Sunday Business Post
57% of all voters and 48% of FG voters want Enda Kenny gone before the October budget.
Fianna Fáil are topping the Red C polls at 29% (+3%)
Fine Gael 26% (-)
Sinn Féin 13% (-2%)
Inds/others 26% (+1%)
Labour 6%
Fianna Fáil leader Micheál Martin is interviewed in the Business Post.
Activist investor Adam Patinkin has bought just over half a million euro worth of shares in Dermot Smurfit’s GAN.
The CSO published the current population figure as 4.76m based on the most recent census. This illustrates a 170k increase in population since 2011, yet the housing stock only increased by 19k according to this, which is hard to reconcile to the house completions data since 2011.
Bartra is said to have bowed out of the bidding for part of the New Generation Property portfolio put up for sale. US fund Centerbridge and Broadhaven are said to be running the rule over the portfolio.
The Department of Finance is considering bringing in some legislation to govern crowdfunding. Crowdfunding is an excellent tool, but without regulation, some sorry stories are likely to emerge. However, with too much regulation it will cripple the nimble nature of it. Hopefully they get the balance right and leave this as a viable option for anyone looking to raise equity.
Rothschilds are said to be running a process to sell “Gaelectric’s cross-border windfarm portfolio”. While there were 20 expressions of interests, the goalposts are said to have moved post-Brexit given its exposure to Northern Ireland. It may sell all or part of its 23 strong wind farm portfolio according to the Business Post. It is “reported to be intending to use the proceeds of the windfarm sale to invest in other renewable energy assets and projects, including energy storage, solar and bioenergy as well as energy trading.”
Racing Post looks set for sale to Exponent subject to Competition Authority approval. FL Partners and CEO Alan Byrne have navigated the company successfully through the structural challenges faced by all print reliant newspapers and diversified the business into a multimedia business, achieving particular success with its mobile offering and now appear to be cashing in on that success.
Hammerson, who bought loans associated with Joe O’Reilly, are appointing KPMG as receivers to gain ownership of the 50% stake in the Ilac centre and the Pavilions shopping centre in Swords.
Image Publications looks set to lose the contract to publish Cara, Aer Lingus’ in-flight magazine. It will still be busy with their many other publications and websites.
Martin Flattery is taking NAMA to court trying to stop them openly marketing a Straffan site which he and Arthur French bought in boom times. Flattery has fallen out with French and is claiming that he has not been given a fair chance to buy the loans off NAMA. He claims that French told him he would not be given a chance to develop the site and that he had “seen to this”.
BOI’s share price is 44% down this year, almost double the European sector average decline. Analysts cite the growing DB pension deficit on the back of falling bond yields and weak sterling as a big part of the reason, coupled with its exposure to the general British economy.
Abbey plc is a unique animal in that it is an understated family residential development firm with stock market listing; c.25% of shares are in free float. Its CEO Charles Gallagher is interviewed in the Business Post. He sees a strong, steady market for homes in Dublin and North Wicklow but is yet to see a reason to build anything too fast on his holdings in Kildare or Laois. He believes the Central Bank regulations have slowed things down and the help-to-buy scheme has spurred on the UK market where it is very active. This is reflected in its number of house sales last year: the builder sold 23 houses in Ireland last year and 544 in the UK.
There is a two-page review of Brexit fatigue and reflection on the appointment of Theresa May. Tom McGurk leads with the line, “the fact is that the EU, not us, will handle the Brexit negotiations between Britain and Ireland.”
Charlie McCreevy has made an exception to his rule of not giving interviews since his retirement. He has been appointed chairman of an insurance firm in Naas and agreed to do an interview with Hugh O’Connell. He believes his reducing of taxes spurned on the economy when he was Minister for Finance and before he was sent to Europe he was calling for tightening the purse strings which Bertie did not do in advance of the 2007 election. He does not in any way take any responsibility for the post-Celtic Tiger pain.
DCC profits were significantly up for the first quarter of the year, buoyed by the performance of its energy division.
Sportdec, backed by Neil O’Leary, is raising €2.4m Series A funding, having raised €3m in seed funding. The business morphed out of BeanBag Sports, founded by Stephen Byrne, and it hired ex-head of social games and development at Sky Betting, Bruce Bale, last year. It will be majoring on providing sports content to sports fans.
