Sunday Business Post
There is still plenty on Brexit and Trump across the board. A Red C poll has indicated that 77% of Irish people are worried that Brexit will have a negative effect on the Irish economy, up 5% from last October.
Eli Lily, a Cork-based pharmaceutical company, has reportedly delayed a €200m investment in its Kinsale operation until it becomes clear that such an investment will not be penalised under the Trump administration.
The average remuneration of the top 26 employees in banks, insurance companies and asset management firms was €1.9m in 2015, according to a report by the European Banking Authority.
“Nama’s failure to manage conflicts of interest relating to Frank Cushnahan, the man at the centre of the €1.6bn Project Eagle scandal, was a “failing of corporate governance” which “potentially compromise(d) the sales process””, according to a draft report prepared for the PAC. The Sunday Independent reports that Cushnahan claims to have approached the son of Northern Ireland’s first minister Peter Robinson for assistance in progressing visa applications for wealthy Chinese investors who were ready to spend at least £1bn on Nama’s Northern Ireland Assets.
Gregory O’Gorman, son of Marian O’Gorman of Kilkenny retail fame, has filed legal proceeding against his mother in relation to his shareholding and his employment role in the company. The group has a turnover of €25m from 11 stores nationwide. Marian split from her family in 1999, when they were all part of the Blarney Woollen Mills Group. Her brothers Pat, Frank and Kevin remained with the Blarney Woollen Mills Group.
There is also numerous pages on the Garda crisis.
Robert Nathans, business advisors and audit and tax services providers, celebrate the appointment of Derek Dervan as partner to their firm with an advert welcoming him.
Zoho Corporation, which provides a range of cloud software solutions, has chosen to locate its data centre operations in Ireland to “protect its customers against US Government snooping”.
There is an exclusive interview with trade union activist Brendan Ogle.
A recruitment platform for virtual workers called Abodoo is raising €2.5m ahead of an April 2017 launch.
Successful serial tech entrepreneur Steve Collins has joined Frontline Ventures as a venture partner to help with its €60m fund for B2B software companies.
John Mullins has closed his latest €7m equity funding round for his solar energy company Amarenco. Investors include Bill McCabe’s Oyster Capital Investments and Creganna founder Ian Quinn.
Suretank recorded revenues of €81m in 2015, a fraction lower than the €82m 2014 figure. Underlying profit is not clear from the article.
EI announced last week that it invested €32m in Irish start-ups in 2016 and supported 229 companies.
Cork-based and US-listed Ardmore Shipping saw net profits drop from $32m to $3.7m in 2016.
Since 1994, DCC has spent a staggering £2.1bn acquiring companies. Half of this has come in the last year, with its most recent announcement being the acquisition of a petrol station network in Norway from Esso. It now has over 1,000 stations across Europe. Its main focus is going to be downstream assets of oil operators such as these. Tommy Breen was named the FTSE chief executive who created the most value last year.
Arachas, one of Ireland’s largest commercial insurance brokers, has sold a majority stake in the company for more than €25m to Sovereign Capital, a UK private equity fund that specialises in buy-and-build opportunities. Arachas hired AIB Corporate Finance last year to advise it on its options. Deloitte Ireland’s M&A team, led by Anya Cummins, provided buyside advisory for Sovereign and raised the debt which was sourced from Five Arrows (Rothschild) out of London. Deloitte also provided tax advice, due diligence services and regulatory due diligence on the transaction.
The imminent return of Ivan Yates to Newstalk is also covered and speculation about how his Sunday morning show might fare.
Simon Harris writes in the Business Post about how he thinks he might be able to reduce hospital waiting lists.
Derry-based Niche Drinks is spending €14m developing a whiskey distillery and visitor centre.
There is a focus on outsourcing and the National Health Summit.
Róisín Burke hears that Bill Nowlan is looking to set up a social housing fund.
Danuta Grey has been appointed a non-executive director at Direct Line Insurance, in addition to her other non-exec roles in Paddy Power Betfair, Michael Page and the British Ministry of Defence.
Maurice Healy, founder of the Healy Group which has €100m plus in consolidated revenues, is interviewed in the Bus Post by Tom Lyons. His investment firm has four pillars:
– Food ingredients
– Chemicals
– Pharmaceutical ingredients
– Health/nutrition
He said they are like a small DCC. They also have a venture capital arm for higher risk. He recently received national philanthropist of the year by the Community Foundation of Ireland for his services to many charities over the years. He gives somewhere in the region of 20% of pre-tax profits to charity. He thinks charities need the governance that experienced business can bring as much as they need money. His four sons are all in the business.
There is a profile on Tony Smurfit.
He is on the record for saying that he is proud that he is the founder’s grandson but that he has had to work twice as hard as anybody to be successful in the company. His career in Smurfit has thrived under three private equity owners. Investors in Smurfit include Norwegian sovereign wealth fund, BNP Paribas, GND Capital, Schroders and Blackrock.
