Sunday Business Post
The number of completed houses remains an uncertain statistic. The government continue to quote the number of completions at 14,932 last year, but this is based on electricity connections. When the number registered on the Building Control Management System are added to the number of one-off houses, the estimated number of completions last year on this basis was barely over half the 14,932 quoted government figure.
“The future of the Gay and Lesbian Equality Network (GLEN), a high-profile advocacy group, is shrouded in doubt this weekend as the charity faces an investigation into serious financial irregularities.”
Pharmaceutical giant Shires is reviewing some of the elements of the development of its new plant currently under construction in Dunboyne, Co. Meath. The firm claims any review is unrelated to Brexit/Trump. Separately, it is understood Eli Lily has delayed a €200m investment in Cork as uncertainty remains over how Trump will treat pharma companies operating out of Ireland.
Bus Éireann management is considering putting the company into examinership if the staff vote against the most recent Labour Court recommendations.
Craft brewer Brú is looking to expand its number of pubs from its current three in Fairview, Navan and Newbridge.
Tullow Oil’s shares have fallen from a high of £15.70 in February 2012 to £2.30 as it is under pressure from a lot of short traders who are betting against the stock, including Crispin Odey.
American hedge fund Canyon Capital is the biggest outside investor in Ardagh, holding 10.5%. Shares have risen from $19 at flotation to $21 last week.
Liam Hanly, current group finance, IT and logistics director of Eason, is set to take over from Conor Whelan as MD. The plan for the next three years will involve “significant but necessary cost savings”. Chairman James Osborne paid tribute to Conor Whelan, saying he brought “huge energy” and successfully grew the “brand, market share and retail footprint across the island of Ireland”. Osborne said he would have liked Whelan to stay but wished him well with his move.
Padraig Ó’Céidigh is interviewed in the Business Post. On his future political ambitions, the senator says, “I might run for the Áras, I’ve no interest in running for the Dáil”.
Both the Irish Times and Independent News and Media have engaged in the sales process for the Examiner group of newspapers and media assets being run by KPMG. The Examiner group had debts of €21.1m at the end of 2014 and did not appear to be profitable.
Joe Morgan and the late Frank O’Kane started Mercury Engineering in 1972, majoring on the installation of sprinklers and an article in the Business Post chronicles how their moves into Libya and Saudi Arabia were inspired. However, not all of their international endeavours were successful and they now pick and choose their international work based on the client involved. The company’s finances are not public but according to Tom Lyons and Ian Kehoe’s article, it is understood that it turns over c. €400m. IBI is currently managing the sales process. The estimated value of the company is €80-100m and management are said to be hungry to take over the reins and are said to be in discussions with private equity.
Irish project management firm PM Group has won “a contract to provide master planning and design engineering services for a $330m high-tech biologics manufacturing facility with BeiGene, the Chinese company quoted on the New York Stock Exchange”.
The British-based Business Growth Fund has taken a 14.7% stake in Dublin-based Escher Group, “a Smurfit family backed postal software company with a market value of €27 million”. The group recorded revenue of $22.4m and profit of $2.7m before tax.
There is an article on Aramark and it mentions Avoca’s current scoping of sites in the UK and the prospect of entering the American market. Frank Gleeson is quoted as saying that there is no one store in the US that can do what Avoca does and compares it to a cross between Eataly, Whole Foods and Anthropologie, which are three top brands, and there could be a gap for Avoca to take on the US.
Topaz will spend €6m rebranding the name of all of its service stations to Miles, with 50 of the stations being rebranded this weekend. The new name is part of its ongoing integration with Couche-Tard.
Kildare software company AQ Metrics is intending to open offices in Asia having opened in Britain and the US recently. It has designed automated risk monitoring and regulatory reporting technology for the investment industry. It took €3m in funding last year and has no funding requirements at the moment according to CEO Geraldine Gibson.
E-commerce company ChannelSight is also in growth mode with its headcount growing from 32 in 2015 to 65 now.
