Sunday Business Post
Cerberus, Carval and Goldman are beginning to realise the loan books they bought and recover assets where loans are in default. Given the impaired loan books they bought, this was an inevitability and let’s hope they are all as fair as possible to the people and families involved. There will also be a lot of winners out of this where people will buy back their loans at a big discount and get an effective write-off.
Ulster Bank’s €2.5bn Project Oyster which is currently on the market contains a lot of impaired residential loans. It is said that a lot of big funds will not be too anxious to take on the PR and political battle they would face in foreclosing on these assets. One wonders whether this will make existing banks slower to lend out mortgages given the lack of enforceability of the security.
All the papers are about Brexit, Brexit and Brexit. At 1/7 (81% probability), Paddy Power still feel that it is inevitable that UK will stay in. With sterling back at 76p, the currency markets seem to think so also.
Web summit founder Paddy Cosgrave and his new wife Faye Dinsmore had their marriage celebration with friends and family in 3fe coffee shop.
5% of RTE employees (89 in total) were paid more than €100k in 2014.
The SFA held a great conference in UCD during the week which coincided with its launch of its publication ‘A vision for small firms in Ireland’.
Digicel’s numbers are in the Business Post. Its debt sits at $6.4bn which is 5.2x Earnings. Revenue dropped 2% in the nine months until March due to adverse currency swings. There are no significant repayments due until 2018. A lot of the excess cash is being invested in the network.
CIE workers are expected to immediately demand whatever increase the Labour Court recommends for the Luas drivers. There has been less talk in recent weeks about a summer of discontent but I’m sure many union leaders are waiting to see what happens the with the Luas drivers.
Stephen Kinsella very maturely gives credit to another publication’s journalist Dan O’Brien for highlighting that the recovery is happening outside the M50:
– Border has 89% of its 2008 employment levels,
– Midlands 93%
– West 86%
– Dublin 96%
– West 88%
– South-East 91% (Current unemployment 12.5%, peaked at 20%)
– South-West 92%
Dublin is clearly performing better, but the graph is going the right way outside the M50 and new car sales would support the same also.
The Garda crisis is well covered also in the Business Post.
Martin Naughton of Glen Dimplex and former AIB chairman Dan O’Connor are investors in a €80m wind farm planned for the Irish Sea. He has been an investor for some time and has answered the recent cash-call. Gaelectric and Brian Britton are the main promoters. Similar to solar, there currently is no price subsidy like on-shore wind but lobby groups are working hard on rectifying this.
“Tullamore technology company ASTR has closed a deal with an Australian ambulance manufacturer that will be worth up to €16m over the next five years.”
BAM received a big award at the International Partnership awards in London for its PPP work.
Bernard Byrne’s quote during the week at AIB’s AGM that “As a business, we are IPO ready’ was very strong. Assuming IPO market conditions improve a little, a 2017 IPO looks almost certain at this stage. Ian Guider also highlights the smaller crowd and less security shows that anger has dampened amongst the general public.
The latest Red C Poll shows:
– Fine Gael 26% (same as election)
– Fianna Fail 26% (up 2% from election)
– Sinn Fein 15% (up 1%)
– Independent Candidates 11% (down 2%)
– Labour 6 %(down 1%)
– Ind Alliance 4% (-)
– AA-PBP 5% (up 1%)
– Social Democrats 5% (up 1%)
– Greens 2% (down 1%)
– Rest <1% (down 1%)
Online betting tax receivable in Ireland is estimated to be €19.2m in 2016, compared to €26m expected from retail. This allowed the Government increase the grant to Racing and Greyhounds by €6m to €68m this year. Sharon Byrne, head of the Irish Bookmakers Association, said there were 1,365 retail bookmakers outlets in 2008 and that has fallen to 880 today.
