Sunday Business Post
Fianna Fáil and the Independents are putting big pressure for a wide scale state probe into the €1.6bn sale of NAMA’s Northern Irish loan book. The rising pressure for the probe is covered across the other papers as well.
Last week US car parts company Johnson Controls merged with Cork-based Tyco. The CEO is adamant the deal was purely commercial and not for tax reasons.
Last year Applegreen added 48 outlets to bring their total number to 200 in Ireland and the UK and plan to open a similar amount this year. The conversion of sterling earnings to Euro is weighing a little on the company. It is also kicking on with its pilot expansion in the US. The Sunday Times reports that Applegreen is expected to lodge its first planning permission for a services area in Britain before the end of the year.
Tim Collins, CEO of Newstalk, expects that it may reach breakeven in the next 18 months which “would represent a marked turnaround”. Newstalk has a market share of 6.3% and 380k listeners and is targeting the 25-54 year old age group.
“Deutsche Bank has emerged as the preferred bidder for NAMA’s €250m Project Beara, which is secured on loans linked to the Shipton Group, a development vehicle controlled by Cork’s Love family.” This is the fifth loan book that Deutsche have bought.
Seneca Healthcare look to be a strong force in the healthcare market. Former Tánaiste Mary Coughlan has joined an already extremely heavy hitting board. Seneca was founded by Barry Kemp with his brother Adam and already is working to develop three greenfield 70-bed nursing home sites.
“An Bord Pleanála last week granted Comer permission to develop 160 stables on two levels, a two-kilometre gallops, a swimming pool for horses to exercise in and track-viewing areas on the floors of the stables.” According to the documents filed with the Bord, Comer, which is run by brothers Luke and Brian Comer, has 300 horses in training at the moment most of which are housed on his 1,000 acre Palmerstown House and his original Dunboyne base. Comer and his brother bought it for €7m. Hugh O’Regan had amassed €171m of loans on it originally. In addition to their Irish and English investments, the Comers have 30 shopping centres in Germany and 450k sq metres of waterfront property in Berlin.
Movidius, who sold to Intel for €355m last week, had been considering an IPO, according to Brian Long of Atlantic Bridge who were a key investor. Brian Caulfield, whose firm Draper Espirit are also an investor, writes about the experience and Róisín Burke also chronicles the great Irish success story. The business began over a few pints in the Porterhouse pub in Phibsboro pub eleven years ago between Sean Mitchell and David Moloney, the two founders, who previously worked for Parthus. They got an initial €1.3m from Enterprise Ireland and the BES scheme. At the start of 2013, there was talk of the company possibly running out of cash and Atlantic Bridge were the white knight that saved the day. This was a frontrunner to be Ireland’s first tech unicorn (billion dollar company). Caulfield credits the success to the vision and the persistence of the founders.
The deal is also covered in the Indo and Times. The Times reports that Draper Esprit is due to net a €23.4m profit from the sale. Caulfield will see his stake valued at €27m after investing €3.6m three years ago, while the Indo notes that Intel has also put in place a sizeable retention pot to keep the Movidius management team and 180 staff on board going forward.
Back to the Business Post. A Dutch business man is fighting his appeal against a decision to grant planning for a €24m wind farm in Tipperary and is willing to go to court if a Bord Pleanála rule against it. Other high profile people who have also opposed it include Tory Life Peer Lord Magan and Annemarie and Aidan O’Brien. In a submission to Tipperary County Council, the O’Brien’s claimed the area “is extremely sensitive to environmental change due to the high concentration of equine facilities”.
Pat McCann of Dalata said it would be “madness” if the Government increased the hospitality VAT rate from 9% back to 13.5%. He posted a strong set of results last week with pre-tax profits of €18m for the first half of the year and revenue per available room of €74.90. He is not as concerned about the threat of AirBnB as he would be if he was operating in an environment where average room rates were a lot higher.