Ian Guider and Michael Murray have a two-page special on CEO pay and highlights the packages of some of Ireland’s plc CEOs.
There is a two-page interview with senator Rónán Mullen.
There is a special on Waterford including an interview with Seamus Walsh, the owner of Waterford Castle.
Eamonn Fingleton has an interesting article about how the British may be heading out of the EU but by virtue of the debt they owe to foreign countries and the foreign ownership of their corporate giants, they are far from their own state. Examples cited include Cadbury, Hovis, Scottish and Newcastle, HP, Financial Times, Fortnum & Mason, Harrods, Boots and the list goes on.
Colette Sexton writes about Communicorp’s senior executive shake up during the week.
Michael Murray writes about how the current government has shown very little real support for private investment, titled “the Perils of Populism”. He says, “when did you last hear a politician from either of our two main political parties make an intervention in the Dáil or in the media in support of private equity investors?” He cites the punitive CGT regime and many other examples that suggest there is not full support from the current regime for private investment.
DC Cahalane, head of the new and innovative co-working hub Republic of Work in South Mall in Cork, is interviewed in the Markets section. The Republic of Work, supported by Bank of Ireland, is a great initiative and Cahalane is steeped in start-up experience from his time in Teamwork and many other start-ups.
Róisín Burke cites real examples of Asian students who have come to Ireland as visas become harder to get in the US.
Burke also writes that the Collison brothers ruled out an IPO for Stripe during the week.
Sunday Independent
The Sunday Independent publishes a list of the top-10 highest paid CEOs on the ISEQ. CRH’s Albert Manifold tops the list with a total package of €11.57m last year. Combined, the top-10 received €52.22m last year.
Despite new owners coming in and rent reviews being in progress, the country’s two largest shopping centres, Dundrum and Blanchardstown, had just five commercial lease arbitrations since their change of ownership. This is out of 400+ tenants between them.
The government is to look into the effects of Ireland’s personal tax regime on the environment for growing SMEs and start-ups and also the impact of the differences in tax regimes between Ireland and the UK in attracting top talent.
Richard Curran’s piece:
– The government’s plan to only impose water charges on those using 1.7x the average usage will result in an estimated €250m annual hole in Irish Water’s finances, which will need to be met by the exchequer – effectively meaning that Irish Water will be a state-backed entity rather than a commercial entity as originally envisioned.
– Some production companies are assessing the locations of their factories in light of Brexit. Glen Dimplex is moving some of its operations in its Portadown facility to south of the border, while Dunbia is considering moving some of its Northern Irish production across the water to Britain, citing fears of potential delays in getting product through the ports in England.
The ISEQ hit a 2017 high on Monday, largely driven by strong performance from Kerry Group, Kingspan and Ryanair stocks.
An internal Central Bank scenario analysis report has cast uncertainty on whether Irish banks would have the appetite to meet loan demand if output in the residential property market was to increase from its current levels. The report also finds that still almost 60% of house sales are to cash buyers.
In a bid to reverse the decision to close Harold’s Cross greyhound stadium, a report commissioned by the representative bodies of greyhound owners and breeders estimates that almost €10m in profits could be generated over three years by the Irish Greyhound Board (IGB) by implementing some new technology initiatives. The IGB planned to close and sell Harold’s Cross stadium to raise cash to repay debt it owes to AIB, largely in relation to the construction of a new track in Limerick.
Evros, an IT managed services company run by MD, Brian Larkin, has acquired rival Comsys. Comsys majors in Dell EMC technology and adds to Evros capabilities in that area. Evros has c. 350 staff and revenues of €52m last year.
A planned €90m extension to Ardmore Studio in Co. Wicklow has been knocked back for the moment by Wicklow County Council, as it seeks additional information on the extension. The proposed development would see the construction of four new movie studios, a TV studio, offices, support space and a visitor centre. Once complete, it is estimated that the facility could create up to 1,500 jobs.