Michael Brennan has an interview with Simon Coveney on all things housing. 12,500 homes were built last year when the amount that should be required is said to be 25,000. “Coveney said there were no houses being built in Dublin which were sold for less than €300k, which was ruling out 40% of people who wanted to buy homes.” The practice in boom times whereby builders paid cash instead of giving 20% of what they physically built before the updated rules came in has not helped either.
There is a two-page focus on Primark’s global expansion. The piece also covers what is an Irish success story with Galen and Hilary Weston effectively starting the firm and Arthur Ryan who was plucked from Dunnes driving it on.Paddy Prior, Seamus Halford and Breege O’Donoghue helped Ryan grow it. Ryan was said to be reluctant to buy the 42 Littlewood Stores for £409m in 2005 but this brought it into the big league.
There is an interview with Operation Transformation star Eva Orsmond and a profile of Jose Mourinho.
David McWilliams reveals that an average Irish person takes 6 flights a year, compared to the EU average of 1.5 and British average of 3.5. He thinks we should celebrate our success in aviation more given that half of the world’s aircraft leasing companies are based here and that Ryanair is an Irish company and some of the world’s top executives are Irish.
Funding of critical drugs is a big issue covered by the Business Post today also.
The small business/Done Deal section is as busy as ever. John McDonnell of Ripplecom is celebrating his revenue rising from €3m to €3.6m.
MedicX Fund which is listed on the London Stock exchange has invested in a primary care centre in Crumlin and Cork. The £323m fund amended its mandate earlier this year to allow it invest 20% of its fund in Ireland.
Joe.co.uk is growing exponentially and has appointed Will Hayward, previously Chief Commercial Officer at Dazed Media.
The Department of Finance is seeking submissions as to how employee share schemes should be treated by the tax system.
Sunday Independent
Oil is now trading over $50 a barrel – up 80% since February.
Hostelworld shares fell 30% this week on news that bookings are behind budget.
A militant shareholder in Providence Resources is planning to take a legal case against Tony O’Reilly Jnr. for not disclosing exactly what he should have to shareholders if he doesn’t step down.
Kapsersky Lab, the global cyber security firm, is planning to set up a big operation in Dublin. It is following other Russian firms and more are expected over the years ahead.
Group sales in M&S rose by 2.4%, with Irish sales rising by 1.1%. The company has 17 stores in Ireland; it closed four three years ago. Irish online sales rose 59%.
Paschal Taggart is back in the race to redevelop Wimbledon greyhound stadium and build 250 homes. A ruling by London Mayor Sadiq Khan will determine his fate.
Finnish Huhtamaki who recently acquired Belfast-based Delta Print and Packaging for £80m is channelling a large part of its global profits through Ireland as part of a sophisticated fully legal tax avoidance scheme.
An investor in one of the Belfry funds that went down is taking on AIB in the High Court. A Loan-to-Value (LTV) covenant was triggered and the assets were effectively taken from the equity holders. The plaintiff is claiming the prospectus warned about enforcement in the event of default” but the plaintiff claims that there was not a default in payment but a breach of the LTV covenant.
Applegreen is looking to roll out business lounges in its motorway stations as a trial it ran in Lisburn seemed to be a success.
There is an interview with Eddie Jordan, whose investment portfolio includes a share in up-market publishing house Debrett’s, shares in Valeo foods and a New York skyscraper.
Dan O’Brien has an article on how fintech is going to transform how we do business.
Norman Crowley, CEO of energy efficiency company Crowley Carbon, is interviewed in the Sunday Indo. He fancies himself to bring a typical food company with a €1m energy bill a 35% saving. From Cork, he has a fascinating CV including being part of the founding team at Inspired Games. He owned 20% of it.
An alliance of non-Eir Telcos are putting big pressure on Comreg to look at Eir’s practices in the provision of wholesale services. KPMG and Cartesian Limited are both reviewing the wholesale operation on behalf of Comreg.