Sunday Independent
The Sunday Independent reports that Credit Suisse is laying the groundwork for expanding its operation in Dublin. Credit Suisse Fund Services (Ireland), a new Irish subsidiary, was registered late last year and the company has submitted several new documents to the CRO. According to the Sunday Independent, Credit Suisse is being tenaciously pursued by Ronan Group Real Estate to expand its Dublin presence so that it may offer the company a new premises at Spencer Dock capable of holding an increased number of employees.
BOP, a London-based consulting firm, has revealed in a new research report that the Irish economy benefits to the amount of €1.3bn annually from the live entertainment sector. The study also estimates that every €1 spent on a ticket generates an additional €6.06 for the wider economy. Over a 12 month period, 3.7m people attended live entertainment across Ireland, 280k of which came from overseas, generating an extra 3.1m bed nights. The sector is estimated to currently support 8.7k jobs.
UK accounting and payroll software firm Sage Group is considering the future of its Irish-based payments unit as part of a global review. The business is currently exploring a potential sale of its US payments unit and, according to Steve Hare, the company’s chief financial officer, the software giant could exit payments entirely by disposing of businesses in Ireland, the UK and South Africa. c.£40m of revenue is generated per annum from its Irish, UK and South African businesses.
TV3 has secured £3m in funding from Virgin Media group for a new “ambitious six-week contemporary series”. According to Pat Kiely, TV3 Group’s managing director, the group’s share of viewing was up 54% in January which is attributed to the return of Coronation Street and Emmerdale. Pat Kiely is also the feature of this week’s interview in the paper.
Paul Somerville has three interesting pieces this week:
– His first discusses how the tourism industry in Ireland has benefited from the rising dollar. US tourists are 25% better off in currency terms visiting Ireland today than they were in 2011. Somerville questions the dollar’s ability to keep rising and warns against the consensus that the strong dollar is here to stay.
– This week’s Investors Intelligence Advisors’ survey showed that 70% of respondents were bullish on the US market, the highest level in 30 years. Sommerville advocates that investors should be reducing their exposure to the US market as every sentiment indicator is flashing red.
– His final piece discusses another “embarrassing climbdown” for the Bank of England as it made a further upgrade to its economic forecast for the UK. After the referendum, the BoE had cut GDP growth forecasts to 0.8% but has now revised it to 2%.
“Planned laws to prevent solvent firms from winding-up defined-benefit schemes without the consent of the Pension Authority would introduce a “substantial obstacle to employers” looking to restructure or wind-up their DB schemes, according to Mercer Ireland.”
Brian Moran, the managing director of US real estate giant Hines’ Irish business, has described suggestions that government departments should relocate their operations from Dublin city centre to avail of less expensive office space elsewhere as a “false economy”. He argues that if they move, they may be too far from lawyers or consultants they have to engage with to be productive.
A new programme, Ingenuity, has been launched by Ireland Smart Ageing Exchange and aims to help business owners who are over 50 to scale their business. Currently, 25% of those who are self-employed in SMEs, which account for 99.7% of all Irish business, are in the 50-64 age group.
A new survey by Roland Berger, a Munich-based consulting firm, has revealed that 50% of fintech companies in mainland Europe are eager to expand their presence and Ireland and the UK were joint first place for the most popular country for a targeted expansion.
Simone Rocha, an Irish fashion designer, has opened her second stand-alone shop in New York. According to Rocha, her business has grown by 20% annually in recent years. Latest accounts for SR Studio show that the company made net profits of c.€630k in the 12 months to February 2016.
Reinshaw, a Bristol-based precision engineering firm, has emerged as a supplier of high-tech laser altimeters used by drones and is also supplying similar laser scanning equipment for use in self-driving cars. David McMurty is reported to own a 36% or €910m stake in the company. Reinshaw is expecting sales for this financial year to hit between €588m and €624m with a profit between €100m and €124m.
A new report by Savills reveals that transport, storage and manufacturing accounted for c.33% of new jobs created in Ireland in the past year. 19.5k jobs were created in this sector out of a total jobs growth of 57.5k between September 2015 and September 2016.
Voxpro, a Cork-based outsourcing company owned by husband and wife Dana and Linda Kiely, saw its turnover grow c.74% last year to €33m. Additionally, the company’s EBITDA rose by 168% to €3m, giving it an EBITDA margin of close to 10%. Last year, the company added Louise Phelan, Paypal’s vice-president of Global Operations for EMEA, and Aidan O’Shea, Voxpro’s managing director, as directors of the group. The Sunday Times reports that Voxpro is looking to raise at least €30m to fund its international expansion.