TV3 CEO Pat Kiely is interviewed in the Business Post.
There are special features on Marine Industry and Managed Mobility and Network Services.
There is a regional focus on the midlands.
Christian Stokes, who formerly ran the Residence and other hospitality assets with his brother Simon, has been appointed European sales director for Surf Air, a Californian private plane service.
Clem Garvey has moved on from head of Europe for French company Neopost to join Escher Group, the postal technology firm where the Smurfits are investors.
GC Aesthetics, the Dublin breast implant company backed by Bill McCabe’s Oyster Technologies, has completed a $20m new funding round, bringing its total funding raised to date to $110m. Oyster Capital have a 23% stake in the business, while Barry’s Tea Holdings has a 6% stake in the business. It had $53M revenues and made a loss of $15.1m in 2014.
Dublin City Council has lodged court proceedings against LM Developments, a boom era builder founded by Donal Caulfield, which is now in receivership. Other defendants named in the preliminary proceedings include CRH, Irish Asphalt, Lagan Holdings and Meenagh Plant Hire.
Daon, a Washington-based and Dermot Desmond-backed company that specialises in high tech protections systems, has developed a high tech security solution based on a person’s picture backed by a finger print and voice authentication, which provides a much more robust identification system than passwords alone.
Sunday Independent
The staff at Console were unaware their tax contributions had been going unpaid. The charity owed the Revenue €63k in staff taxes. In addition, the Revenue hit the charity with an additional liability of €16k. David Hall, the interim CEO, is seeking to address the tax bill and Pieta House has taken over the operations of its helpline.
Arnotts’ solicitor and developer, Noel Smyth, has struck a deal with the Weston family-owned Selfridge Group. Smyth’s investment vehicle, Fitzwilliam Finance Partners, is submitting a planning application to separate numbers 7, 8 and 9 Henry Street, an area of approximately 40k sq. ft. This is part of an overall deal that sees Smyth sell the Selfridge group his remaining 50% stake in the department store. Work is not expected to begin until spring 2018.
Hannah Dwyer, head of research at Jones Lang La Salle, has said that prime office rents have experienced “unprecedented growth”. Prime office rents in Dublin are back at their 2006 peak levels of €60 per sq. ft. and have the potential to reach €65 by 2018.
There is a good piece on the apparent 26% GDP growth Ireland experienced in 2015, suggesting Ireland expanded in size by €63bn in nominal terms last year. A “high-level cross-sector consultative group” is being put together following the negative reaction to the figures to look at how the CSO can better serve those who use its data. Paul Krugman, a famed economist, referred to the figures as “leprechaun economics”. Dan O’Brien also discusses the CSO figures in his piece in the Indo. He points out that the inflated GDP figures have brought Ireland’s debt as a percentage of GDP from 94% down to 80% and he focuses instead on private consumption figures, illustrating that it is a much better measure and that it grew by 4.5% in 2015. Private spending has passed €90bn and is about to move above the pre-crisis peak.
Niall Brady also has a good article in the Sunday Times covering the issue which is posing major questionable marks about the accuracy of economic data coming out of Ireland. The Editorial in the Business Post also reflects on Krugman’s reference to our GDP growth figure of 26.3% as “leprechaun economics”. Volatile swings are not good for presenting ourselves as a stable economy and we need to look at how we report aircraft leasing, relocating patents, tax inversions, etc. Surely there should be a core figure and then an exceptional line, because for every surprising gain there may be an equally surprising loss which will lead to another unhelpful figure.
Back to the Sunday Indo, Dan O’Brien also discusses some of the other CSO numbers released this week:
– He comments on the much bigger than anticipated increase in the Irish population and its workforce since 2011. This growth has been attributed to the smaller than expected net outward migration.
– In Q1 2016, the state’s debt obligations (less cash) stood at €173bn, more than €36k per head.
– Since the 2012 turnaround, the Irish economy has grown by more than 25%. He points to this, illustrating the fact that “pro-cyclical” fiscal policy still exists as the Government continues to spend more than it takes in.