Dan White also cover AIB’s numbers. Underlying pre-tax profits before exceptional items rose by 17% from €1.1bn in 2014 to €1.29bn last year. BOI’s market cap is seven time its underlying profits. Assuming Dan White’s figures and assumptions are correct, then this would value AIB at €9.2bn. This is below ISIF’s most recent valuation. European bank shares are down 15% across the board. AIB’s loan book shrank by 7.5% in 2015.
Stephen Acheson, managing director of Acheson and Glover, one of the largest independent building materials manufacturers in the UK and Ireland, gives some simple but excellent advice. “While it is essential to have a great product, it is only one part of the jigsaw, and you must back it up with excellent service. Treat your customers as you would wish to be treated yourself. Never be afraid to admit when you have screwed up. Every dispute or problem can actually lead to an opportunity, if you deal with things in a decent and honest way. Have a plan in place for when the worst happens – you won’t have time when you’re in crisis.”
Joanne Davey founded Joanne’s 18 months ago and is going from strength to strength in a crowded market place. Her Absolute Nutrition range of Paleo foods and high protein foods is now stocked in 30 SuperValu stores, all of Dublin’s four Fresh supermarkets, Cavistons, Discount Supplements, BodyFirst Nutrition and The Protein Store, as well as a variety of gyms and a number of other smaller shops across Leinster.
Richard Curran’s piece this week covers how the booming film and television studio sector is all the rage with the rock and roll scene. Bono and some Hollywood money are backing James Morris’s proposed film studio venture at the former Irish Glass site in Dublin. If it goes ahead, it opens up some fascinating possibilities. Bono also appears to be backing a proposed new film studio in Ringsend. Meanwhile, former U2 manager Paul McGuinness owns 33pc of the long-established Ardmore Studios in Bray. Former U2 accountant Ossie Kilkenny will have an interest in two studios – Ardmore, where he is also 33pc shareholder, and a new film studio venture in Limerick, where he is an investor. Ardmore chief executive Siun Ni Raghallaigh is also involved in the Limerick studio venture, called Troy Studios, which is expected to open for business this year and is backed by Ion Equity, Fifcon Nominees, Pinergy investors Jeff Ward and Paul Curran, as well as Kyran McLaughlin’s (the Davy chairman) children. There is also Joe O’Connell’s Ballyhenry Studios in Wicklow where the Vikings television series was made and he has his own plans for expansion.
Curran also picks up on Fianna Fail’s Micheal McGrath’s assertion that “rich parents” were using a loophole to avoid paying tax. According to McGrath, some 740 families availed of the dwelling house exemption last year, which enables parents to gift a house to their children without incurring inheritance or gift tax of 33pc. This involves houses other than the family home.
Curran also covers the recent Brexit polls which have put the ‘Remain’ camp well ahead at somewhere between 13 and 18 points clear of the Leave camp. He reminds us, however, that “British polls are notoriously unreliable. You also have to bear in mind the turnout. People are always more likely to turn out to vote for a change to something than to keep the status quo.”
Sunday Times
Fianna Fáil and the opposition parties want greater protection for householders in the sale of loans. Fianna Fáil has proposed changes to legislation introduced last year. The move comes as Ulster Bank and Danske Bank prepare loan sales that are expected to result in the transfer of thousands of mortgages to unregulated hedge and private equity funds.
Brian Carey points to some of the downsides of Central Bank intervention and the regulation of variable mortgage interest rates. The Central Bank does not want the power to inflict price controls on banks. It views price controls as a barrier to competition. “As long as the potential for competition exists”, it said in a report last year, “the cope for profiteering is limited over the long run”. Carey believes measures to control interest rates and moves to put a stay on house repossessions which reduce banks’ security will continue to impact on the banks profitability. The PTSB share price has already halved and AIB’s proposed IPO could be undermined as a result.
Carey also highlights the interesting sequence of events in the head-to-head between Johnny Ronan and Greg Kavanagh’s New Generation Homes for the recent land purchase in Spencer Dock from receivers EY. Kavanagh appeared to be in pole position with approved funds from M&G not just to buy the site, but to build it out. His last bid was reported as €45m and indicated they would be willing to pay more. It appears CIE had the ultimate say as to who the successful bidder was and they sided with Ronan.
