Sunday Business Post
As expected, Brexit dominates the papers.
Paddy Power are quoting 9/4 to exit and 1/3 to stay. There was an implied 19% chance of exit this time last week according to Paddy Power, compared to 29% this week on the back of polls that suggested it is a lot tighter than people thought. The predictions on currency are extreme and nobody seems to have a full handle on what exit would mean for euro/sterling exchange rates. The editorial in the Business Post pleads to anyone with a vote or with influence to voters to get out and vote to keep the UK in the EU.
The Irish Revenue is ramping up its investigation tools to uncover off-shore tax evaders.
There is a hard-hitting interview with Niall Cody, chairman of the Revenue Commissioners. He warns that the era whereby people voluntarily disclose previous practices where tax is due and avoid penalties and prosecution is coming to an end.
Muhammad Ali’s life is celebrated across all papers.
The special liquidators of IBRC are selling an oil-well part-owned by Sean Fitzpatrick which was once valued at $1bn, but is now thought to be worth just tens of millions of dollars.
AQ Metrics, founded by two ex-Norkom employees, have closed a $3.25m funding round recently with Frontline Ventures, Bluff Point Associates (a Connecticut-based investment house) and EI. It specialises in capital markets surveillance and compliance software.
Worldview “has signalled that it is prepared to allow Petroceltic collapse into liquidation rather than cut a deal with management in relation to “change of control” clauses in their contracts”. Most examinership cases are to safeguard employment but this one case is being opposed by employees.
Simon Harris is trying to bring in measures which could see the cost of some drugs procured by the HSE falling by up to 30%.
Marissa Carter’s Cocoa Brown is expanding into Australia via RK Distribution which is owned by Irish sisters Ruth Stewart and Kim O’Dowd. Carter is also bringing out new products to make Cocoa Brown a beauty brand not just a tanning brand.
Dunnes Stores may have to disclose its accounts in a High Court case against Aldi who are challenging assertions made by Dunnes about cheaper prices compared to Aldi.
Declan De Lacy (PKF O’Connor, Leddy & Holmes) and Peter Stafford (Lisney) are raising a mini-bond of 10% to complete 29 houses in Wexford. They believe more developers will do this as private investors search for yield.
Vayu has won the contract to supply electricity to Apple’s giant data centre in Athenry. Apple have a condition that its energy must be 100% from renewable sources.
The construction industry in Ireland is currently c.6% of economic activity, the lowest of 19 countries covered by Euroconstruct whose average is 10%. It accounted for 20% in Ireland in the boom. There is a conference in the Aviva on Friday being hosted by Euroconstruct.
William Jones is taking a High Court case against Coolmore Stud, claiming that they are suppressing the sale and publication of his book, ‘The Black Horse Inside Coolmore’. Legendary vet John Halley has claimed in an affidavit that allegations about how he treated stallions were “factually inaccurate” and “untrue”. Halley wrote that “the only direction that I have ever received from Coolmore is to do what is best for the horse”. A number of authors who have written about Coolmore in the past have raised concerns about copyright infringements.
The Prem Group has just agreed deals to take over Cahernane Hotel in Kerry and Tulfarris hotel and golf club in Wicklow for €8m with backing from Swedish investor Proventus. It is also close to closing a deal in the UK. Prem runs or owns 15 hotels, as well as managing apartments and running Trinity Hospitality Services. The Kelly family who also invested in Digiweb have been investors before Proventus gave the big cash boost. This Kelly is separate to Paddy Kelly who was involved in Prem but no longer is.
Febvre Wines recorded a pre-tax profit of €578k in 2014, up from a €1.7m loss the previous year. The wine wholesaler’s revenue was €49.4m, up from €48.9m. The Alken family founded it and Frank Wood bought a majority stake last year.
IPUT’s portfolio of investment properties increased in value to €1.8bn, a rise of 24% in the past 12 months.
Flahavans Porridge recorded a pre-tax profit of €2.4m for the year ended June 30, 2015. The company is 100% owned by the Flahavan family.
Jamie Heaslip, Rob and Dave Kearney, Sean O’Brien and their business partner, 33 year-old Noel Anderson, are investing €500k in expanding their Ballsbridge pub, The Bridge 1859. They reportedly bought the property for €1.35m and spent €600k refurbishing it.
