Sunday Business Post
Recent polls on political party support:
Fianna Fáil at 27% (-2)
Fine Gael at 25% (-1)
Sinn Féin at 15% (+2)
Labour at 7% (+1)
Independents at 10% (+3)
Other at 16% (-3)
Pre-budget coverage and lobbying are given plenty of space in the paper.
“The government is considering a wider budget clampdown on tax-avoiding vehicles used by international funds that own billions of euro worth of assets in Ireland, The Sunday Business Post has learned.”
Róisín Burke interviews Marcus Spring, head of Ram Capital. “Ram acts as a facilitator to connect performing businesses, including those with legacy loans owned by CarVal or other distressed debt holders, with finance or funding, and also provides currency services.”
Róisín Burke provides snippets of a recent talk John Teeling gave. In it, he gave some of his predictions about what the future might look like, from “baby formula, zinc mining, virtual payments, radical medical advances and, of course, whiskey”.
NAMA needed to be the “equivalent of an upper-tier British plc housebuilder in a much smaller market”, NAMA CEO Brendan McDonagh said it a board presentation released under a freedom of information request. The paper also notes the need to significantly increase the scale of its house building activities and the need for these to be commercially viable. NAMA’s cost of funding is much lower than the private markets and its commercial thresholds may be lower too. It will require a fine balance to deliver a much-needed housing programme without undermining the housebuilding market.
John Moran, secretary general of the Department of Finance at the time of the Project Eagle loan sale, has defended the transaction, telling The Business Post that the state’s “scarce resources would be better spent and used in Ireland rather than being tied up in the hope of making a profit by holding foreign assets”.
Irish Residential Properties Reit, the largest private-sector landlord in the state, has had its planning application for a 500-apartment scheme in Sandyford knocked back by Dun Laoghaire-Rathdown County Council.
“Financier Derek Quinlan and developer Bernard McNamara are facing a High Court action by Dublin docklands residents over a construction project hatched at the tail end of the boom.” The action relates to a six-storey office development at Sir John Rogerson’s Quay.
There is an interesting two-page feature with boxer Paddy Barnes as he makes the transition to the professional ranks.
Car rental software company CarTrawler has appointed Aileen O’Mahony as its chief commercial officer. The business is owned by two private equity companies, BC Partners and Insight, which bought it for €450m two years ago.
Neil Hughes, managing partner of Hughes Blake, which recently rebranded as Baker Tilly Hughes Blake after becoming a member of Baker Tilly International, expects his firm’s fee income to exceed €10m within the next three years following the alliance.
Tom Lyons has an excellent interview with Stephen Quinn, co-founder and CEO of Jobbio, an Irish start-up with the aim of revolutionising the recruitment industry. The company employs 37 people between Dublin, London and New York and recently completed a €5m Series A funding round which was led by John Hannon and John Lacy’s FinRes. Jobbio does away with CVs and lets people “apply digitally and privately to companies, using a live bio”. Companies using the website have access to a “live talent pool, not an out of date data file”.
There are plenty of positive stories in this week’s Done Deal section.
There is a good interview with Accenture Ireland managing director Alastair Blair.
Fyffes raised €47m through a share placing at a price of €1.50 per share. The new shares represent c.10% of the firm’s ordinary share capital. New funds will be used to maintain its balance sheet and for “pursuing attractive acquisition opportunities”.
The world’s largest shipping business and conglomerate, Maersk, will split in two after low oil prices and falling global trade hit the company. The business will divide into a transport business and an energy business.
After opening to advertising a year ago, Facebook-owned Instagram now has over 500,000 advertisers.
“The WTO has ruled that the EU failed to eliminate billions in dollars in illegal aid to Airbus”, ruling that Airbus was dependent on “direct and indirect effects” of EU subsidies.
Collette Sexton interviews Tullamore Dew’s global brand ambassador John Quinn this week. At least €25m is planned to be spent on the business’ site in Co. Offaly over the next 5 years.