Ford is reported to be investing $1bn over 5 years in Argo AI, a Pittsburgh-based artificial intelligence company that was founded last winter by Bryan Salesky and Peter Rander. Argo has promised to deliver Ford a virtual driver system by 2021.
The winners of the 2017 Irish Tourism Awards are featured in this week’s paper.
Mark Evans writes this week on:
– The potential loss of Ryanair’s second bag perk due to customer “abuse”, as jet turnaround times and the bottom line are hit.
– Apprentice star Claude Litter and Costa Express founder Scott Martin’s complaints on social media about receiving poor customer service from British Airways; and
– The IAA boss’s warning about a new air service agreement that will have to be put in place between the UK and the EU post-Brexit.
Dearbhail McDonald writes on the dispute between the IDA and ConnectIreland over how many jobs were created under the Succeed in Ireland programme, which offers €3k to anyone with connections to Ireland who introduce potential foreign investors to Ireland. The dispute revolves around the IDA’s verification process which only pays the financial rewards when the jobs are “actually on the ground”. This has led to hundreds of connectors claiming they are owed money for jobs they helped create but haven’t been verified.
This week’s focus piece is on the live entertainments industry.
Tom McGuire, a tax partner at Deloitte, has a column in this week’s paper that discusses the current tax environment. He recommends that Ireland should consider lowering its corporation tax in response to the US and UK’s proposed reductions. The article is well written and worth reading in full.
Sunday Times
AIB will have to get regulatory approval from the ECB in Frankfurt if it plans to pay a dividend to the government pre-IPO. It is understood the ECB is still to be convinced that the bank has made sufficient progress in bringing down its non-performing loans. AIB has reduced its non-performing loans from €29.4bn in 2013 to €10bn at the end of the third quarter in 2016.
Brian Carey’s agenda piece this week:
– On the back of the closure of HP’s cartridge manufacturing facility at Leixlip and the loss of 500 jobs, Carey believes there are legitimate concerns around the sustainability of Foreign Direct Investment (FDI) in Ireland, particularly as it is directly linked to the corporation tax regime. With the European Commission focusing very closely as to where multinational profits should be taxed and the US president Donald Trump promising tempting tax packages to bring multinational employers back to America, this will likely weaken Ireland’s attractiveness as an FDI destination without undermining it. Similarly, in the Sunday Independent, Ben Hurley, the CEO of the National Digital Research Centre, says Ireland needs to wean itself off an over-reliance on FDI as a source of job creation and argues for a renewed focus on Irish innovation and acceleration of Irish start-ups.
– Carey also reports on Ryanair’s Michael O’Leary’s displeasure at the ease of the effective takeover of Air Berlin by Lufthansa. Two of the German flag carrier’s subsidiaries, Eurowings and Air Austria, will “wet lease” 38 aircraft from the struggling low-cost carrier. It has also installed its chief executive in Air Berlin, which will result in Lufthansa taking control of 98% of the domestic German travel market.
– Nicky Hartery is nearing the end of his second term as chairman of CRH. It is not clear if Hartery will go forward for a third term; there should be no shortage of candidates for the €575k a year role.
Balderton Capital, a London-based venture capital funder, has sold a 10% stake in Openet, Ireland’s largest home-grown software group, to Cipio Partners, a German investment group, as part of a shareholder restructure. Sources said Openet was valued at almost €120m, which is a discount to its true value because the transaction involved selling a minority stake with limited voting rights.
Cormac Lucey has a good piece on the factors that are driving our ongoing economic measurement problems and which have been inflating our key economic measurements such as GDP. Lucey concludes that the roots of the distortion lie in our success in bringing multinationals to Ireland. The multinationals’ profits are included in Irish GDP, even though those profits belong to entities and people outside of Ireland.
Four private consortiums are making overtures to AIB to acquire its impaired residential loan books ahead of its planned IPO. The consortiums are proposing to acquire the loans and rent the properties back to the homeowners under a mortgage-to-rent scheme. The consortia includes Arizun, which has €750m to invest; Home for Life, led by Merrion Capital, which has €150m; New Beginning, which has an initial €50m from a German family office; and iCare, led by David Hall.
Finance minister Michael Noonan briefed some of the world’s top tech executives about Irish and European tax policy on a trip to the US in November in an effort to reduce concerns following the Apple ruling.
Mothercare Ireland, the local franchise for the UK retailer, posted a profit of €1.1m in the year to March last year after experiencing the benefits from a High Court Examinership in July 2015.
The Central Bank has faced criticism from Liz Quinn, chairman of the Gibraltar Insurance Association, after raising concerns about the vetting of motor insurance companies that use Gibraltar as a base throughout Europe, Interestingly, the Sunday Independent’s Dearbhail McDonald discusses how motorists can’t rely on banking supervision for regulation of the insurance industry. She points out the collapse of Enterprise Insurance last year and Setanta in 2014 which affected a combined 89k Irish customers between them. She goes on to say that banking supervision should be uniform and absolute, but for sectors such as insurance it can be multiple track, with the public paying the price when the insurers go off the rails. Not an ideal state of affairs.