There is a feature on the dilemma of the state footing enormous bills for life-saving drugs.
Louise Murphy and Stephen Murphy of Cyc-lok are raising €2m to expand their business which supplies clever bike parking facilities.
Tom Lyons and Gavin Sheridan have secured a great interview with Apple co-founder Steve Wozniak.
Caroline Keeling, chief executive of third-generation fruit producer and food distributor Keelings, is interviewed in the Business Post. The company has invested €40m since the year 2000. It has five divisions: Retail, Farm Fresh, Market, International and solutions. Her dad Joe is chairman and her two brothers head up two divisions of the business.
There is a 4-page focus on the not-for-profit sector.
Michael Murray writes an excellent article about “Generation rent” who are facing “injustices of slow salary growth, soaring rents, unaffordable mortgage deposits and little by way of employer-funded pension provision”.
Róisín Burke reports that Niall O’Dowd has sold IrishCentral, the New York-based news and entertainment website, for $3m. His Irish Voice newspaper and Irish America magazine are not part of the transaction. Dennis Kelleher and Dennis Fitzgerald are representing Bluff Point Associates who were early investors and will profit from the exit also.
Eddie Jordan has invested in a new golf app called Sprint6golf.
The monthly IT magazine Connected is jam-packed once again.
Sunday Indo
A number of developers are seeking disclosure of the book of evidence used in the criminal prosecution of former NAMA official Enda Farrell. The developers fear that the agency’s entire portfolio, including sensitive information relating to individual debtors, was leaked.
Cardinal Capital are preparing to launch a new property finance fund, with its existing €300m fund being drawn down faster than expected and likely to be fully placed by the end of the year. There is an interview with Paul Corry who manages the current fund which provides mezzanine finance to property players.
Dunnes Stores is facing a High Court bid to compel it to keep open the doors of its store in Edward Square Shopping Centre, which allows pedestrian access to Eyre Square. Landlords Camiveo secured a temporary injunction preventing Dunnes from closing its doors, although there is no “keep-open” clause in its lease. “A keep-open clause is an obligation in a lease requiring a tenant to trade continuously from the premises throughout the term and is designed to ensure shopping centre units are occupied and open for business.”
Dropbox is the latest tech company to face prospect of a court order from an Irish court to disclose or delete material in its possession. “Digicel chairman Denis O’Brien has made an application for third-party discovery against the cloud storage firm in connection with his defamation action against PR firm Red Flag.”
New junior finance minister Eoghan Murphy is prioritising the promotion of Ireland to Asian countries as a European financial services hub in his first few months in office.
According to Quarterly National Household Survey (QNHS) data, the number of people employed in real estate activities (as defined by the QNHS) has fallen 11.1% since Q1 2016, although numbers involved in the construction of buildings were up 14.9%. The data puts total employment at 1.98m, up more than 2% year-on-year.
Societe Generale has identified tobacco as the most attractive segment for investors looking at consumer staples, citing attractive valuations, consistent growth and cash generation.
Sarah McCabe has an interview with Jamie Heaslip discussing his various investments. Heaslip has recently backed Pointy, an Irish search app, and is planning a new food venture with teammate Rob Kearney. He is an also an investor in UrbanVolt, LovinDublin and Coco5. As mentioned in the Business Post, Heaslip is also involved in The Bridge 1859 pub in Ballsbridge, amongst other hospitality interests.
INM is seeking to use its strong balance sheet to make acquisitions, according to the chief executive Robert Pitt at the company’s AGM during the week. Revenue rose at INM for the first time in 8 years last year and total revenue grew strongly in the opening four months of this year, according to the company.
Dan White has a feature on “Ireland’s ticking pension timebomb”. Just 33% of private sector workers belong to any sort of pension scheme, down from 37% in October 2009. In 2011, there were approximately 5.25 people of working age for every pensioner; according to CSO projections, this will fall to just over 2 workers per pensioner by 2046. There has also been a move away from the provision of defined benefit pension schemes by companies. Longer life expectancies, combined with low investment returns (particularly in present ultra-low interest rate environment) are putting increased pressure on the situation.