– State spending, the largest component of the Government’s budget, has been on the rise since 2013.
Government subsidies for energy produced from peat have grown 330%, according to Michael Bradley, CEO of Solar21. He argues for the inclusion of solar-generated energy to be included in state subsidies. The Public Service Obligation levy that every Irish electricity customer pays has risen from €40m in 2011 to over €440m in 2016. Currently, peat makes up c.30% of this cost.
Emily O’Reilly, the EU Ombudsman, has advised the deputy governor, Sharon Donnery, and 50 high-level bank officials at the Central Bank on greater transparency and improved communication. The meeting followed Information Commissioner Peter Tyndall’s criticism of the Central Bank’s failure to comply with the Freedom of Information legislation.
The Competition and Consumer Protection Commission is appealing a High Court decision restraining the use of certain material acquired in a raid of the CRH subsidiary Irish Cement in May last year. Mr Justice, Max Barrett, ruled against the use of material unrelated to Irish Cement from CRH executive Seamus Lynch’s email account. CRH has a market cap of €21.8bn and an annual profit of €1bn last year, making it the largest Irish company.
The theft of Alan Kavanagh’s laptop has sparked a major data breach alert. Alan Kavanagh is a special adviser and personal assistant to the Finance Minister and runs Noonan’s constituency office in Limerick.
Irish shares have closed up 3.77% for the week. Best performers were Bank of Ireland, Permanent TSB and Kingspan who saw their shares rise c.10%, c.12.5% and c.8%, respectively. Statistics published by the Irish Stock Exchange show the ISEQ index lost 10.6% in Q2 this year.
BWG Group, Ireland’s largest retailer, has launched its own in-store ATMs which play video ads while processing withdrawals. The company owns Spar, Eurospar, Londis, Mace and XL retail brands, with Londis being bought for €23m last year. Property director, John Clohessy, has said the company wants to provide a more flexible money service and the ATMs will have a currency conversion feature with more features to come. The group has around 1.2k branded stores across Ireland and the UK.
The new Government is set to press ahead with Alan Shatter’s Gambling Control Bill, introduced in 2013. The bill would see fixed-odds betting terminals banned, a social gambling fund introduced to help gambling addicts (funded by a levy on gambling licence holders) and would limit the number of tables at a casino to a maximum of 15 and gaming machines to 25.
There is a good piece on the effects Brexit on Swiss companies. The Swiss Franc has a reputation as being a “safe haven” and the Brexit vote has forced the Swiss National Bank to sell its currency to prevent its value from rising excessively.
Conor Killeen, CEO of Key Capital, will have an active role in the direction of the Sunday Business Post after Paul Cooke announced during the week he is leaving to pursue another opportunity. Cooke took over a loss making business that faced the jaws of liquidation and turned it around to be profitable and growing in profitability. Killeen and Key’s chief operations officer Colin Morgan will now lead the executive committee arising from the merger of the SBP and Cork-based printing firm Webprint. The board will also include SBP editor Ian Kehoe and Webprint MD Donagh O’Doherty. The SBP recorded a decline in circulation of 3.2% in the July to December period year-on-year comparison for 2014 and 2015. Reported profits for the SBP were €78.8k last year.
This week’s interview is with Stephen Sealey, Brown Thomas’s group general manager.
Phillip Hammond, the UK’s new Chancellor of the Exchequer, has been tasked with protecting the UK economy from the fallout of Brexit.
There is a good piece covering the consolidation in the Irish media industry. As Facebook and Google continue to take more and more of available Irish advertising, Irish media outfits are being forced to adapt and a number of M&A deals have gone through to keep earnings at existing rates.
Dentsu Aegis Network (DAN), owned by Japanese agency group Dentsu, is on the look-out for more online acquisitions in Ireland. DAN has 190 staff with annual revenue of €145m. The group’s CEO, Liam McDonnell, is quoted as saying “digitally mature businesses are 25% more profitable”.
Sunday Times
The unexpected/questionable increase in Ireland’s reported economic growth will cost the country up to €400m a year in higher contributions to the European Union budget. The 26% rise in GDP, which has been dismissed as a statistical aberration (distorted by international companies relocating their HQs to Ireland for tax reasons) by Finance Minister Michael Noonan, could wipe out the potential for the €330m proposed tax cuts in the coming budget.