CocoFuzion, a naturally flavoured organic coconut water drink, is to launch in over 1,000 stores across Ireland this month. The new health drink is backed by Prime Active Capital, an investment business which counts sports starts Jamie Heaslip, Ian McGeechan and Shaun Wright-Phillips among its shareholders.
Keogh’s Crisps generated reported after-tax profits of €381k in 2015, taking accumulated profits to over €1m and had a cash balance of €736k. The Dublin-based crisp maker has 85% of its sales in Ireland and exports 15% to c. 14 countries, including UAE, China, Germany, the UK and the US. 2016 profits are expected to be a bit lower due to an investment programme which saw the company expand its production capacity.
To cater for an increase in student numbers, NUI Maynooth is planning a 7-10 year €300m re-development programme of its campus. To date, c. €157m has been raised and the government is expected to contribute c. €140m in total. Maynooth expects to grow from 11k students to 16k by 2025.
Irish cheddar sales are expected to be badly hit by Brexit, with 60% of exports going to the UK.
Property business Jones Lang LaSalle’s head of research, Hannah Dwyer, expects to see a number of London-based businesses taking office space in Dublin over the next three months. Office vacancy in Dublin is at 8.9% and 4.5% in the city centre.
Simon Betty, Hammerson’s (co-owner of Dundrum Shopping Centre) director of retail in Ireland, has a piece in today’s paper looking at the retail landscape In Ireland. Betty predicts that “successful retail destinations will be those that can adapt to shifting customer trends and deliver customer experiences that simply cannot be matched online”.
The government raised its GDP targets last week to 4.3% for 2017 and 3.7% for 2018. This rise in growth projections is in spite of lower than expected government tax revenues, with first quarter tax revenues 2.4% lower than projected at the time of the budget. March was 7.6% behind budget targets.
This week, Ronald Quinlan interviews Paul Keogh, former chief operating office at Sean Mulryan’s Ballymore. Keogh was in the trenches with Mulryan for the past 10 years and helped the business work its way out of NAMA. The Business Post also covers Keogh’s move to set up an office to advise family businesses on governance, succession, etc.
Sean Gallagher interviews Sue Dempsey and Fiona Craul of Sweetspot Sourcing, a product sourcing and manufacturing business.
Samantha McCaughren’s Ergo piece:
– Pat Landy has re-joined the board of Zamano, the mobile payments and marketing business, only six months after stepping down. With its main business of payments and marketing via text message being curtailed by government regulation, Zamano is looking at what to do next.
– Nasdaq-listed and Athlone-headquartered pharma-company Innocoll has agreed to sell its business to US fund Gurnet Point for a maximum of $209m. The deal will take Innocoll private and provide it with the funding necessary to finish the development of a new post-operation pain relief treatment.
– Former Merrion Pharmaceuticals boss John Fox has joined the board of Neuropath Therapeutics, a start-up with the aim of developing treatments for disorders of the central nervous system. The company counts philanthropist Chuck Feeney as an investor.
Sunday Times
Proxy firm ISS is recommending that shareholders in Kingspan, the building materials company, refuse to sanction its performance share plan, dragging the group into a shareholder revolt. The global shareholder adviser has urged the shareholders to vote against a proposed resolution to put in place a 10-year incentive scheme that would include c. 300 staff members. It has cited performance target levels at which bonuses will be paid, rather than proposed salary increases, as being the major issue.
Richard Curran in the Sunday Independent notes the discontent in some corners with the levels of pay of top company execs. While there may be rumblings of regulation to rein in exec pay, there has been little action taken.
Brian Carey’s agenda piece this week:
– Carey points out that the “world has moved on” when it comes to senior banking executives’ pay, and that Michael Noonan’s stance on pay and bonuses will be at odds with that of future investors in our banks who will want to secure and retain top talent.
