Sunday Business Post
Facebook is on the hunt for a new HQ in Dublin and has appointed DTZ to find it 110,000 sq. ft. as it plans to add 1,000 new jobs in Dublin. Facebook currently employs c.1,600 in Ireland, having hired c.300 in the last year.
Local councils have been provided with additional powers, similar to those of the Revenue Commissioners, to target businesses that haven’t paid their commercial rates charges. Councils will now be able to appoint sheriffs, dock salaries and withdraw state licences from businesses.
“The new Central Bank rules for first-time buyers combined with the incentives in Budget 2017 will push the price of homes further upwards in 2017, according to Killian O’Higgins of property consultancy WK Nowlan.”
The High Court has ordered Gayle Killilea, wife of Sean Dunne, to provide tax returns over a nine year period to Sean Dunne’s bankruptcy official. The period sought will cover the substantial asset transfers from her husband Sean Dunne, estimated at up to €100m.
Ballycarg Developments, a company with links to New Generation homes is in court over a €698,000 fee claimed by Orca Financial.
TeamBuddy, a Dublin-based start-up in the workforce software space, is planning to double its staff count in Ireland and open an office in the US.
Richard Branson was among the under bidders for the Central Bank’s current headquarters on Dame St., which was bought by Hines for €65m. Branson had plans to turn the iconic building into a 260-bed luxury hotel.
Property investor Tetrarch is to target the hostel market with the launch of a €40m dedicated platform for investment in hostels.
BHSL, a company specialising in converting chicken manure to energy and backed by former Kerry Foods boss Denis Brosnan, has secured €13m in export deals to Britain since the summer; the company is now predicting sales in 2017 of €40m.
A Dublin-based start-up, Wia, which has developed a cloud-based platform for the internet of things, is raising €1m to take on the German and US markets.
The PorterHouse Group is planning to open its second venue in New York and is reported to be investing around $600,000 (€565,000) in it.
Ian Guider and Noel Rock have pieces on INM’s pension issue.
Irish-man Aidain O’Meara has been appointed as president of VF International, the company behind the global clothing brands of North Face, Timberland and Vans.
Ulster Bank last month made a €1.5bn payment to its parent, RBS, and Ulster Bank’s CEO, Gerry Mallon, said last week that “Ulster intends to return more of the capital it received now that the bank has returned to profitability”. RBS invested c.€18bn into Ulster Bank during the financial crisis.
“Dublin fintech company Quaterion Risk Management is working with an international team to develop a new way to allow banks to prevent the next financial crisis.” In partnership with Columbia University in New York and Tullett Prebon Information, they hope to “work with international investment banks to develop a better way to standardise risk-modelling, improving transparency, accuracy and efficiency.”
A sign of the times, Hampers and Co., a luxury gifting company, has experienced a 30% increase in orders this year, with sales expected to hit €1.5m in 2016 – the business peaked at €2.2m in 2005.
David McWilliams has a very interesting piece on Italy’s economic struggles and highlights the introduction of the euro as a key turning point. In the post-war decades, Italy regularly devalued the lira versus the deutsche mark, which allowed it to maintain its competitiveness. Even after taking into account these devaluations, Italian equities outperformed German equivalents by 16% from 1979 to 1998. This trend has reversed completely since the introduction of the euro, with Italian stocks underperforming German stocks by 65% since it was introduced. McWilliams believes the real question is not whether Italian banks can cope with short term liquidity problems, but whether the Italian state itself is solvent. McWilliams concludes that it is an inevitability that Italy will become insolvent and the question being when it will occur.
Enterprise Ireland-backed Enterpryze has secured €3m funding from private equity (article does not say from whom) and plans to create 200 jobs over the next three years. Enterpryze is a spin-out of Milner Brown, an Irish-owned company which was established to implement business management software by SAP. Enterpryze was set up to bring elements of SAP to SMEs without the big integration and customisation costs.
Wicklow man Dalton Philips, ex-head of Morrissons, has been appointed chairman at Byron Burger. He is also a non-exec on the One51 board.
The word on the street states that Rupert Murdoch is interested in buying more radio assets in Ireland at the right valuation.
Dómhnall Slattery received an outstanding contribution gong at the aviation industry awards during the week. Slattery came through the Tony Ryan school. Most recently, he founded Avolon which was acquired by Chinese giant HNA for $2.5bn.