Dublin-based LED lighting company UrbanVolt is set to grow its workforce from 22 to 60 next year. The company, which was founded last year, has the British, European and US markets in its sights, according to its chief executive and founder Kevin Maughan, who is also the feature of an interview with Leanna Byrne. The business recently announced a €5m investment in energy efficiency projects for businesses in Cork.
“We are now in the third era of economic growth, where rewards go to those regions with the highest percentage of creative people who use their brains rather than brawn to make a living.” David McWilliams muses on his recent visit to Lisbon, Portugal and the importance of a city’s creative infrastructure as a competitive edge when attracting new businesses and top talent.
The Blackrock Clinic saga continues. Shareholders at the clinic are expected to lodge a rival bid to Larry Goodman’s €16m offer for co-founder Jimmy Sheehan’s 16% stake in the clinic.
Róisín Burke interviews Kerry Group co-founder Denis Brosnan on the €500m investment scheme targeted at Limerick City. Richard Curran also covers the investment in the Sunday Independent.
There is a two-page feature on last week’s Pensions and Investments Summit.
There is a five-page special feature on Galway.
There are several interesting pieces on last week’s Ploughing Championships.
Sunday Independent
According to the Sunday Independent, “Eight staff at Cerberus European Capital Advisors Limited Liability Partnership (CECA) shared a pot of £39.56m (€45.7m) in the year ending December 31, 2015, an average of £4.95m, accounts filed in the UK Companies Office reveal.”
“Gardai are understood to be preparing a file for the Director of Public Prosecutions (DPP) to determine whether charges should be brought against a third former Nama official, who it has been alleged leaked financial information relating to the financial affairs of at least one major developer.”
Eddie McElhinney, the Co. Cavan-born founder of British metal ceiling manufacturer SAS International, has handed 95% of his company to his four children. The company, headquartered in Berkshire, has worked with world-renowned architects such as Richard Rogers and Foster & Partners, has sold three company divisions since 1995, has sales of over €100m and has offices around the world. McElhinney is also the feature of this week’s interview.
Peter Reilly, a senior research manager at shareholder advisory firm Glass Lewis, has said Brexit may provide opportunities for activists. Meanwhile, Steven Galet of FTI Consulting believes Ireland’s regulatory environment to be “very permissive for an activist fund to get involved”. According to a study by FTI, CEO turnover was 16.6% within one year and 30.9% over two years for firms without an activist investor. When activists gained board seats, chief executives left their firms 34.1% and 55.1% of the time in those respective periods.
Mid-market M&A activity for the first half of 2016 is down 23% in Ireland and the UK, with a total of 37 mid-market M&A deals worth c.€2.6bn recorded this year versus 52 deals worth €2.8bn in the same period in 2015. According to Katherine Byrne, head of BDO’s corporate finance team, the decrease in activity is “principally due to the uncertainty surrounding Brexit”. The most recent deals this year were Intel’s acquisition of Movidius for €300m and Brite:Bill’s sale to Israeli firm AmDocs for €230m.
Boylesports, founded by John Boyle, is expected to be outbid by British bookmakers Betfred in the acquisition of 360 betting shops being sold by Ladbrokes and Gala Coral as a result of their £2.2bn merger. Boylesports reportedly made a bid of €118m for the shops earlier this year and currently has 200 shops across Ireland. Betfred, based in Warrington in the UK, has c.1.4k shops.
Developer Michael Cosgrave, who along with his brothers Joe and Peter run Cosgrave Property Group, has said the government needs to introduce a grant for first-time home buyers of up to €20k, as opposed to the €10k being discussed in the lead-up to the budget. Cosgrave is also interviewed in this week’s property section.
City Splash Tours, the company that operates the Viking Splash Tours in Dublin, is to expand into the UK after a joint venture with London-based Golden Tours which has c.35 hop-on, hop-off buses and 15 coaches. The owners, Des and Fergal Rogers, recently unveiled their new amphibious vehicle, the Salamander, which they spent four years and €5m developing. The Viking Splash Tours business currently has turnover of c.€1.8m. Rogers believes the London opportunity will match a similar operation in Boston, in terms of scale, that carries 600k passengers and has revenues of $20m a year.