There is an interview with Mark Henry, marketing director of Tourism Ireland. CSO figures last month showed a 16% increase in tourist numbers in the first 4 months of the year, while 2015 was a record year with c.9.5m visitors and the tourist industry contributing c. €7.3bn to the Irish economy. Henry identifies the suspension of an airline travel tax in return for greater connectivity, favourable exchange rate movements, low inflation and lower 9% VAT rate on tourism services to have been key drivers of Ireland’s strong tourism performance in recent years.
Sean Gallagher’s weekly eature is with Brian Lee who founded Chopped together with Andy Chen. The healthy-food franchise was set up in 2012 and now has 7 outlets in Dublin, employs over 120 people and has an annual turnover of over €2.7m. Chopped plan to open another 10 outlets in Dublin by the end of the year, before looking at nationwide expansion by end of next year.
Niall Phelan, CEO of Rye River Brewing, the company behind the successful McGargles beer, is interviewed in today’s paper. The Kildare-based craft beer business was founded in 2011 by Niall Phelan, Alan Wolfe and Tom Cronin. In its short life, the business has grown from a domestic supplier to an international business, exporting to 16 countries and listed in all the major Irish multiples. It recently began supplying Lidl Ireland and this year will supply Lidl stores in five countries – the US, Canada, Germany, South Korea and Italy. Niall’s ambition and the company’s growth isn’t slowing, with plans to treble its staff and build a new 12,000 sq. ft. brewing centre and visitor centre.
Richard Curran calls on the other banks to disclose details of how much mortgages they lent under which the Central Bank restrictions did not apply, following the release by Permanent TSB of this information for 2015. The restrictions need not apply to 15% of the total amount given out in mortgages in a given year. Permanent TSB only allowed an exemption on 11% of the mortgages it lent out; Curran questions the reasoning behind this, but applauds the releasing of the information.
Adrian Weckler covers the release during the week of the highly-regarded “Internet Trends Report” by Kleiner Perkins’s Mary Meeker, which paints a grim picture for “legacy” media as ad revenue will continue to move to “online platforms”. The report expects things to get worse for print media which is currently “over indexed”, with Weckler citing the stat that newspapers represent only 4% of a person’s media consumption, but attract 16% of available ad revenue. Weckler does cite several reasons not to despair as of yet, but acknowledges the sector faces definite challenges and needs to adapt and innovate.
Sunday Times
Brian Carey speculates that the exit for the hedge funds in Quinn Industrial holdings will be tricky given the Quinn dynamic and that at the point of exits the Quinns may have money, if they get a settlement to their various cases and that they could be the buyers on an exit.
Carey also comments that Datalex is an anomaly as very few fast-growing tech companies are listed.
Carey says Eamonn Rothwell deserved the €4.5m he cleared on exercising share options last year. Rothwell owns 15% of the company.
The student residence in the former Montrose hotel is for sale for c.€40m.
Agri-food group Donegal Investments (formerly Donegal Creameries) is selling An Grianan, the sale is expected to generate €15-20m.
Ardmore Studios has told the government that the cap on film tax relief needs to be raised to at least €100m in order to attract blockbuster Hollywood films to Ireland. The mooted raise of the cap to €70m from current €50m is “inadequate” according to Siún Ní Raghallaigh, Ardmore chief executive.
The Farnham Estate in Co. Cavan is to be put on the market for c. €25m, with Savills handling the sale. The estate was developed at a cost of c. €85m during the boom.
Eir executives are to meet government officials this week to discuss the company’s row with its broadband wholesale customers. The Sunday Times learned that Eir chief executive Richard Moat wrote to the former minister for communications Alan White expressing concerns that the issue would damage the company’s reputation and urged against issuing directions to ComReg on the matter.
Bluestone Asset Management, an Australian credit provider which specialises in hire purchase for those unable to access finance from mainstream lenders, is planning to double lending in Ireland to €50m next year, with up to 30% to come from SMEs.
Paddy McKillen Jr and Matt Ryan’s Press Up Entertainment Group have acquired two semi-derelict buildings on Dublin’s Thomas Street with the intention of converting them into a hotel. The buildings currently have planning permission for offices, but Press Up will seek permission to build a hotel on the site. The properties were on market last year for €650k. This would represent 4th hotel in the group which also includes over 20 bars and restaurants.