“Showtime analytics, the Dublin start-up selling data analytics to the cinema sector, has secured €1.2m [investment] from a subsidiary of Chinese e-commerce giant Alibaba.”
John Moran, the former secretary general at the Department of Finance, concludes his three-part series this week. This week he writes about how we need to consider other alternatives to Dublin as the primary growth engine for the country. He puts forward a number arguments for developing regional cities outside of Dublin.
– Traffic congestion, poor infrastructure and housing shortages show how poorly we have planned for the growth in population. If Dublin is to continue its trend towards housing 50% of the population, we need to penalise car use and invest in public transport. Cars sit idle for 96% of the time on average, resulting in a fifth of the land in some cities being used for storage.
– Moran suggests building a Western Economic Corridor, a motorway linking Limerick to Waterford, meaning that Cork, Waterford and Galway would only be a one-hour bus journey from Colbert Railway Station in Limerick.
– The cost of new housing and related funding challenges falls measurably when you leave Dublin’s expensive cost base, without reductions in quality. Savings should be used to provide better services, not fewer, keeping the spending per capita constant.
– A high-speed train could reduce commute times by half and shrink the width of the country.
– Top class education can be a compelling reason for people to live in an area. Prioritising regional cities will align with national objectives for balanced regional development.
– Hospitals could be built at the end of a one-hour train journey in a regional city less expensive than Dublin
Sunday Independent
British Growth Fund, a British investment firm, is reported to be preparing an SME focused fund in conjunction with the Ireland Strategic Investment Fund (ISIF). The fund is expected to range from €50m – €100m in value and, based on its UK strategy, usually invests between £2m – £10m for a board seat and a minority stake. Recently, ISIF took a 32% stake in non-bank lender Finance Ireland for €30m and has a €30m fund alongside BMS Finance and a €60m fund alongside Causeway Capital Partners. It also has capital commitments in the c.€300m Cardinal Carlyle Ireland fund, the BDO Development Capital €75m fund and MML Growth Capital Partners €125m fund. There has never been as much capital available for M&A or development capital in Ireland.
“Up to 30 jobs are to be created by Ikea at a new customer support call centre in Dublin. The furniture and home furnishings giant, which this week posted annual sales of €152m at its Irish operations, plans to open a customer service hub at its Ballymun store next May.”
Richard Curran’s pieces this week:
– He provides commentary on the current outlook of the Irish banking sector. Irish banks have done well in tackling legacy debts and seeking to maximise the leverage they hold from the apparent lack of competition in the market. However, ratings agency Fitch has reduced its outlook for the Irish banks from positive to stable during the week, as it digested the likely implications from Brexit for the Irish economy and the banks’ exposure to the UK.
– Bus Eireann trade unions are talking about sitting down with shareholders to come up with a new model for doing business. Curran thinks that unions are wrong in their bid for a 21% pay rise. However, he commends the trade union for recognising the need for a whole new bus market structure and provision of subsidised services.
Teeling Whiskey, a Dublin-based distillery which produces four whiskey brands and a Spirit of Dublin poitin, is recruiting 10 staff for its visitors centre in the Liberties and is hiring a team of 6 brand ambassadors for its sales and marketing division in the US. The company, founded by Jack Teeling, more than tripled its revenue to €24.5m last year and posted a pre-tax profit of €2.9m.
Dublin City Council has declined a request to refuse planning permission for the redevelopment of Clerys. The city planners have attached 28 conditions to the permission granted to Natrium. Natrium, headed by chief executive Deirdre Foley, intends to redevelop the interior of the existing building into offices and retail units, as well as creating a “rooftop destination” consisting of bars and restaurants.
“Dublin Airport and RTE launched DUBstream, a new entertainment service offering short Irish entertainment clips from RTE at the airport.”
A court order freezing almost €100m of Irish-based assets belonging to Mikhail Khodorkovsky, the former CEO of Yukos Oil Company, has been revoked. The assets have been frozen for over 5 years while Gardaí investigate money laundering offences. Judge Timothy Lucey threw out the freezing order last week on grounds that he didn’t believe it was reasonable to maintain it.
BDO’s latest Optimism Index has found that that optimism among Irish retailers is at a three-year low and just 1 in 20 firms has a plan to deal with the potential customs border with the North following the Brexit vote. Michael Costello, managing partner of BDO Ireland, offers his commentary within the article.