Centra, part of the Musgrave Group, is revamping 150 of its stores by creating a new look, introducing free wifi, a new deli and coffee offering and a healthier bakery range in an effort to capitalise on the healthier eating trend. €24m is set to be invested in the stores over two years, alongside €3m in marketing, according to Centra marketing director Ray Kelly.
Pamela Scott, the Barron family-owned Irish retail fashion chain, has invested c.€500k in a revamp of its store on Grafton Street. The group, which currently owns 25 shops, is also planning on opening two new shops outside of Dublin before Christmas.
The HSE has been censured by the state’s spending watchdog for “systematic non-compliance” in its procurement policies. The health agency was found to have disregarded purchasing rules in 30% of cases audited in 2015, equating to €480m worth of contracts that may have breached government guidelines. The comparable result for the HSE in 2014 was 12%, indicating a worsening of the problem.
Dylan Collins, the Irish technology entrepreneur, is raising funding understood to be in the tens of millions for his London-based SuperAwesome start-up, an online advertising platform for children. The company, which provides technology that makes sure websites and apps engage in appropriate behaviour when marketing to children, is expected to exceed €10m revenue in 2016 and expects over €20m in revenue for 2017. SuperAwesome’s current backers include: IBIS TMT, Twenty Ten Capital, Sandbox and Hoxton Ventures.
Ahead of the Irish Pubs Global Awards, conference and trade exhibition, Donal Ballance, former manager of Guinness’s retail and pub operations in Ireland and the UK, is sounding a warning bell about Irish pubs resting on their laurels. Keeping pace with rapid change in the hospitality industry is the key to survival, says Ballance. There are a number of interesting industry stats throughout the article:
– There are currently more than 7k Irish pubs across the globe, compared to 7.3k at home. The number of pubs in the Republic has fallen by more than 10% in the last 10 years.
– Irish beer exports are up 16% and are valued at €265m.
– The craft beer sector is estimated to have a 2% market share of the beer market, up from 1.2% a year earlier.
Richard Curran writes this week on the challenges that will be faced by David McRedmond, former commercial director at Eircom, when he takes the helm at An Post. Chairman Dermot Divilly is quoted, saying “the current business model at An Post whereby the profitable retail and other group businesses subsidise the loss-making mail business is becoming increasingly unstable”. Last year, the company increased its operating profits to €5.2m, but when pension interest and additional tax charges were added in it made a full year loss of €2.4m, down from €5.5m in 2014. Niall Brady’s Business Focus piece in the Sunday Times also covers the challenges ahead of McRedmond.
Curran also writes on the EU Commissions new mobile phone roaming rules implications post-Brexit.
This week’s focus piece is on “20 influencers who will shape our response to climate change” and is well worth a read.
Dan O’Brien covers the importance of data in learning what is going on in the economy. Specifically, he references the launch of the new and more comprehensive data series on property prices and how it will lead to less volatile markets in the future. Before last week, the figures were based only on properties bought with mortgages – about half the number of total transactions in recent years. The new data set illustrates that the peak-to-trough fall in housing prices was bigger than previously thought at -54% versus -51%, while the rise in prices since the trough is now estimated at 43%, rather than the unrevised figure of 37%.
O’Brien also discusses a paper written by Marco Buti, who was involved in all the bailouts, on the failings of the Eurozone during the crisis. He believes that “a consensus is eventually achieved, but often too late and at much higher costs”. He also touches on the increasing dominance of bigger countries in “pre-cooking” outcomes that end up as faits accomplis.
Sunday Times
Ireland’s three pillar banks are reviewing their stocks of bad debt provisions, following revisions to the national house price index last week. The new prices have revealed the property crash and subsequent recovery were more pronounced than previously thought. It is not yet clear what the banks will decide to do in relation to the impact of these revisions; there may be potential to release additional provisions, which would boost the banks’ profitability.
