile on the new leader of the Labour party, Brendan Howlin.
There is a plethora of interesting deals in the Done Deal section.
Colette Sexton has a good piece with INM chief Robert Pitt and Mairead Kearns, group head of sales. Interestingly, he has never spoken to either Denis O’Brien or Dermot Desmond who control nearly 45% of the shares. Also, it’s interesting that they have taken an advert in the Business Post to promote the message that print advertising is 1.5 times more effective than radio for the retail industry in delivering ROI.
There is four-page special on business in the midlands. RBK are featured. Chris Ball says that its international affiliation with LEA Global gives it global reach. This coupled with the local heritage makes it a big player in the accounting/advisory market across the midlands. It has extended its Irish reach with recent mergers with Andrew Partners and PGL in Dublin.
RSM (formerly Baker Tilly Ryan Glennon) also have its midlands partners, Suzanne O’Neill (Birr) and Pat Keegan (Portlaoise), featured. It also offers the local service with international reach.
There are two pages on the recent AIB Private Banking Law Awards. There is a feature on Byrne Wallace who won the Firm of the Year award.
There is a seven-page special on ICT security.
The Invested magazine is out with various investing tips from what to look for in companies, to a focus on craft beer and the question whether Cairn Homes can help solve the housing crisis.
Róisín Burke congratulates Brendan Murray (ex-FL Partners) for his new role as CEO of Shamrock Rovers. Wealthy supporters Ray Wilson and Seamus Dawes lent the club €1.5m last year to fund an investment, including investment in the youth academy.
NTR founder Tom Roche is said by Burke to be acquiring a site in Castleknock for high-end apartments. Apartments at his Dublin 4 Percy Place development are retailing for €1m each.
Sunday Independent
Since the €13bn sale of O2 to Three in the UK was blocked, Dublin CEO Ronan Dunne has had his door knocked down with PE firms wanting him to do an MBO. However, it looks like an IPO is a more likely exit route by owners Telefonica, assuming no other trade sale option emerges. Dunne trained with Deloitte and moved to London in the mid-80s. He became CFO of O2 in 2005 and CEO three years later.
Irish software firm Lynk is expanding in the US. It offers a similar service to Hailo, but its business model is different as it charges licence fees as opposed to revenue shares.
There are a number of Northern Irish businessmen named as part of the Panama Papers leaked. There is no allegation that they did anything wrong, just a revelation that they used companies based in Panama as part of their company structures.
Coillte is keen to collaborate with whoever wins the Government broadband roll-out programme. Siro, Eir, Enet, Imagine Group and Gigabit consortium are said to be the runners in the race for this. Coillte sold its mast company for €70m last August, but clearly want to create a similar income stream. Coillte owns over 6% of the entire land in Ireland.
“Financial technology firm First Derivatives is in talks with a Formula 1 team, an oil and gas company, a supermarket chain and an aircraft manufacturer as part of a push into new markets.”
INM commissioned Amarach Research and Ignite Research to interview 13,000 people face-to-face over three years and proved that every €1 spent on print advertising delivers €39 for the retail sector. 38% of test drives are as a result of print advertising.
Surrey-based InfraStrata has commenced drilling activity at a controversial oil well at Woodburn Forest in Co Antrim. Analysts give it a 16% chance of success.
Ikea is looking to have an Irish website which delivers and also open stores outside of Dublin. The Ballymun store turns over €132m, makes €13.2m and is one of Europe’s top performers. It is opening a much smaller store in Carrickmines by August which will serve more as a collection depot for click and collect customers.
Dan O’Brien looks at our demographic trends. The CSO predict that Ireland will grow from a 4.6 million population to more than 5 million in 2026. Many other countries are facing population shrinkage. Since 2008, the number of twenty-somethings has fallen from 750k to 500k, having an effect on pubs, etc. This was largely due to sharp fall in births from 1980 to 1995, not emigration. This group is expected to grow in ten years. In a decade, there will be a quarter of a million more based on the CSO base case. This is the big dynamic – the growing older population.