Paul Quinn, the Government’s chief procurement officer, said the Office of Government Procurement was “a bit behind where we need to be”. The office launched in 2013 with the intention of saving €500m over a three-year period. According to Quinn, the department had saved €160m to the end of 2015.
All three papers cover the takeover deal announced by Fyffes last week. Fyffes, an Irish fruit and fresh produce company, has entered into a €751m takeover deal with Japanese firm Sumitomo Corporation. The price achieved represents a 49% premium to Fyffes’ closing share price of €1.50 on Thursday. The deal is reported to have support from 30% of existing shareholders including the McCann family. Sumitomo has a €4.7bn cash pile on its balance sheet and will be well placed to continue the acquisition growth strategy that was being pursued by the McCann family, David McCann is the current CEO. The Sunday Independent article goes on to provide the company’s extraordinary history as one of Ireland’s great corporate success stories and is well worth reading in full.
Recent data suggests that German industry, whose output rose less than expected in October due to stagnating factory output, will only witness a mild recovery in the last three months of this year.
The annual Pendulum Summit, founded by former rugby international and event organiser Frankie Sheahan, is set to kick off in Dublin next month. The event will feature talks from Robin Sharma, John Dermartini, Keith Cunningham, Lisa Nichols, Jack Canfield and Keith Ferrazzi.
This week’s interview is with Grainne McAleese, general manager of Alexion in Ireland, and is well worth the read.
Mark Evans has a piece this week on Aer Lingus’s decision to replace its long-established Gold Circle scheme with a new loyalty entity, AerClub. The new system has led to a lot of backlash on social media platforms with users voicing their confusion and anger.
In an effort to build out the company’s brand, Littlewoods Ireland, owned by the Barclay brothers, has sponsored the All-Ireland hurling and camogie championships as part of a three-year deal. Market sources indicate €3m was paid for the deal and an additional €2m will be spent on marketing over the next 3 years. Managing Director Geoff Scully expects this sponsorship to outperform past sponsorships the company has undertaken. Accounts for the year-ended June 2015 show revenue of €62.4m and operating profit of €2.5m.
Sunday Times
ISME, the small business lobby group, has contacted the Minister of Finance Michael Noonan directly in relation to a security practice within the two pillar banks Bank of Ireland and AIB, whereby company directors are asked to sign undated letters of resignation as part of the collateral for the loan.
Brian Carey covers a number of interesting areas again this week in his agenda column:
– Carey articulates the backdrop to the recently announced An Post price rise. “It looks like the carrot has been tied to the wrong end of the stick. In the natural order of the distressed semi-state. A new overlord arrives and promptly hires a consultant who recommends fewer roots and a lot less branches. A rescue plan is drawn up, a rationalisation proposed. Then there is a strike, followed by an accommodation and finally a price rise.” Richard Curran, of the Sunday Independent, writes that An Post is forecast to make a loss of €15m this year and how it is time for the State-owned postal group to try something new, if only someone could figure out what it should be.
– Carey slates the proposed Fianna Fail bill to place a cap on mortgage interest rates and describes it as the bill that nobody wants that may become law.
– Canadian billionaire Prem Watsa’s Fairfax sold down half of its shareholding in Bank of Ireland on Friday and is up €600m on its original investment.
The Investor Compensation Company (ICC) has clashed with the liquidator of Custom House Capital, Kieran Wallace of KPMG. The ICC is demanding clarity on its final exposure for compensating clients of Custom House Capital; the liquidator has so far only certified 500 of 1,977 applications for payment by investors seeking to recover funds. The ICC has also raised concerns about the level of fees being charged by the liquidator.
The Irish subsidiary of football super-agent Jorge Mende’s Gestifute paid €12m in dividends last year.
Cormac Lucey thinks the recent election of Donald Trump and the Brexit vote will in the long-run lead to increased “vigour in the US and UK and is likely to hasten the day that the Eurozone interest rates are increased. That is not good news for a country with a heavily indebted government and still heavily indebted citizens.”
Digicel, the Caribbean and Central American mobile operator owned by Denis O’Brien, experienced a 14% fall in earnings to the end of September. Analysis from Barclays suggests the business has been affected by adverse currency movements in Papua New Guinea, its third largest market.