Brian Carey has an interesting perspective on the upcoming budget and how it should address the housing crisis. He believes the budget should lean towards “help to build” rather than “help to buy initiatives”, such as cutting VAT and building levies.
Virgin Mobile have only 11,800 subscribers out of a market of 4.8m in Ireland. It added just 1,300 in the previous 3 months.
Ireland’s middle class is still the wealthiest socio economic group in Ireland but is shrinking faster than in most other developed economies. It holds 60% of Ireland’s financial assets according a report conducted by German insurer Allianz. The middle class was deemed to be those owning assets of €7-42k.
More than 5,000 late entrants missed last year’s deadline to buy health insurance for the first time, and will face penalties that will average €140 a year for the rest of their lives. General premium hikes are expected to continue this year with VHI signalling a 3% rise in premiums from November with other insurers expected to follow suit.
Cormac Lucey commends the Irish Tax Institute on last week’s report where it broke down the Irish tax system into its 53 moving parts. Lucey thinks the system is too complex and benefits those who can afford clever tax advisers and suggests a retrospective tax should be considered to capture all the investment funds who were able to purchase assets and avail of charitable status and a benign tax regime.
Glen Dimplex, owned by Martin Naughton and family and based in Co. Louth, has acquired Cadet Manufacturing, a Canadian heater maker. The Cadet brand will be maintained but Glen Dimplex is expected to secure significant manufacturing synergies by amalgamating production into Dimplex’s Ontario facility.
Oran Pre-Cast, a Galway concrete company that has worked on a lot of big ticket building projects in the UK and Ireland, has lost a UK trademark infringement case against a former general manager and an ex-director who set up a rival company called Oranmore Precast. The court ruling agreed Oran had made the case for trademark infringement and passing off by Oranmore, however, Richard Burke, the former general manager, entered a compromise agreement in 2013, whereby he accepted €26k in full and final settlement in regard to €600k owed to him. The settlement agreement give him “wide ranging release” from Oran according to the Judge. The compromise agreement was deemed to take precedence over the trademark and passing off claim, which was dismissed in full by the court.
The BJ Fitzpatrick group which bought the Pandora and Alex and Ami products to Ireland, recorded a tenfold rise in profits to €6m last year. The company also has exclusive distribution rights for several watch brands including Hugo Boss and Tommy Hilfiger, and it also distributes diamonds and precious stones to other jewellers.
Lincor, an Irish-Australian technology group, aims to raise AU$30m in a listing on the Australian Securities Exchange in order to fund a global expansion.
Frank Daly and board members of NAMA declared 65 potential conflict of interests that required them to step out of board meetings since the agency was established in 2015. Only 15 have occurred in the last two years. BDO’s Brian McEnery, who worked as Michael Noonan’s director of elections on Limerick, accounted for more than half of all conflict declarations by the main board, mainly attributable to BDO’s property client base and other partners work on NAMA receiverships.
Celebrity chef Richard Corrigan recorded £10m (€11.5m) in revenues, boosted by the opening of his Virginia Park Lodge restaurant and cookery school business opened on the shores of Lough Ramor in Cavan. 90% of revenues came from his three London restaurants.
Serial biotech investor Seamus Mulligan has committed €9m in a funding round at Adapt Pharma, his heroin overdose treatment group. Adapt Phama identifies and commercialises so-called “orphan drugs” unloved by big pharma companies and has raised over $100m since 2013.
The listed drinks group C&C has admitted selling its Clonmel 1650 lager under a different name in Co. Cork, but has denied misleading customers. The company has confirmed it was behind Pana Cork Lager which was launched recently in a number of promises in Cork. Pana is local slang for St. Patrick’s Street in the city. Heineken Ireland has appointed Grant Thornton to investigate the matter which was reported by Newstalk Radio last.