There are a lot of column inches about the pressure to reduce mortgage variable rates.
There is a lot of talk about Brexit. Paddy Power now go 1/6 that the UK will vote to stay in EU (79.4% chance)
Successful horse trainer Eddie Lynam is interviewed about his money habit. He very frankly says, “I wouldn’t recommend getting into racehorses to make money”.
Seán Gallagher’s piece this week is with James Costello, managing director of Santry-based labelling firm Label Tech. Costello established the business alongside his late father in 1992 and the business now employs 40 people and has an annual turnover of over €8m.
There is a piece with Oliver Dewhurst, general manager of Deliveroo’s Irish operation. He speaks about how he should have spent less time in class and more time running societies and events. Dewhurst turned down a tax role with a big-4 firm in London to work with Groupon when it was still in start-up stage. He began his current role with Deliveroo in Ireland last August and is overseeing the company’s rapid growth here.
Richard Curran explains why he does not believe Fianna Fáil’s proposed imposition of mortgage rate caps on Irish banks makes sense economically. He suggests that the introduction of such measures would leave the Central Bank an easy target for “publicity-seeking backbenchers” and if caps were to be introduced, the banks are likely to increase rates for other customers, with SMEs a likely sector to suffer, even though they are already paying far higher rates than the EU average.
Curran also discusses the public sector pay increases sought by the Impact trade union during the week. He highlights that the national debt is now four times what it was in 2008, the last year when public sector benchmarking was in place. One of the biggest flaws in the system was categorising the public sector as one category and not looking at it in different income categories, with high earners in the public sector benefiting to a much greater tune than those at low levels.
Sunday Times
Carlyle Cardinal Ireland, the state-backed private equity group, is in exclusive talks to buy AA Ireland in a deal that could value the insurance and road side assistance provider at around €160m. FL Partners and Electra Partners had also expressed interest in the business. Reported revenues fell last year to £38m and operating profit was c.£13m, but it is considered a low point in the insurance profit cycle.
Brian Carey highlights the issues facing new housing minister Simon Coveney. The cost of building a three-bed semi in Dublin, according to the Society of Chartered Surveyors in Ireland (SCSI) is €330k; according to Daft.ie, the median cost of buying a three-bed house in Dublin stood at €294k, €46k below the build cost. The SCSI figures made a number of key assumptions: average site cost of €57k and blended rate of finance of 6% (with the developer bringing 30% equity to the table). The reality is that there is a limited pool of developers who have acquired sites at €57k and very few who can access finance at a blended 6% outside of Cairn Homes and the Nama-funded developers. Suggestions to reboot the market and make developing more economical, include launching a state-backed fund that will lend at 5% to developers or abolish VAT and levies, as is the case in the UK.
Toscafund Asset Management, one of Britain’s most aggressive hedge funds, has taken a significant stake in PTSB, paying €30m for a 3.34% stake. The investment is seen as an opportunistic investment to take advantage of a weakness at the share price following political interference to cut the cost of mortgages. PTSB’s shares have lost almost 60% of their value since a stock market listing last year at €4.50 per share.
400 multinationals with operations in Ireland will be subject to new EU country-by-country reporting rules, which aim to scrutinise aggressive tax planning. Companies headquartered in Ireland with a worldwide turnover of more than €750m are open to country-by-country reporting.
Cormac Lucey reflects on the Programme for Government that represented a good idea which now appears to have gone bad from the get-go. It has already paved the way for a democratically-imposed tax not to be paid and which looks like it will be ultimately abolished. There is also a proliferation of increased spending allocations to a spread of projects that are aimed at national coverage and electorate appeasement. Lucey also points to the fact that the PFG is not costed.
Denis Naughten, the new communications minister, plans to set up a new standalone agency to manage the state’s telecoms interests, including responsibility for the delayed €275m National Broadband Plan (NBP).