Michael O’Leary won’t be happy with European Union law EU261 – airlines must now compensate any stranded passenger discommoded by air traffic controllers’ strikes.
Management and staff look set to be burned to the tune of €3.6m post Worldview Capital’s successful examinership of Petroceltic. This payment was due to management and staff in the event of a change of control in the company. As this happened as a result of examinership, they will only receive 5% of this which is the crammed down payment to creditors under the proposed creditors scheme which, if accepted by creditors, will be presented to the High Court for approval. Things are set to get worse as well as Worldview have plans to replace all directors with their own representatives and reduce staff numbers. On the positive side, Worldview has said it will make up to $100m available to Petroceltic in the next three years to fund the development of its assets. Gavin McLoughlin in the Sunday Indo also covers the issue.
Citadel Securities, founded by Ken Griffin, is planning to set up trading operations in Dublin in the first quarter of next year. The firm handles 14% of all trading in US shares.
Cormac Lucey covers the dissatisfaction in the US with the politics being offered to them, which has led to the rise of Bernie Sanders of the left and Donald Trump on the right. Lucey believes low economic growth is a major factor in this. Household incomes in the US have been stagnant since the turn of the century. In 2014, median household income was $53,657. This contrasts with a median income of $57,843 in 1999.
Bernard Somers has unexpectedly stood down as chairman of quoted software company Escher Group to be replaced by Nick Winks, a British corporate turnaround specialist.
Liam Condon is spearheading Bayer’s $62bn cash bid for Monsanto alongside Werner Baumann, the chief executive of the German chemical manufacturing company. Condon is head of Bayer’s crop science division and said last week that the proposed merger would form a new global leader in an industry worth about $85bn.
CMS distribution, an electronics distributor owned by Mayo man Frank Salmon, is targeting revenues of £300m this year after buying Widget Group, a UK rival that wholesales Fitbit business trackers and Sphero BB-8 robot toys from the Star War franchise. CMS now employs 260 people and will continue to scale through acquisitions as it threads its way to an IPO.
Goldman Sachs has taken control of the Kill International Equestrian Centre and appointed Tom Kavanagh as receiver to the Co. Kildare venue which includes an Olympic-sized indoor arena which can hold up to 2,500 spectators.
Simon Harris, the new health minister, has been advised to reduce confusion among the 2.1m people with private health insurance by cutting the 360 plans on the market. Department of Health officials have also advised Harris to limit the erosion of benefits, especially medical treatments needed by older people.
The Heidi Klum Intimates lingerie chain and Havaianas, the flip flop retailer, have opened in the newly expanded Kildare Village. Kildare Village spent €50m on a phase-two expansion that opened last year and experienced a 26% increase in sales last year.
The Irish Stock Exchange (ISE) has been pressurising the government to execute a plan to make the transfer of shares of listed companies exempt from stamp duty.
Kevin Nowlan, the chief executive of Hibernia Reit, earned €4.9m last year when the quoted property group reorganised its corporate structure. Nowlan was paid €2.9m in cash and shares when the group took its management team in-house, and a further €2m in “performance related payments and top ups” for 2016, according to the company results and is due another $5.6m. Hibernia director Frank Kenny was paid €1.9m for the reorganisation and €1.4m in performance related pay, and is due another €3.8m. Bill Nowlan, also a director, was paid €1.4m and €1m in performance pay and has €2.8m in prepaid remuneration. Hibernia made €136.3m pre-tax profit to end of March this year, its assets are valued at €927.7m.
The Roche family’s €18m rent roll from Debenhams will likely come under threat as part of the Debenhams examinership, as will staff terms and conditions and work practices which the Roche family made sure were transitioned when they sold the stores to Debenhams in 2006.