Human + Kind, a Cork skincare products business, is targeting annual revenues of €20m within 3 years after coming out of Examinership. Jeremy Smith, a US businessman who moved to Ireland from Singapore last year, has invested €500k in the business which went into Examinership in February. It is understood all creditors were paid in full under the Examinership scheme of arrangement.
Druids Glen hotel and golf resort made a profit of almost €1m last year and expects to exceed it this year. The hotel is owned by the Finn family, who also own the PW engineering group, who invested €2m in the hotel under a refurbishment programme over the last two years and appear to be reaping the rewards of that investment.
Cupprint, a Co. Clare manufacturer of printed paper cups, has established a manufacturing presence in North America. The company, founded by Terry Fox in 2009, employs 100 people in Ennis and hopes to employ another 20-30 at its new facility at the University of Notre Dame in Indiana.
Enterprise Ireland has invested €200k in Econiq, a Galway company that makes software for financial call centres. The company raised €4m from Irish private investors last year.
Nick Webb’s inside track this week:
– Sandymount-born online trading pioneer and now full-time philanthropist, Philip Berber, who sold Cybercorp to Charles Schwab for €435m just before the dotcom crash in 2000, has dropped the selling price of his luxury Texas home which is for sale by $3m – the Texan estate can now be picked up for $19.9m.
– Gary McGann has been appointed as chairman to Aryzta. The Business Post also covers McGann’s appointment. Arytza, run by Irishman Owen Killian, has faced a tough few years with its share price falling from €71 to €35. The appointment of McGann to the board was well received by the markets, with its share price immediately going up by a couple of euro.
– Edmond Harty, founder of Dairymaster, the family-owned farm tech group and maker of milking machines, has moved into the Iranian market following the lifting of trade sanctions.
– Glenisk, the Irish yogurt maker, has doubled the size of its business in 18 months. It is now biting hard at the heels of Yoplait and Danone. “Protein Yogurt” has been the most successful category in dairy of the past year and is now 10% of the market.
Jason Corcoran interviews Eugene Kaspersky, founder of the global cyber security company Kaspersky Lab, which is setting up an office in Dublin.
The share price at Sports Direct rose following the resignation of Dave Forsey, its chief executive and Mike Ashley’s sidekick for 30 years, who seems to have shouldered the blame for recent bad press.
Brian Carey covers the background and disappointment of investors with NAMA over the sale strategy of the Clarion Hotel Liffey Valley, which had a complicated banking and investor structure.
There is an interview with Peter Flanagan, co-founder of Flanagan Kerins, the upmarket furniture maker and antiques restoration business. The business is now making a strong comeback after a tough recession.
28% – The year-on-year increase in the cost of motor insurance for the month of August, according to @CSOIreland. @IrishTimesBiz
7% – Decline in expenditure per student in the Irish education system since 2008, compared to an average rise of 8% in other OECD countries.
€4.5k – The extra amount in tax paid by Irish employees at the €75k salary level compared to their UK peers. according to @TaxInstituteIrl
€500m – Value of a State-funded initiative that aims to make Limerick best placed to capitalise on post-Brexit opportunities. @IrishTimesBiz
5% – Predicted decline in the housing supply over the next four years due to @centralbank_ie’s mortgage rules, according to the @ESRIDublin.
4.3% and 3.8% – @ESRIDublin’s latest forecast of Irish GDP growth for 2016 and 2017, respectively. @IndoBusiness
€4bn – Amount the USC tax currently generates for the exchequer. @IrishTimesBiz
€14.1bn – The projected value of Irish online spending by 2021, up from €7.5bn today, according to a @VirginMediaIE report. @IndoBusiness
54.4% – The peak to trough fall in residential prices from 2007 to 2013, according to @CSOIreland ‘s revamped Property Price Index.
9% – The reduced VAT rate for tourism services, which is estimated to cost the exchequer €350m per annum. @IrishTimesBiz
1% – The projected decrease in hotel occupancy rates in London for 2017, according to @PwC_UK. @IrishTimesBiz