– Carey thinks NAMA is shaping up to be the new Irish Water, its relentless pursuit now the favoured bloodsport of opposition politicians. There is now a groundswell of opinion that the public inquiry into NAMA should also include Project Tolka, which relates to property assets held by debtors Paddy Kelly, John Flynn and Alanis, an investment vehicle headed by the McCormick family.
It is understood that the Irish Strategic Investment Fund made more than €15m, equating to a 9x return, on its investment in Neuravi, the Galway-based medtech company sold to Johnson & Johnson last week. Neuravi is developing treatments for acute ischaemic stroke. Philip Connolly has an excellent piece on the Neuravi deal and the West of Ireland’s position on the global map as a centre for healthcare devices later in the paper.
IBRC has recovered €23.4m in respect of outstanding debts over Russian and Ukrainian real estate assets seized by the state from Sean Quinn. There hasn’t been a lot of interest in Quinn’s Russian and Ukrainian portfolio and it is believed the value of the remaining assets have fallen.
Cormac Lucey thinks there is evidence of adverse economic headwinds that may cause our economy to wobble. He cites the possibility of a botched or hard Brexit, Trump forcing US multinationals to repatriate, income tax receipts and corporation tax coming in below budget and global interest rates rising.
AIB has revealed that more than half of the 13.5k employees on the payroll in 2012 have left the bank. Headcount has fallen by 3k to 10.4k since 2012; this was made up of 7.4k departures and 4.4k recruits.
Petmania, a pet superstore that exited examinership six years ago, posted a profit of €300k last year.
Up to 70k business owners are at risk from higher charges and reduced investment choice under plans by social welfare minister Leo Varadkar to clamp down on single-member pension schemes, according to the Association of Pension Trustees of Ireland.
The Leeds Building Society is reviewing its future in Ireland, including whether to set up a locally registered and regulated subsidiary following Brexit.
Activate Investments, a state-backed lender to the residential development sector, has advanced €41m to McGarrell Reilly, the house-building company headed by Sean Reilly. Activate also recently agreed to fund Bartra, a property vehicle owned by former Treasury Holdings boss Richard Barrett.
Irishman Brian Hickey, the former Just Eat regional director, has been hired to drive the expansion of Blow, an on-demand beauty app in London which sends stylists to people’s homes. Blow has raised £11m to date and investors include tennis player Andy Murray.
An Bord Pleanála is setting up a new division and hiring extra staff to deal with its new role in processing fast track house building applications. Under new rules proposed by minister Simon Coveney, from next month developers will be able to go straight to An Bord Pleanála to seek approvals for plans of more than 100 units.
Finance minister Michael Noonan asked NAMA to accelerate its asset disposals to help the government sell its bank shares just as the agency put its infamous Project Eagle portfolio up for sale, according to a recently released memo under the Freedom of Information Act. Noonan told the Dail’s Public Accounts Committee investigation into Project Eagle that there was “no political pressure” on NAMA to speed up the sale of Project Eagle. Pearse Doherty, Sinn Fein’s finance spokesman, said the memo raises questions for Noonan.
Michael Smurfit has provided £2m funding to GameAccount Network, the gaming software company headed by Dermot Smurfit, his nephew. The company said it was raising fresh capital to ensure it had “suitable financial resources to respond to the opportunities the board believes will be available to the company in newly regulated intra-state internet gaming markets in the United Sates, currently specifically in Pennsylvania”.
Dermot Desmond has launched the latest phase of his plans to turn the Caribbean island of Canouan into a playground for the rich with the opening of a super-yacht marina. Desmond has reportedly spent $60m to date on the project.
Irish drug group Sigmoid Pharma received a €4m investment from Dr Falk Pharma as part of its new partnership with the German family-owned firm. Under the deal, Dr Falk will assist the company in commercialising its lead pipeline of products.
Irish savers with money on deposit earned just 0.13% interest on average in February, while returns across the Eurozone averaged 0.43%, according to the Central Bank of Ireland.
Reported after-tax profits at Irish Yogurts, the O’Sullivan family-owned business, were up more than half a million euro to €856k last year. The growth in profit was attributed to falling dairy prices and additional plant capacity.