Sponsorship revenues for this year’s Taste of Dublin is up €160k or 20%. Ticket sales are also 17% higher than this time last year.
Lucey Technology, a tech investor that has campaigned for better tax breaks for start-up companies, is facing a fight with the Revenue Commissioners.
Davy Property Holdings is to sell No. 10 Ormond Quay for €2.8m, which hosted the nuptials of TV presenter Pamela Flood among others.
Eamonn Glancy has been named as chief operating officer of Goodbody Stockbrokers, a newly created position in the firm.
Nick Webb has a number of interesting articles again this week. John Moran former Department of Finance boss has been keeping in good contact with his former colleagues; he is now a very active lobbyist for Nomura, the Japanese investment bank and Uber.
Restaurateur John Farrell, the man behind restaurant of the year, Luna in Dublin, is working on a plan to roll out a chicken version of Shake Shack, possibly called Blackbird. The first one is to open in Dublin in February, followed by London and New York.
David Arnold is selling his Foxrock home Kenure. The asking price is €5.5m if sold, which will make Kenure the most expensive house sold in Foxrock since the boom. The previous record is held by David Arnold when he paid €31m to buy Gortanore, a Foxrock house, in 2006.
Brian Weakliam’s Banhawk, which is chaired by former AIB Corporate Finance head Mon O’Driscoll, raised €300k late last year. Investors include Joe Davy, Bupa boss Martin O’Rourke, Shane Cooke and Roger Conan, Dermot Desmond’s onetime right hand man.
Samantha McCaughren has an excellent article on the retail landscape and the changing trends.
Gavin Daly interviews Alexander Doyle, the Fleetwood Paints boss.
Karena and Jennie Hutton, the sisters who set up Juicy Lucy in April last year, selling cold pressed fruit and vegetables on market stalls, give their views on the challenges and red tape that start-ups face.
Sandra O’Connell’s “How I made it piece” is with Ian Dodson, founder of the Digital Marketing Institute, who explains how working before he went to college gave him confidence in what he wanted to study and focus for the future.
Other News
WisdomTree Investments Inc.(NASDAQ:WETF), who manage the popular ISEQ 20 exchange-traded fund (ETF) on the Irish Stock Exchange, have announced the buyout of the remaining minority stake in its European entity, held mostly by European co-founders Hector McNeil and Nik Bienkowski, two ETF pioneers. Hector and Nik were advised by John Hannon and John Lacey’s FinRes.
51% – Proportion of leading economists surveyed by the @FinancialTimes who expect a Fed rate rise in June or July. Source:@IrishTimesBiz
4% – Fall in the number of @AIBIreland mortgages in arrears in Q1 2016, while new lending drawdowns increased 17%. Source:@IndoBusiness
7.9% – Seasonally adjusted unemployment rate in April, down from 8.1% in March. Source:@CSOIreland/@IrishTimesBiz
>70% – Proportion of small firms in Ireland which plan on hiring additional staff this year. Source:@SFA_Irl/@IrishTimesBiz
‘HR departments are generally more focused on the process than the purpose’ David Collings Professor of HRM DCU speaking @SFA_Irl #sfaconf
Culturally in Ire, most small bus owners are averse to giving equity to Investors and thus curtail their growth@SFA_Irl vision doc #sfaconf
People must believe that owning 70% of something big is better than owning 100% of something small @SFA_Irl #sfaconf SME vision document
AJ Noonan is making great case for reduction in Capital Gains Tax for the good of the overall economy here @SFA_Irl #sfaconf
7.1% – Rise in average house prices nationally in year to April, with prices in Dublin up 4.6%. Source:@CSOIreland/@IrishTimesBiz
1/8 – Latest @paddypower odds on a ‘Remain’ vote in UK referendum, implying an 83% probability after margin is allowed for.
€3,400 – Annual cost per worker in Ireland of interest payments on the national debt; this figure was €900 in 2007. Source:@IndoBusiness