Business Post
There are plenty of column inches given to the Anglo/IL&P trial and Brexit. Latest Paddy Power odds on the referendum are: 2/5 Stay (68% chance) and 2/1 leave (32% chance).
The Low Pay Commission is expected to deliver a recommendation next month which could be as severe as recommending an increase in the minimum wage by possibly up to 25% from the current level of €9.15. It was already increased by 50c this year. The cost of living and housing in particular is at the root of justifications for this possible severe recommendation if the unions are listened to. Ireland currently has the second highest minimum wage in Europe.
Simon Coveney came out during the week saying special attention needs to be paid to making Cork, Limerick and Waterford more vibrant cities. Galway was not mentioned specifically. He believes it will put a lot more pressure on towns like Naas, Kilcock, Newbridge and Navan and building endless housing estates in these commuter towns is not the solution he believes in.
Mike Ashley is weighing up taking control of Debenhams through the current window of opportunity presented by the ongoing examinership, via his Heatons business. Heatons currently have 81 stores and Debenhams have 11. The parent company of Debenhams will also be determined to regain control of the business on the other side of examinership with a much lighter rent-roll and more flexible employment contracts.
Declan Ganley’s Rivada Networks is going up against AT&T for a $10bn contract to become the wholesale operator of Mexico’s radio spectrum.
“Kevin Barry, the former chief executive of the mining equipment maker Mincon, has netted more than €10m from the sale of part of his stake in the company.” He still holds around the same amount in shares. He owns c.7%, with the Purcell family owning 57%.
“Fexco, the Kerry-based financial services giant, saw its retained profits hit almost €290m last year, cementing its position as one of the largest private companies in the country.”
Greg Kavanagh is understood to have refused an offer for the two pubs he bought last year, The Globe and Rí Rá, but “like any property owner he looks at any offers made”. M&G did not receive the price it expected for a portfolio of New Generation sites it put up for sale and is said to be looking at selling off some of its holdings which were bought at the very bottom of the market in smaller lot sizes.
Elverys are looking at opening new stores in Dublin and Cork. It received an effective debt write-down of c.€20m through its examinership and the business appears to have stabilised based on filed accounts. Capnua Corporate Finance advised on the 2014 MBO, which was led by Patrick Rowland.
Mary Mitchell O’Connor, Minister for Jobs, Enterprise and Innovation, is interviewed by Michael Brennan. She is talking a good game regarding her commitment to small business and development of commerce outside the M50.
Last year 6,000 new work permits were issued (up by 20% from 2014).
Academic Noel O’Sullivan questioned the effectiveness of non-executive directors during the week, saying they are “like bidets. You don’t know what they are for, but they add a touch of class”.
Cork based IITC, a wholesaler of hardware, steel, plumbing materials and bathroom supplies recorded pre-tax profits of €1.4m last year.
There is a two-page special on JP McManus with particular focus on his court case with the IRS, America’s equivalent of the Revenue Commissioner. According to the article, McManus won $17.4m in a 72-hour Backgammon game in 2012 in the US. Billionaire Alec Gores who lost the bet withheld $5.2m for tax purposes. According to the IRS, “McManus contends that his winnings were exempt from US income tax under the Treaty, because he was an Irish citizen who paid a domicile levy of €200k to Ireland in 2012. The United States disagrees.” A judgment is expected in the coming months. According to the Business Post article, McManus is one of the best Backgammon players in the world. A good McManus quote from a previous article was “you change the addiction to gambling to one for winning. It’s not the gambling that’s important, it’s the winning.”
Ian Kehoe and Jack Horgan-Jones speculate as to how history may judge NAMA.
There are lots of deals happening in SME land including the €1.5m investment by Hughes Blake-run Goodbody 2015 EIIS fund into Intact Software. Enterprise Ireland are investing €400k to help the firm bring its software international and into the cloud. Flynn O’Driscoll advised Justin Lawless and the Intact team on the legals.
Michael Murray asks the question would Clydesdale, which is run by ex-AIB CEO David Duffy, ever try and take over AIB?
Róisín Burke writes about Donegal-born Gerry Robinson who is raising €200m to buy utility companies through his Ancala Partners vehicle.