Brian Carey reports on the Clerys closure and the investigation by the Workplace Relations Commission as to whether labour laws had been broken by Deirdre Foley’s D2 Capital. It would appear that no wrongdoing has yet been established but there are lot of probing questions being asked. Carey also points out that by avoiding the €2m redundancy liability (which was passed to the state by the liquidation) D2 would have gained an advantage against other buyers, who would have had to cost the redundancy in to their purchase price. This week’s focus piece in the Sunday Indo also covers the matter.
Quantitative easing has compressed the yields on the AA Eurobond used as discount rate to calculate the future liabilities of Bank of Ireland’s defined pension fund. Though the fund is in surplus for accounting purposes, the actuarial deficit has shifted by €300m since the start of the year, which may put pressure on BOI’s ability to pay out a dividend this year.
Virgin Media, the broadband and TV provider formerly known as UPC, is expanding its high speed network to parts of Louth, Wexford and Mayo to boost flagging customer numbers. The move brings Virgin to Dundalk, Drogheda, Enniscorthy and Ballina. Virgin, which rebranded from UPC last October, had been losing customers to Eir and Sky. It lost almost 40k between the end of December and end of March and is now staging a fight back.
The state recorded a gain of €2.2bn on its investment in AIB in 2015, which has been wiped this year in the latest revaluation by accountants EY.
Cormac Lucey reports that while quantitative easing may have it hit its key intermediate targets, it has been unable to reverse the decline in expected Eurozone inflation levels.
Trinity College Dublin scientist, Prof. Luke O’Neill, has received backing from the Novartis Venture Fund and Fountain Healthcare in a new venture looking to develop treatments for arthritis and other inflammatory diseases. The level of funding raised is not disclosed.
Marlin, a British hotel and serviced apartment group, has increased the size of a planned Dublin hotel by almost 65% and is seeking new opportunities in Ireland post the Brexit news. The company is owned by John Corless, an Irish businessman based in the UK. Planning permission was granted for an 191-bedroom hotel at Bow Lane East, just behind the St. Stephen’s Green shopping centre, Marlin have now gone back for another 120 bedrooms and are looking to create a seven-story, 311-bedroom hotel.
Up to 800 debtors are due to emerge from bankruptcy at the end of this month, the first pool to benefit from the reforms that have reduced the discharge period from three years to 12 months.
Ray Bitar, former chief executive of Full Tilt Poker, has been disqualified from being a company director in Ireland for 10 years after the liquidation of two Irish companies in the poker group, Pocket Kings and Rekop. Full Tilt was taken over by Amaya Gaming in 2014.
Broadhaven Credit Partners have set up a joint venture with a Dublin-based finance company to buy and renovate older houses in formerly bedsit areas. Broadhaven has taken a 77% stake in Larea Fa, with the remaining shareholding owned by Lugus Capital, an investment firm headed by former Davy and Goodbody Stockbrokers analyst Perter Horgan and Tim Cahill who is also ex-Davy. The venture is reported to have up to €40m to buy properties and has already purchased 5 properties.
Laundrie, a Dublin company offering an on-demand laundry service, hopes to raise €1m to finance a European expansion. Evan Gray, the founder of Laundrie, said it aimed to complete the fundraising from a group of private investors in the autumn and will launch in Brussels and Amsterdam shortly after that.
Construction group BAM and UCD are in litigation in a row over payment for work on a €14m law school named after the former EU commissioner, Goldman Sachs president Peter Sutherland.
Dublin man Kevin O’Byrne is expected to keep his job as chief executive of Poundland, owner of Dealz discount stores, despite spending his first 13 days in the job negotiating the £597m sale of the group to Steinhoff, a South African retailing group. O’Byrne was previously a board member of Kingfisher plc and has served as chief executive of its B&Q DIY supplies chain in Britain and Ireland.
The Office of the Director of Corporate Enforcement (ODCE) is to ask directors of bust companies who are suspected of wrongdoing to agree voluntarily to be restricted or disqualified from acting as directors. The corporate enforcer believes a self-policing system, made possible by legal changes last year, could become the norm. The ODCE said it was making a ”strategic shift to confronting more serious wrongdoing this year” and “its resources are better used in confronting serious indications of criminality rather than lower level transgressions”.