Paul Finnerty, ABP Group chief executive, is to retire in September and will be replaced by chief operating officer Frank Stephenson, who joined ABP last year from Glanbia Performance Nutrition. ABP had revenues of €2.7bn last year and is currently seeking regulatory clearance for the acquisition of a 50% stake in Wexford firm Slaney Foods, the parent company of Slaney Meats and Irish Country Meats.
The Department of Transport has committed to introduce legislation within the next month to help smooth plans for a second parallel runway at Dublin airport. It is understood that the implementation of a noise directive would be a big step in the process.
MKN Property Group, a Dublin developer that joined a complaint to the EU Commission about the influence of Nama on the property market, has bought a Raheny site for €3.6m. MKN wants to build 16 three-storey houses and 52 apartments on the site. It also sold €22m worth of apartments last year on their Seascape development.
Further strikes are on the cards this year as clerical public servants, administrators and civil servants vowed to oppose any Government move to cut deals with hard to recruit and better skilled health and IT workers. Three of the biggest public service unions have agreed to a merger to give them more clout in negotiations. Impact have agreed to a merger with the Public Service Executive Union (PSEU) and CPSU to create an 80k member “super union”.
Clanwilliam Investments, the healthcare investment group founded by Howard Beggs and US group Eli Global, has acquired two companies: a Galway-based medical survey company and a UK medical software business.
ComReg, the telecoms regulator, has sided with four communications companies in their row with Eir over repair times on its network. Last year, Sky, Vodafone, BT and Magnet entered into a formal dispute with Eir over its repair times on the broadband and fixed line network. Eir could face fines if the findings of a Towerhouse report are upheld by ComReg. Eir is currently reviewing the report findings.
David Smith makes an interesting observation: since 1999, there has been 2,600 EU votes involving Britain, they have voted against 56 times and abstained 70 times, meaning on more than 95% of occasions they seem quite happy in the EU?
Broadhaven Credit Partners have provided the funding for the refinance of Actons of Kinsale out of Nama, which is owned by Michael Cotter and the Good family.
Transdev are lining up a five-year pay deal to resolve the Luas strike and is hinting at paying the 22% demanded by drivers.
Property developer David Daly has submitted plans to build an office block in the upmarket Ballsbridge area of Dublin. Daly’s company plans to demolish IPC House on Shelbourne Road.
Publicans have lobbied the justice minister, Frances Fitzgerald, for a fairer way of settling compensation claims, following a raft of high profile claims against pubs and nightclubs.
Paul Candon, group corporate services director at Topaz Energy Group, is leaving the business; he previously worked for Roches Stores.
One51 plc has acquired the business and assets of English industrial services company The Bale Group.
Former Sunday Independent Business editor Nick Webb has joined the Sunday Times and has a number of articles this week. He covers Greg Coughlan, the co-founder of Howard Holdings, return to the property game in London. Coughlan had a €28m judgement against him in 2010, failed to provide the High Court with a statement of means and then relocated to Portugal.
High-flying European investor Nicole Junkermann is a backer of Emmett Kilduff’s financial data tech company, Eagle Alpha, which has just completed a €1.5m friends and family funding round
Niall Brady covers Brexit and the opinions of some of Ireland’s leading business figures from both the No and the Yes camp. John Teeling is in the No camp and gives his rationale, as does Michael O’Leary in the Yes camp.
0.8% – Threshold which the yield on Irish 10-year bonds fell below this morning, following Moody’s ratings upgrade. Source:@IrishTimesBiz
2% – Decrease in exports in March compared to February, driven by a sharp fall in pharmaceutical exports. Source:@CSOIreland/@IrishTimesBiz
24% – Latest probability of Brexit occurring according to Good Judgement Inc.’s panel of “superforecasters”. Source:@business
117.7 – Q1 reading on KBC Ireland/Chartered Accountants Ireland business sentiment survey, down from 131.1 in Q4 2015. Source:@examinerbiz
81% – Proportion of business leaders who believe Government not adequately prepared for Brexit. Source:Institute of Directors/@IrishTimesBiz