Burke also reports on Simon Kelly (of breakfast with Anglo fame) who is moving Emex from a property management company to also have a software solution arm to its business which provides “safety and incident prevention audits and systems”.
The Oisin Fanning-led San Leon is “subject to a plenary summons from Moroccan logistics firm Revel Maroc, for monies it claims to be owed in relation to the hire of cranes”.
Sunday Independent
Tesco has replaced Stobart with DHL as its major logistics provider. The move will see c.150 Stobart staff move across to DHL. The contract is reported to be worth in the region of €45m. Irish family business Keelings Group manages Tesco’s chilled and frozen foods centre in Ballymun.
Insurance costs continue to increase. Allianz will increase motor insurance costs by another 5% by the middle of this year, bringing its total increase in premiums to c.10% increase in 2016. According to the CSO, car insurance prices have risen by 35.5% in the last 12 months and home insurance 9.9%. Kevin Thompson, Insurance Ireland chief, is pushing for reform of the Injuries Board, which handles personal claims out of court, as a means to reduce premiums.
Quadrant, a US investment fund, is reported to have backed the purchase of Clerys by D2 Private this time last year. Quadrant provided a €17m loan to fund the €29m acquisition. Separate to this, Quadrant have received €50m in funding from ISIF and will match this with an €50m of their own funds to finance property development in Ireland.
US angel investor Dave McClure believes the Irish tech firm Intercom has an estimated worth of half a billion dollars. McClure was an early investor in the business. He backed the man and the idea, “We invested because we thought Eoghan (Eoghan McCabe, CEO) was smart and he had an interesting idea for how to connect with customers”. Intercom has raised €116m since inception in 2011. Despite the concentration of tech giants with European headquarters here, McClure doesn’t rank Ireland in his top-10 start-up locations and sees it as a Government policy error to have let the Web Summit leave.
“More than €4bn worth of court-ordered debts have been registered against 3,243 borrowers since 2010”. Since 2010, BOI has pursued 957 borrowers, securing judgements of €377.42m; NAMA: 814 borrowers with €682m in judgements; AIB: 523 borrowers with €422.43m of judgements; UB: 211 borrowers with €344m of judgements. The vulture funds have been less active in the courts, however Stubbs Gazette CEO, James Treacy, expects there to be a “huge upsurge” in judgements and repossessions over the coming years.
Dawn Meats produced its one billionth burger for McDonalds this week. The company currently produces 400m burgers per year and is seeking to increase this by 25% to 500m burgers per year for the fast food giant. McDonalds is Ireland’s largest purchaser of beef at 40,000 tonnes per annum. It is estimated that one in five burgers sold in McDonalds stores in the EU is Irish beef.
Online mega-retailer Amazon has made enquiries to the Irish Aviation Authority about the possibility of using of drones to make deliveries. The IAA has yet to receive a “sufficiently developed” proposal but is “open to discussing the use of drones commercially in Ireland”.
Dan O’Brien comments on the “Sharing Economy” in his piece today – think Uber or Airbnb. PwC predict that the sharing economy will grow from $15bn today to over $335bn by 2025 – this is to be led by sharing in travel, car-sharing, finance, staffing and music and streaming.
Sean McGrath, CEO of Allianz Plc, is interviewed by Sarah McCabe in today’s paper.
Peter Flanagan interviewed, anonymously, investors at the recent Private Equity real estate conference. “Three to five years ago you could have bought almost any asset in Dublin, sat on it, and then sold it at a substantial profit. That isn’t the case anymore”, according to an un-named real estate specialist who is an alternative investment manager. The opportunistic buying at the bottom of the market is past us. Returns will be made from good asset management rather than large market movements.
The supermarket discounters continue to gain market share and now make up almost a quarter of the market. They have taken market share for the three main multiples in the last three years. Share and performance since 2013: Tesco 22.7% (down 4%), Supervalu 22.4% (down 2.6%), discounters 22.3% (up 7.3%) and Dunnes 21.4% (down 0.6%). Data is from Kantar World Panel.