KPMG is hiring 500 new staff to service the increased workload as a result of the recovering economy. It also thinks there will be firms coming to Ireland post-Brexit and it wants to serve them also. 300 of the roles will be for graduates and 200 for more experienced professionals.
Merrion Pharma is voluntarily winding up and handing back €4.5m to Investors. BDO are the liquidators.
BDO’s EII fund is pumping €1m into Niall McGarry’s Maximum Media who own Joe.ie and Her.ie and is expanding into the UK. According to the article, Maximum Media’s interest rate on money is 2.5% APR. John Bowe of Mazars advised on the deal which also included bank debt. The Times also covers the deal. The company is majority-owned by former advertising executive Niall McGarry and former rugby player Jerry Flannery.
There is a four-page report on Larry Goodman in the Business Post. It looks like compelling reading, including an article from Susan O’Keefe who has a long history of investigative journalism on Goodman.
Clare company Modular Automation has doubled its size with a €3m investment.
Patrick Coveney is joining the board of Core Media.
There is a focus on the Corporate Social Responsibility awards and a focus on Credit Management.
Michael Murray has an interesting article on why transparency on succession planning should be given as much weight as transparency of directors’ remuneration in PLCs.
The US administrations are about to bring in rules that will make it easy for entrepreneurs to get a special five-year visa.
There is a special magazine in the Business Post sponsored by Enterprise Ireland featuring a hundred top Irish start-ups.
Sunday Independent
“Former NAMA official Enda Farrell, who received a two-year suspended sentence for disclosing confidential information relating to the agency, provided gardaí with the names of four other NAMA employees whom he claimed either assisted him, or were involved in leaking sensitive information themselves.” This week’s focus piece is on Farrell.
Susan Dargan, head of State Street Ireland, is calling for planners to overhaul the existing height restrictions to allow for more high-quality apartments in Dublin. She fears that if there is a shift of financial services firms to Dublin as a result of Brexit, accommodating those workers could be an issue. Dargan is also the features of this week’s interview.
Finance Minister Michael Noonan has announced plans to amend S110 of the Taxes Consolidation Act 1997 as a result of public outcry relating to its use by “vulture” funds who lawfully avoid paying tax on their Irish profits. The proposed law, which came into effect on Tuesday, restricts tax deductions to property funds that are not paying tax in Ireland – or are not in an EU double-tax treaty country – on the profits derived from their Irish loan books.
Cardinal Capital Group has warned it would be “damaging to Ireland’s interest” if the proposed amendments prevent S110 being used legitimately for its intended purpose. The company’s spokesperson illustrates the law’s benefits saying: “The appropriate structuring of investment vehicles supports the attraction of international capital to Ireland” and that Cardinal has used this capital to finance various residential, commercial and social housing projects in Ireland.
The proposed $3bn merger between food services groups Sysco and Brakes was cleared by the EU Commission, despite concerns raised over its impact on Irish food manufacturers. Sysco, owner of Pallas Foods in Ireland, is the biggest supplier to the restaurant and catering trade, while Brakes is the third largest food supplier in the country. Bain Capital sold Brakes to Sysco after pulling a planned IPO earlier this year.
TD Mick Wallace has written to the EU Commission: he is seeking clarification on whether the tax exemptions granted to non-residents and foreign investors in Real Estate Investment Trusts violate the EU’s rules on state aid. He is concerned about the tax exemptions impact on the Irish Exchequer.
Deutsche Bank has opened a new data lab in Dublin, creating 40 new data jobs and will create a further 125 technology roles supporting its global banking divisions.
The Central Bank’s human resources unit, the department in charge of solving the bank’s long-running employee retention problem, had the highest rate of staff turnover in 2015 at 17%. This figure rises to 26.2% when adjustments are made for internal churn. The 26.2% is more than three times the overall annual staff turnover at the Central Bank which is running at almost 8%.