Intercom founders Eoghan McCabe and Des Traynor have personally invested in a $10m funding round for US start-up Front, which is seeking to overhaul email.
Turnover at Blue Insurance, Ireland’s largest provider of travel cover, increased 23% in 2015 to €26m after expanding into home and motor insurance markets. MD Ciaran Mulligan bought out co-founder Rowan Devereux in 2014 for €10m but has no plans to sell the business at present.
Stewart Doyle has stepped down as principal of Broadhaven Credit Partners by mutual consent to pursue other interests. Broadhaven is backed by Dermot Desmond and Sankaty Advisors and is an alternative lender focussing on the SME and residential development sectors. Doyle headed the fund alongside David Cullen.
Mayo biotech firm Ovagen is raising €6.5m in new funding having failed to meet its initial ambitious targets. The company was founded c.10 years ago, targeting annual revenues of c.€50m, however the company has no material revenues and had accumulated losses of €11m by the end of June last year.
Receivers Duff & Phelps are bringing a portfolio of properties just off of Grafton Street to market to market. The properties were assembled by boom-time developer Bernard McNamara who had planned to develop a high-end shopping centre. It is understood that Duff & Phelps, appointed by Nama, will appoint Knight Frank to market the portfolio. Sources have suggested the portfolio could sell for up to €100m.
Gaelectric has lined up £68m (€87m) in debt to fund its wind farms in Northern Ireland. The 18-year debt will finance 5 projects expected to produce a total of 51.5 megawatts of electricity. The borrowings will be provided by German bank Nord/LB.
Niall Brady has a feature with Jeremy Masding, chief executive of Permanent TSB, which covers the challenges ahead for the institution.
Brian Carey has an interesting interview with Kevin Toland, DAA chief executive. Toland formerly headed up Glanbia’s fast-growing US business and oversaw 15% growth in passenger numbers in Dublin airport, to a record 25m, last year, while Cork airport’s passenger numbers are expected to increase by 8% this year following 7 years of decline.
Danny Forston has a piece on the energy industry which appears set for revolution in the face of new technologies and increased regulations relating to climate change.
Stripe founders John and Patrick Collison are also proving themselves to be shrewd investors. The pair invested as part of a January 2014 $4.3m seed capital funding round in Cruise Automation, a company which makes sensors for normal cars that enable them to be self-drivable. The company which had raised a total of $18.8m by last November, before General Motors emerged as buyers 6 weeks ago at a $1bn valuation.
Nick Webb highlights that Michael O’Leary “is the only mega-rich man who lives, works and pays his tax here”, outside of Glen Dimplex’s Martin Naughton. O’Leary told Ivan Yates on Newstalk during the week that he paid tax of “more than €10m a year, which is a lot for the privilege of living in sunny Mullingar”.
Kieran Curran, the low-key biotech entrepreneur who sold his revolutionary DNA testing company GenCell for c. $150m in 2014 to US multinational Becton Dickson, is believed to be working former Firecrest Clinical boss Gerard Ryan on Ryan’s new venture, Longboat Capital.
54% – Proportion of Irish financial analysts who identified Brexit as biggest threat to Irish economy. Source:@cfaireland/@IrishTimesBiz
62% – Proportion of Irish exporters who increased sales into overseas markets in Q1 2016. Source:@IrishExporters/@examinerbiz
10% – Proposed CGT rate from 2017 for start-ups mooted by Jobs Minister Mary Mitchell O’Connor at @SFA_Irl conference. Source:@IndoBusiness
7th – Ireland’s ranking in latest IMD World Competitiveness Center rankings, up from 16th place last year. Source:@IndoBusiness
7.8% – Latest headline unemployment rate, a post-crisis low, with youth unemployment down to 15% from 20% a year ago. Source:@IrishTimesBiz
12% – Rise in @Ryanair passenger numbers in May, bringing total to 10.6m, while the load factor increased to 94%. Source:@IndoBusiness
5% – Latest @OECD estimate for Irish GDP growth this year, with 2017 GDP growth forecast to be 3.4%. Source:@examinerbiz
€770m – The amount by which exchequer receipts are ahead of forecast for the first 5 months of the year. Source:@IrishTimesBiz
1.6% – Latest ECB estimate for Eurozone growth this year, up from the previous forecast of 1.4% in March. Source:@IndoBusiness