The latest quarterly BDO Optimisation Index, which tracks business performance and the views of business leaders across Ireland, shows that 65% of larger companies reported a rise in activity, up from 38% for the same period last year. The number of smaller companies reporting a rise in business activity remained unchanged. The report notes that “the divergence between the larger and smaller business can be partly explained by funding for SMEs being harder to access and the increased exposure to personal financial issues”.
Sean Gallagher interviews Cork-based travel and tour organiser Michael Doorley.
Richard Curran comments that Dublin rents are now higher than they were in 2007, while incomes are still lower and take home pay, after higher taxes and USC, is certainly lower. The makes the rent burden a lot greater. Maybe USC cuts and not minimum wage hikes are the answer?
Sunday Times
The Department of Finance is considering reserving a special allocation of shares for members of the public for the proposed stock market flotation of AIB next year. Proposals for a retail offering, being worked on with the Department of Finances advisers Goldman Sachs and Rothschild, could allow private individuals to invest in AIB at a discount, or grant them loyalty shares to encourage them to hold onto to their investments.
Brian Carey covers the shareholder changes at Eir following the investment by GIC, a Singaporean fund, which has led to another major tidy up of the Eir post-examinership shareholder register. 80% of the equity is now in the hands of 5 investors. €1.7bn in creditor liabilities were written off in the 2012 examinership.
The state investment in PTSB is down c.€2bn on paper according to Carey. The state invested €2.7bn in 2011; its stake is worth about €750m today. He also questions the thinking behind the selling of Irish Life at the time.
Ryanair is launching a hotel website, Ryanair Hotels, in the autumn to challenge the likes of Booking.com and Airbnb and leverage off its estimated 100m plus passengers. A Goodbody report claims that a 5% take up from Ryanair’s traveling customer base, charging hoteliers a €20 flat fee per passenger, would generate €130m in extra revenues by 2018.
The state-backed ISIF fund has invested €42m into Draper Esprit, a tech funder that will float on junior markets in Dublin and London on Wednesday. ISIF will be the largest shareholder with a 26.8% stake. Draper Esprit, led by Brian Caulfield, has been an active funder of Irish tech companies since 2012. Its investments include Movidius and Datahug.
Avantcard, the former MBNA credit card company that shut for new business after been acquired in 2012, is planning to re-enter the Irish market later this year.
Cormac Lucey discusses the upcoming Brexit vote, the narrowing in the poles and the likely outcomes of a No vote. He cites the Norwegian model, whereby they are not members of the EU but largely enjoy its benefits by paying a per head of population fee to Europe and thinks that something similar would be adopted by the UK if the vote is No.
Sean Ewing, a Donegal hedge fund manager, has agreed to forfeit $8m as part of an agreement with US authorities. Ewing, the former Chief executive of AIM-Listed Absolute Capital, has been implicated in a US Securities and Exchange Commission investigation into alleged fraud conducted by two former colleagues.
US investment firm Oaktree Capital Management emerged last week as the preferred bidder for the two NAMA loan book portfolio’s, Project Emerald and Ruby. Loans connected to the Kenny Group, Aradawn Developments, developers Noel Conellan and Sean Lyne, John McCann and the Supple family are in the portfolio.
Borrowers will have to give their personal public service numbers (PPSN’s) when applying for loans as part of the creation of a central credit register. Approval is being sought from the data protection commissioner. It will provide a database of all loans, mortgages, credit card balances and overdrafts greater than €500.
Goldman Sachs is acquiring the Bridgewater shopping centre and a small office block in Arklow, Co Wicklow, as it continues to acquire Irish property assets. It is acquiring the assets for €30m from Cerberus; the centre cost a reported €190m and was opened in 2007.
NAMA chief executive Brendan McDonagh has dismissed claims by a group of property developers that the state agency’s debtors have access to low cost finance as a “myth” and stated that “the reality is that the cost of funding from NAMA is the equivalent to the blended cost of funding non-NAMA developers can get in the open market.” The developers using NAMA funding include Cosgrave Brothers, Gannon Homes, Bovale Developments and Burkeway Homes.