RTE is projecting losses of up to €20m for the current year, with Bill Kinlay, chief executive of Group M, suggesting that TV advertising will be down 20% in October due to Brexit uncertainty. Dee Forbes, the new director general, met with Minister for Communications Denis Naughten to discuss the seriousness of the financial difficulties facing the organisation. RTE’s biggest hope for a funding boost now lies in licence fee collection, with high evasion levels costing it c. €30m per year.
Designer Louise Kennedy has launched a new collaboration with exclusive British shirt maker Turnbull and Asser, whose shirts have been worn by successive James Bonds.
Professional services firms Mazars and Mason Hayes & Curran shared payments totalling €300k for research work commissioned by the Department of Jobs, Enterprise and Innovation.
Richard Curran writes on the current pension crisis that gained immediate traction when pensions giant Aviva spelt out the size of the gap earlier in the week. Aviva estimates that the gap has increased in the last six years from €20bn to €27.8bn and that if you are going to retire in the coming 40 years, you need to save an additional €1,000 per month.
Curran also writes on the sale of Movidius and the long-awaited IPOs of Ardagh and AIB. Paul Coulson’s Ardagh has had to change IPO plans several times and is now talking about getting the IPO away in the first half of next year by offloading 5% of the group. AIB chief executive Bernard Byrne said that the bank has been fixed and is ready to IPO once the government pushes the button.
The Times reports that Ardagh will strip out another €270m in dividends this year following its bond issue, which was fully subscribed despite a Moody’s note that criticised dividends ahead of debt pay down. It will raise Ardagh’s leverage to 7.4 earnings. 60% of the dividends will go to Paul Coulson. The Business Post notes that Coulson will make a rare public appearance at an Institute of Directors function later this week.
Back to the Indo. Three former Tesco executives, Carl Rogberg, former finance director; Christopher Bush, former MD; and John Scouler, the former commercial director for food, have been charged with fraud and false accounting as part of an investigation by the Serious Fraud Office (SFO) into a £263m accounting scandal. The trio used to work under former chief executive Philip Clarke and could face up to 10 years in prison if they are found guilty.
Dan O’Brien writes on inflation this week. While inflation as a whole may be flat, some interesting developments have occurred in the underlying mix:
– Consumer price levels peaked in September 2008 and currently remain around 2% lower than they were eight years ago.
– Motor insurance costs are up 60% since autumn 2014. Healthcare prices have risen by just under 10% on average since 2008 and the price of education has risen by 150% since 2000.
– Clothing and footwear prices have fallen by a massive one-third in price on average since the turn of the century and food and drink now cost as much as they did 15 years ago.
Dublin City Council is exploring the possibility of introducing a 2% levy on tourists with the money intended to go to the arts. The tax will be placed on anyone requiring an overnight stay in a hotel, guesthouse or B&B. David Webster argues against the planned tax. He argues that the new tax would result in fewer visitors and less money being spent across the city and filtering down into business, shops, restaurants, etc.
Dan White discusses budget 2017 in his piece this week and the conflicting demands faced by Michael Noonan:
– The Fiscal Advisory Council (FAC) is advocating the reduction in the budget deficit and debt-to-GDP ratio instead of further expenditure. The FAC calculates that the Government has already committed to €2.4bn of spending increases for 2017 and the Council points to the July and August tax receipt figures to indicate that the best may be behind us on the revenue front.
– Meanwhile, IBEC director Fergal O’Brien has called for increased housing investment and Mario Draghi has urged EU governments to do more to support economic activity
Sunday Times
South Dublin County Council has given notice it will grant Pfizer planning permission for a new biopharmaceutical manufacturing plant on its Grange Castle campus in West Dublin. Pfizer will invest €500m-€750m in the site and the facility is expected to create 350 jobs.