NTR intends to pay a dividend of €18.1m to its shareholders next year, the majority of which will flow to the Roche family, who own 96% of the company. NTR has just completed a large restructuring, which resulted in the redemption of shares with a value of €138m. The restructure offered former shareholders who did not support the groups move into renewable energy projects in Europe the opportunity to exit the business. NTR closed a €250m fund last February; the money will be used for onshore wind projects in Ireland and the UK. Legal and General is the anchor investor, accounting for 47.5%. Other investors include Strathclyde Pension Fund and the Irish Strategic Investment Fund.
Shareholders in Providence Resources took up less than a third of an offer to subscribe for new shares in the company, leaving it €3.4m behind a fundraising target.
Goldman Sachs has liquidated an Irish subsidiary with $684m in assets.
Cerberus, a US private equity group, has seized the assets of a Co. Kerry property firm that owes more than €63m. It has appointed receivers to WK O’Connor and Sons and Inisfallen Inns. The group’s assets include a shopping centre, a bar and restaurant in Killarney and office and industrial schemes.
Banks will be obligated to explain their reasons for mortgage rate increases and warn borrowers in advance of cheaper alternatives under revisions to the consumer protection code to be announced by the Central Bank of Ireland this week.
Nick Webb’s inside track has a wide spread gain this week:
– Michael Carvills’s Kenmare Resources, which was once valued at €1bn, has lost more than 95% of its value. Kenmare defaulted on part its debt at the start of the year, but Carvill and his team persuaded the Oman state sovereign wealth fund, M&G and other investors to inject €247m for an open offer and share placement, which will keep the wheels turning for the foreseeable.
– AIB paid Ken Clarke €8.2k euro for doing its Brexit address gig at the National Conference Centre in March.
– There has been some investor activity in the Eddie Hobbs-backed Brendan Investments property fund launched in the boom: Noel Summers and Brendan Rooney (who sold Curam to IBM) have acquired shares.
– Aidan Shields, a Cork man who previously worked for Penneys, has been appointed COO of Victoria’s Secret.
Gavin Daly’s interview is with Tony Hanway, the Virgin Media chief executive.
Sandra O’Connell’s interview is with Oonagh Clarke, managing director of French Cosmetics.
10.7% – Percentage increase in UK FDI as a result of the proposed CT cut, according to @Cebr_uk. @IndoBusiness
20% – Percentage of non-performing loans in Irish banks’ loan books, according to the European Banking Authority. @examinerbiz
20% – The probability that investors put of a rate rise from the Fed this year, down from c. 75% before the Brexit vote. @IrishTimesBiz
0.2% – 0.5% – Expected contraction in the EU economy for 2017 as a result of Brexit, according to @pierremoscovici , EU economics chief.
€1bn – Amount of new mortgage lending in Q1 2016, down 2.5% year-on-year. @examinerbiz
78% – The probability investors are placing on a rate cut by the BOE this Thursday, according to a @Bloomberg survey. @examinerbiz
1.5% – The drop in average land prices in the six months to June, according to a survey by @Sherry_Fitz . @examinerbiz
26.3% – The growth in Irish GDP for 2015, up from its preliminary estimate of 7.8%. @IndoBusiness @CSOIreland
4.5% – The increase in consumer spending in 2015. @IrishTimesBiz
0.25% – The benchmark interest rate expected to be announced by the @bankofengland in a policy statement this morning. @IndoBusiness
€1bn – The amount suggested by @ibec_irl to be spent by the government on building social housing in 2017. @examinerbiz
11% – The percentage of residential home loan accounts in arrears at the end of March, according to the @centralbank_ie. @examinerbiz
260k – Number of vacant houses across Ireland, representing 9.7% of the total housing stock, according to @CensusIreland. @IrishTimesBiz
€1.5bn – Amount of additional fiscal space available in budget 2017 due to the @EU_Commission loosening rules for Ireland. @IndoBusiness
8.9% – The increase in the cost of rental accommodation across the country for the year. @IndoBusiness