Nexvet Biospharma, the Tullamore-headquartered company led by former Ospona executive Mark Heffernan, has been bought by US firm Zoetis for $85m.
Nick Webb’s Inside Track this week:
– Eddie Hobbs has secured investment from euromillions lottery winner Dolores McNamara for his new delivery company, Treatdrop. It’s an Uberlike on-demand delivery service for the SME sector, with a tiered monthly subscription or one-off fee structure.
– Former CRH chief executive Myles Lee has joined the board of FTSE-listed Babcock International which is helping to design and build the Queen Elizabeth Class aircraft carrier for the Royal Navy, as well as securing a €415m contract to deliver a destroyer fleet.
– Seamus Walsh, who built a successful property business in Australia, has bought the Ard Ri in Waterford which he plans to turn into a hotel. Walsh also owns Waterford Castle which he bought in 2015. Walsh also features in an interview in the Business Post this week.
– Pat Hickey, the former head of the Irish Olympic Council, has stepped down as a director of his insurance and auctioneering businesses.
The Sunday Times rich lists are published this week.
This week’s chief executive interview is with Marc Murphy, the chief executive of Fenergo, the fast growing financial software business.
Niall Brady believes that Bank of Ireland will recruit Richie Boucher’s replacement from within, but will break the salary cap to do so.
Sandra O’Connell has a good piece on some of Ireland’s start-up entrepreneurs with disabilities, an inspiring read.
Harry Parkinson, chief executive and co-founder of Capitalflow, is featured in this week’s How I Made It piece.
Other M&A News
One51, a rigid plastics manufacturer for the packaging, environmental containers and industrial products sectors, announced last week that it has completed the disposal of its ClearCircle environmental business for a total consideration of €29.75m. The deal was an MBO; the MBO team were advised by BDO’s Katharine Byrne and Richard Duffy.
Another deal announced during the week was the investment in Zenith Technologies, a global company specializing in full life cycle automation, manufacturing and operational support solutions for the life science industry, by GE Healthcare Life Sciences. Cork solicitors McCullogh Wall acted for Zenith, while GE were represented by Gibson Dunn in London and McCanns in Ireland.
3.38% – The weighted average interest rate on new mortgages, higher than the equivalent euro-area rate of 1.8%. @IrishTimesBiz
€5.1bn – Value of new mortgage lending in the year to February, a year-on-year increase of 16%, according to @centralbank_ie. @IrishTimesBiz
0.7% – The rise in inflation in the year to March, according to the latest @CSOIreland figures. @IrishTimesBiz
0.2% – The rise in UK inflation-adjusted pay for the 3 months to February, the weakest increase since mid-2014, according to the @ONS.
5.5% – Projected Irish unemployment rate that will be reached in 2019, down from last month’s rate of 6.4%, according to @IRLDeptFinance.
€50.6bn – The projected tax take by the Government this year, according to @IRLDeptFinance. @IndoBusiness
5.8m – The number of passengers that flew through Dublin Airport in the first quarter of 2017, a year-on-year increase of 5%. @IrishTimesBiz
4.2% – Year-on-year decline in overall spending for the month of March, according to @VisaIreland’s consumer spending index. @IndoBusiness
9.3% – The year-on-year decline in passenger numbers at Dublin Port, according to data released by @DublinPortCo. @IndoBusiness
0.7% – Fall in the price of an average weekly grocery shop in the 12 weeks to the end of March, according to @K_Worldpanel. @IrishTimesBiz
4.3% – The @IRLDeptFinance forecast for GDP growth in 2017, up from its previous forecast of 3.5%. @IrishTimesBiz
c. €17bn – The estimated value of the construction industry to Ireland this year, according to @wearelinesight. @IrishTimesBiz
c. 12.5k – Number of new companies formed in the first 3 months of the year, a year-on-year increase of 10.3%, according to @VisionNetLtd.