AIB is considering the sale of part of a €1.9bn portfolio of buy-to-let mortgages that are in long-term arrears. Buy-to-let mortgages make up only 15% of AIB’s mortgage book of €33.7bn and they account for 35% of arrears greater than 90 days. The move, if it goes ahead, will test the appetite of the loan buyout funds for more Irish loans on the back of the Government’s move to curb aggressive tax planning. Brian Carey clarifies that the funds were doing nothing wrong in avoiding tax and merely used the Section 110 SPV legislation precisely for what it was intended, the securitisation of financial assets, and it was not a loophole that loan buyout funds exploited, they merely used existing legislation and notified the Revenue in doing so.
Carey covers the real agenda of the Eurozone finance ministers meeting in Bratislava: harmonise tax and limit the smaller states’ ability to undercut larger states on corporation tax.
Debenhams’ share price has been in recovery and is now touching Stg£65, following a pre-Christmas low of c.Stg£53. Cleaning firm Grosvenor is reported to have lost €900k in the examinership of Debenhams Retail Ireland.
Eir will have to pay a €3m earn-out to Michael O’Rourke and other shareholders of Setanta Sports following its takeover last year if certain targets are achieved. Eir paid €22m upfront when it acquired Setanta in December last year.
Cormac Lucey covers Ireland’s stretched relations with Europe following the Apple decision and political stance taken by the EU. Commissioner Margarethe Vestager admitted that the Apple ruling was to be seen in the context of a “far reaching strategy” including a “framework to ensure effective taxation where profits are generated and a strategy to relaunch the consolidated corporate tax base for which a fresh proposal is expected this year”. Vestager also remarked that other countries might benefit from taxes “meant to be collected by Ireland”, by saying that if Ireland doesn’t collect the tax allegedly owed, other countries can help themselves, Vesatager’s remarks are an open invitation to tax authorities across Europe and beyond to engage in a feeding frenzy at Apple’s expense according to Lucey.
Tom Morrisroe, a serial technology entrepreneur, has emerged as a backer of the Ronan Group’s Spencer Place Development Company, which has won the right to develop six acres of prime real estate in Dublin Docklands. Morrisroe has taken a 33% stake in the company and paid €43m for the development license after a tender by EY receiver Luke Charelton. Morrisroe, from Co. Roscommon, earned €74m when he sold his analytical software company the Now Factory to IBM in 2013.
Prime Active Capital (PAC), a once quoted Dublin investment group, is in talks to buy C7 Brands, a British consumer drinks group. C7 brands owns three brands of low alcohol wines: Light Lips, Bellasette and Vinello. It also has distribution rights for COCO5, a brand of coconut water backed by rugby international Jamie Heaslip. PAC will buy The UK company in an all-share deal that will involve C7 shareholders retaining 60% of the group post-transaction, the group will then be used as an acquisition platform to acquire further brands going forward. C7 brands is headed by Stephen Barton, a founder of Brand Phoenix, Britain’s third biggest selling wine brand. Prime Active Capital began life as printing company Oakhill but grew into an investment company under the management of former top Eircom executive Peter Lynch. Prime Active is now run by executive chairman Dermot Martin, who was a former senior executive at the print firm Adare.
The OECD has criticised the gender gap in Irish entrepreneurship. In a recent survey, 23% of female entrepreneurs said a lack of start-up capital was the biggest obstacle to them starting out.
Former Davy corporate financier Hugh McCutcheon is backing Group Eleven Resources, a start-up zinc mining company. The company has applied for 15 prospecting licenses covering about 525 square kilometres near Tralee in County Kerry. It also holds two licenses in Limerick.
Real World Retail, a cloud-based provider of data analytics for the retail and pharmacy sectors, has raised €920k from a group of angel investors and Enterprise Ireland. The new backers include Oonagh O’Hagan, owner of Meaghers Pharmacy, Weldricks (a chain of 61 Chemists in the UK) and Raimes Clark, one of Scotland’s largest independent pharmacy groups. RWE was founded by Conall Lavery and John Hogan in 2013.