Breege O’Donoghue, the veteran director of Primark, owner of the Penneys fashion chain, is to leave the company after 37 years. She joined the company in 1979 and worked closely with Primark founder Arthur Ryan on building up the business, and most recently led its expansion into America in her role as business development and new markets director. She is also a director of C&C and has served on the boards of Aer Rianta and An Post.
CityJet has appointed Robert Martens, a former vice president of US Airways, to its board, as the group expands its fleet and mulls a possible merger with Stobart Air.
David Smith reiterates his case for the UK staying in Europe this week.
More than €550m in Prize Bonds were bought last year, four times that bought ten years go. The Prize Bond fund will be cut to 85% from July, resulting in a fall in the number of €1m jackpots. The weekly prize will still be €50k.
Boylesports has told the British mergers watchdog that hundreds of shops being sold off as a result of the Ladbrokes and Coral merger should be sold in a single block. DLA Piper, acting on behalf of Boylesports, wrote that at least 500 shops should be sold to ensure the disposal created a credible competitor in the market.
Brett, Ross and Dery Desmond are hoping to open the Republic’s first Five Guys burger bar in Dundrum Town Centre. The planned outlet is near Harvey Nichols in a unit that was formerly a homewares store.
GS Aesthetics, a Dublin-based breast implant maker, has raised $11m from existing investors, including the Barry’s Tea family who own 6% and Bill McCabe’s Oyster Capital who own nearly 23%, after shelving a stock market listing. Montreux Equity Partners, a San Francisco Group, led the round and invested $7.25m.
Danish fashion chain Only lost €265k in Ireland last year, despite a 17% increase in sales to €2.2m.
Dutch hedge fund Farringdon Capital Management has reportedly taken an interest in almost 50m shares in Independent News and Media (INM), equating to 3.7% of the company, through CFDs.
Nick Webb’s Inside Track piece is informative as usual this week. Matt Moran, the former CFO at Angl,o has been appointed as “China Market Leader” in PWC Luxembourg. Rory McIlroy has bought 51 Dawson Street in partnership with Neill Hughes and Peter Crowley of FL Partners for €4.25m. McIlroy was also an investor in Sunseeker Yachts, which FL bought for €30m and sold for €350m to the Dalian Wanda group in 2013.
The business focus piece is on Bernard Walsh and his Walsh Whiskey Distillery at Holloden House in Co. Carlow, a joint venture with Illva Saronno, the Italian maker of Tia Maria. €25m has been invested to date.
Samantha McCaughren’s interview is with Michael Duffy, Royal Dublin Society chief executive.
Peter Evans has a good piece on Steve Kaufer, founder of TripAdvisor. He still has big plans for the business and wants to turn the TripAdvisor site into a full service operator and sell holidays.
Anita Geoghegan, co-founder of Microchip Laboratories with her husband Ciaran in 1986, distills the benefits and influence the appointment of a non-executive director has had on their business.
27% – Proportion of Dublin office space which has traded since the beginning of 2013, according to new Savills report. Source:@IndoBusiness
32% – Latest implied probability of a ‘Leave’ vote in British referendum based on @paddypower odds, up from 17% two weeks ago.
€6bn – How much extra income the Government requires over the next 5 years to maintain current spending needs. Source:@IndoBusiness
34 – The average age of first-time home buyers, according to a new @REAIreland report, up from 29 in 2006. Source:@IrishTimesBiz
1.7% – Year-on-year increase in Eurozone GDP in Q1 2016. Source:@EU_Eurostat
2.4% – Latest World Bank estimate for global GDP growth this year, down from its estimate of 2.9% in January. Source:@IrishTimesBiz
2.3% – Monthly rise in UK manufacturing output in April, its largest monthly gain since June 2012. Source:@IndoBusiness
1 billion – The number of Irish beef burgers produced by @dawnmeatsgroup for McDonalds since 2012. Source:@IrishTimesBiz
9.2% – Increase in consumer spending in year to May, according to new @VisaEurope figures. Source:@IrishTimesBiz
13.6% – Increase in construction output in Q1 2016 compared to Q1 2015, according to new @CSOIreland data. Source:@IndoBusiness