Hines, which recently purchased the Central Bank of Ireland HQ on Dame Street, is close to becoming the largest player in student accommodation in Dublin. The US property fund is believed to be lining up a purchase of the student accommodation interest of Oaktree Capital Management. Oaktree has a total of 1,460 student beds across four separate developments; the value of the assets are c.€230m.
Shannon Group, the mid-west tourism company and owner of Shannon airport, will this week launch a new retail brand, the Shannon Irish Design Store. The first store will open in Bunratty Castle.
IPUT, the Irish property investment fund, is taking control of Wilton Park House, the Dublin headquarters of IDA Ireland; the move may signal plans for a redevelopment of the property.
Calpe Insurance Company will begin underwriting motor cover in Ireland from next month, making it the third Gibraltar-based player to enter the market in recent weeks.
A Dublin energy start-up is planning a €53m solar farm in Athenry, to cash in on the power needs of the new Apple data centre planned for the region.
Cotswold Outdoor adventure clothing company, which has 70 outlets in the UK, will open its first Irish store on Trinity Street just before Christmas.
Nord Anglia Education, a $2.5bn US-quoted group, has been lined up to operate a new international school being planned for south county Dublin by serial education entrepreneur Barry O’Callaghan.
Saco, a Bristol-based developer of aparthotels, is believed to be the preferred bidder for Zanzibar super-pub in Dublin city centre. The pub is close to being sold for €10m, twice the original ask by agents CBRE. Saco operates and manages a portfolio of more than 900 apartments in cities across the UK. It also operates and manages over 35k apartments in 50 countries for selected partners.
Google is looking at investing in Irish energy projects as part of its push to generate all its power needs from local renewable sources.
Maybourne hotel group, the London luxury hotel business run by Irishman Paddy McKillen, will be worth more than £2.5bn following a revamp of its Claridge’s and Berkeley hotels.
The National Wax Museum Plus is planning a move to a high-profile premises in Dublin city centre, after being squeezed out of its former premises in College Green after a legal row.
Pre-tax profits at Irish chocolatier Lily O’Brien’s were €1.8m last year.
Walsh Mechanical Engineering, a Mayo-based company, has appointed Neil Hughes of accountancy firm Baker Till as interim examiner. The company made a profit of €400k in 2015 but is believed to owe creditors €3.3m.
Carma, the carpool technology firm controlled by former Dragons’ Den investor Sean O’Sullivan, is expected to generate positive cashflows this year.
Nick Webb’s inside track this week:
– Mount Anvil, Killian Hurley’s London-based building company recorded revenues of £252m and a profit of £66m.
– Law firm Matheson’s role in facilitating the large-scale paring back of certain fund tax bills through its use of registered charities to avail of the vagaries of section 110 is under review within the practice.
– Dan Tierney’s pharma group Bimeda has agreed to buy the rights to Ceva’s US equine business.
– Ray Hernan, the former Ryanair director of finance, has been hired by Martin Nolan, the Bus Eireann chief executive.
Niall Brady and Philip Connolly’s business focus piece covers the surge in job opportunities, sectors experiencing the most growth and where our skill shortages are.
Brian Carey conducts the business interview with Pat Byrne, the CityJet chief executive.
Sandra O’Connell writes about stress and entrepreneurs and conducts a frank and open interview with Padraig O’Ceidigh who suffered a heart attack which he attributes to stress.
The Indo cover the sad passing of businessman Patrick (Paddy) Larkin(78), “founder of Mainline Meats Limited in Northern Ireland. Mr. Larkin was one of the North’s most prominent businessmen. A renowned philanthropist, Mr. Larkin was instrumental in the setting up of the inaugural Southern Area Hospice (SAH) in Newry and had extensive business and charitable interests.”
Twitter
9.7% – The increase in rents in the year-to-November, according to @CSOIreland. @IndoBusiness
30.8% – The year-on-year increase in residential housebuilding in the 12 months to November. @IndoBusiness
3% – 4% – The projected rise in house prices next year, according to @FitchRatings. @IrishTimesBiz
€33bn – The amount of Irish goods and services exported to Britain last year, according to @CSOIreland. @IrishTimesBiz
2.9% – The estimated growth in world GDP in 2016, down from 3.1% in 2015, according to @OECD. @examinerbiz
4% – 5% – The projected reduction in British GDP in the case of a hard Brexit, according to @NIESRorg. @IrishTimesBiz
7% – The predicted increase in house prices over the next two years, according to @ESRIDublin. @IrishTimesBiz