ABP Food Group, the meat processor owned by beef baron Larry Goodman, has told EU competition watchdogs that its proposed investment in Slaney Foods is essential to secure the future of the Irish beef industry. Fane Valley co-op already owns 50% of Slaney and ABP is looking to buy the remaining 50%.The proposed investment is opposed by the Irish Farmers Association as it believes it will reduce competition in an already weak market. Niall Brady’s Business Focus reports on Larry Goodman’s ABP’s difficulties with farmers and the IFA.
Bank of Ireland is buying a book of home loans from Start Mortgages, stepping up a strategy that has seen it acquire a series of troubled mortgages that have been restructured by foreign investment funds.
Dublin Bus is now more likely to lose its “outer metropolitan” routes in areas such as Saggart, Blanchardstown, Leixlip, Maynooth and Balbriggan in a tendering process, because of the current spate of strikes and service stoppages. Privatisation of up to one in ten bus routes has been postponed in the face of union protests but are expected to be re-allocated next year. The Business Post reports that the privatisation plans look scuppered on the back of expected international players not being expected to tender effectively, leaving it a one-horse race.
Ecocem, an Irish maker of “green” cement, is building a €47m manufacturing plant at Dunkirk in France which will make it the biggest maker of low-carbon cement in Europe, boosting the company’s manufacturing capacity by 40%.
SIAC Construction has received a further €4m equity investment from Colas, a large French civil engineering group, and Thomas and Francis Jennings, Northern Ireland businessmen who rescued the business from examinership in 2014 when the consortium invested €10.5m.
Denis Mahony Holdings, one of Dublin’s largest car dealers, enjoyed an 86% rise in profits of €4.16m to last October which reflects the recovery in the car market.
Nick Webb’s inside track has the usual diversity this week:
– Denis O’Brien’s bid for €450m worth of mobile phone towers and wireless spectrum in Italy has been unsuccessful. O’Brien had teamed up with Swisscom’s Fastnet and Iliad, the French mobile carrier.
– AIB’s chief risk officer Dominic Clarke may be leaving to join a UK rival. This is the sixth departure from the role in 10 years.
– Carolyn McCall’s EasyJet is planning on moving its HQ to Dublin should Brexit become a regulatory headache post-Brexit.
Blaine Callard, head of Harvey Norman Ireland, has just led the business into the black for the first time in 13 years. Harvey Norman Ireland reported an operating profit of €500k for the quarter ending June 2016, a major milestone when it was previously losing €30m-€40m a year.
Sorcha Corcoran has a good article of the recruitment sector and how it has turned full circle; jobs are no longer the problem, rather filling them is. Recruiters are now looking globally to fill Irish jobs.
€325k – The cost of each additional hospital bed, according to a confidential submission drawn up by @roinnslainte. @IrishTimesBiz
€1bn – Amount of new debt the State is targeting to issue this Thursday, bringing this year’s total amount raised to €6.5bn. @IndoBusiness
3.5k – The number of houses constructed in the second quarter of 2016, an increase of 17% quarter-on-quarter. @IrishTimesBiz
€10.8bn – The value of Irish food and drink exported last year, 41% of which went to the UK, according to @Bordbia. @IndoBusiness
0.3% – The year-on-year decrease in UK retail spending for the month of August, according to @the_brc . @examinerbiz
€27.8bn – The current gap between pension savings and retirement income, up from €20.2bn in 2010, according to @AVIVAIRELAND. @IrishTimesBiz
€2.4bn – Total adjustment to the government’s planned budgetary spending for 2017, much higher than the initial €1bn estimate.@IrishTimesBiz
0.2% – The month-on-month decrease in the overall cost of living across the economy for the month of August, according to @CSOIreland.
2.9% – Predicted decline in British business investment in 2016, according to the Institute of Chartered Accountants in England and Wales.
9% – The year-on-year reduction in house sales recorded during Q1 2016 in the Property Price Register, according to @Sherry_Fitz.