Tetra Ireland, the Eir-backed provider of communications to Gardaí and the emergency services, plans to pay a €9.6m dividend. Tetra recorded revenues of €34.1m and made a pre-tax profit of €8.5m, according to its most recently filed accounts.
Derek O’Leary, a Dublin property developer who went bankrupt in England in 2013, is suing his former partners in an upmarket London property scheme for almost €10m. The shareholders in the venture include businessman Tom Coyle; Anthony Carey, of accountants Cooney Carey; and First Equity Group, a property investment firm headed by Tom Dowling.
Whiskey Capital Distillers, based in West Cork, has raised more than €3.4m through the employment and investment incentive (EII) scheme.
BHSL, a Limerick-based agri-tech business, has raised €4m to support its global expansion. The company is set to raise a further €3m this year as it looks to sell its new system to convert poultry manure into fuel. Denis Brosnan, the former chief executive of Kerry Group, was appointed chairman last year. Martin Higgins in Focus Consulting led the fundraising.
CMS Distribution, a Co. Mayo products distribution company, has acquired TNS Connect, a specialist tech distributor, from Cork entrepreneur Liam Casey. The consideration was not disclosed.
Barry Downes, the founder of Waterford software company FeedHenry, which was bought for €63.5m in 2014, is heading up a new €20m venture capital fund. The Suir Valley Venture Fund plans to invest in Irish software firms, with a focus on financial technology, augmented and virtual reality and the internet of things. The fund is backed by EI and Shard Capital Partners, a London investment firm.
Kerry entrepreneur Xavier McAuliffe, founder of the Spectra photo labs and one-time owner of the Lyrath hotel in Kilkenny, has been bought out of Dingle Oceanworld, writes Brian Carey. The consideration was not disclosed.
The Irish Aviation Authority (IAA) has signed a new deal with Iran which will now allow Irish-based aviation lessors to work with Iranian airlines.
Apple’s plans for a 500-acre data centre in Galway have cleared one legal hurdle after the Court of Appeal dismissed a request by Brian McDonagh for a judicial review of An Bord Pleanala’s decision to allow the €850m investment.
JJ Rhatigan, one of Ireland’s biggest builders, has formed a new joint venture with one of Spain’s largest construction companies, Obrascon Huarte Lain. It is understood the two companies have agreed a deal to work on healthcare projects and public-private projects in Ireland.
Nick Webb’s inside track this week:
– Cathal McGloin, one of the founders of FeedHenry, has founded a new software business ServisBot. The company will help customers engage better with companies through the use of a smart virtual assistant.
– Eoghan O’Sullivan’s Von Bismark, the company which developed an e-commerce platform for Microsoft’s Xbox gaming system, has raised new money from Ivan Ezekiel and Serone Capital.
– Leading lawyer, Margaret Clandillon, has just joined the board of Denis O’Brien’s Actavo.
– Damien O’Donohoe’s sport management group Ikon Talent has bought out minority stakeholders Caroline Downey, of MCD, and Simon Moran, a British-based music promoter.
– Lioncourt’s Michael Tunney has bought three properties on George’s Street in Dun Laoghaire for c.€1m.
– Hyperscience, an artificial intelligence (AI) company backed by Handy co-founder Oisin Hanrahan, has raised another €17m in series A funding.
Philip Connolly’s business focus piece reports on INM’s efforts to acquire Celtic Media.
Niall Brady has an interview with Fergal McGrath, boss of financial services company Dilosk.
Sandra O’Connell has an excellent piece on franchising this week.
€5.25bn – The amount raised by @NTMA_IE through debt issuance so far this year. @IrishTimesBiz
$1tn – The value of US junk bonds that are due to mature in the next 5 years, according to rating agency @MoodysInvSvc. @IrishTimesBiz
14% – Rise in residential development lands value last year; this year’s rise is projected at 15%, according to a survey by @SCSISurveyors.
15% – The proportion of Global GDP that is accounted for by the EU economy, according to @PwCIreland. @IndoBusiness
13.5% – The commercial property vacancy rate for Q4 of 2016, a year-on-year increase of 0.9%, according to @GeoDirectory_ie. @IndoBusiness
€33 – The average price paid for a @Ryanair flight in Q4 of 2016, a decrease of 17% versus the same period in the prior year. @IrishTimesBiz
5% – @DavyGroup’s projected growth in Irish GDP for 2017, a significant increase from their previous forecast of 3.7%. @IrishTimesBiz
8% – @hwbcIreland ‘s predicted rise in prime office rents for 2017. @IrishTimesBiz
184% – The expected increase in office completions for 2017, according to @hwbcIreland. @IrishTimesBiz