Sunday Business Post

Pat Hickey et al account for pages and pages.

Cerberus, Carval and Goldman Sachs have ramped up their receivership actions compared to last year. In the first eight months of this year, they accounted for 40% of the receivership actions. James Treacy of Stubbs Gazette said that “I would expect a further escalation of this type of activity as there are still thousands of these types of deals to be resolved.” This is just tracking the corporate receiverships, there are more personal receiverships that do not get tracked. Conor Sheahan of CSK Finance advises “If you don’t engage, you’re on a one-way ticket to a poor outcome.” What the expose does not show is how many of these receiverships relate to property as it is still tricky to appoint a receiver to a business and maximise value.

Interestingly, one of the early adopters and main users of iPads and e-books in classrooms, St Colman’s in Claremorris, Mayo, has dropped their adoption rate from 70% to 20% and it is heading towards 10%. The capital cost of the hardware of tablets is a big problem. Entertainingly, a problem they encountered in the early days was homework not being done as the children could not find the charger for the iPad.

“The government was scrambling this weekend to limit the damage from the European Commission’s investigation into a sweetheart tax deal with Apple in an attempt to prevent it imposing a fine exceeding €1 billion on the state.”

Charges levied on medical card holders for subscriptions is expected to reduce the budget. This is an intention of Fianna Fáil policy and FF will want a lot of their policy items actioned or else threaten not to vote for the budget.

Clondalkin Group, flexible packaging producer and service business, is eyeing a possible sale for well north of €200m. It was bought in an MBO in 2004 for €630m. Warburg Pincus own 86%, the rest is owned by the management from 2004 and now including Norbert McDermott and Patrick Mullaney. They have sold a number of divisions along the way and refinanced a few times and this sale is more than likely cream on top.

Paddy Power Betfair’s share price rose during the week. Brian Carey in the Sunday Times highlights that in the first half of the year, revenues are up 18% and underlying profit is up 39%. Noteworthy, online accounts for 80% of the revenues and 87% of profits. The Sunday Business Post reports that the anticipated cost savings of £50m from the merger have increased to £65m and have been delivered a year ahead of plan. 60% of the savings have been in headcount. The combined entity has a £300m marketing spend. Staggeringly, its £181m earnings for H1 2016 was wiped out by transaction costs of £190m in relation to the merger.

Stewart Kenny announced his retirement from the board of Paddy Power this week. What a journey that man has had from setting out on a journey that started with a few retail shops to building a £8bn enterprise value business and having a role to play at every juncture until his retirement this week. Let’s hope he eventually writes the book so generations ahead can learn about the journey of one of Ireland’s biggest success stories. The Smurfits, Ryanairs, Ryans, O’Reillys, Kerrys etc. all have their history chronicled for scholars of business to pour over.

Lifes2good has bought Irish skincare businesses Ogra Skincare and Berkeley. Both were bought for less than €1m.

“Scopely, the LA-based touchscreen entertainment network, has invested over €4 million in Dublin game developer Digit Game studios since taking a strategic stake in the business in May last year.”

Michael Butler is the liquidator of Kavanagh Book Binding Ltd.

Frances Fitzgerald writes on the late Peter Barry (1928-2016) “He was committed to the highest standards in public office, always treating whatever position he held as a privilege, never an entitlement.” “Alongside his political career, Peter had achieved considerable personal success through his beloved business, Barry’s Tea. But politics was his first love. For him, it was never about personal success; he had achieved all of that. It was about making a contribution and being of service to the country.”

Rye River Brewing of McGargles fame is expanding into Asia in 2017. It was founded by Niall Phelan, Alan Wolfe and Tom Cronin. Their revenues doubled to €12m last year.

“Popdeem, the Dublin-based on-line rewards company has raised €500k to fund its US expansion.”

The Department of Finance is very wisely set to launch a public consultation on crowdfunding. This is very wise as it has the potential to be a very powerful funding tool but may need some light touch regulation to avoid a few bad apples ruining it for everybody long-term. Austria apparently got a huge boost in crowdfunding on the back of regulation introduced recently.

Ras Medical Group, owned by Dr Ahmed Salman and his family, plans to open five state of the art nursing homes over the next few years in Dublin. The first home, a 90-bed facility, will be developed on the 370-acre site they bought in Wicklow and intends to be different than anything that is currently in Ireland. They were the preferred bidder for Mount Carmel hospital but it was sold to HSE in the end.

Robert Pitt has said that his firm is willing to explore joining forces with other media entities to sell advertising. Six major UK news groups have investigated in a feasibility study to explore the same. Circulation revenue in the Indo fell 5.4%, advertising revenue 7.8%, digital advertising grew by 23.4% and profits rose by 22.5%. Pitt has called for a zero vat rate similar to the EU.

Pat McDonagh has come out against the Government’s plan to build a service station off the motorway near Oranmore. McDonagh recently built a plaza near junction 16, just after the toll booth. McDonagh claims there is only room for one and that it is a waste of taxpayer’s money.

There is a feature on what Irish firms need to do to get noticed abroad.

There is an article on how Sinn Féin is now embroiled in the sale of NAMA’s Project Eagle loan book.

Mark Reynier of Waterford Distillery is interviewed in the Business Post.

The Business Post have extended the deadline for brands to enter their firm into the Agribusiness awards.

Elaine Byrne celebrates the work of 79-year-old Sister Consilio who ensured 75k people have been treated for addiction since 1966 in her various Cuan Mhurie treatment centres. She bid for a 42-acre field in 1972 with no funds and when asked how it would pay for it, she said: “our lady will provide”. She did and she raised the money. Most of the work has been done independently of the state over the years. She now gets half of her funding from the state and the other half is a struggle. It currently provides 70% of the national capacity of residential detoxification beds.

Sunday Independent

One51, a plastics and environmental services business headed by Alan Walsh, is closing on two acquisitions to improve its plastic business. The target companies are said to be in the US and the EU; the combined cost of the deals is reported to be c. €100m and will be funded via bank facilities. The company had first half-year EBITDA of €27.1m, more than double last year’s figure for the same period. The Canadian firm it acquired, IPL, was a big driver of the growth. The Sunday Business Post reports that Dermot Desmond will appoint two representatives to the board of the company. Pat Gilroy and Dalton Philips are likely to be his representatives.

Stefan Gerlach, former deputy governor of the Central Bank, has warned that the focus of debate in Ireland must shift from access to affordable mortgages to housing policy.

Michael Stanley, CEO of Cairn Homes, has said that his company can build affordable homes without the need for the Government to reduce the rate of VAT applied to housing. Stanley believes the company’s equity raise of €600m last year gives it an advantage over private companies. Cairn reported first-half revenue €16m above last year’s figure. Cairn acquired c. 6k sites at an average cost of just €19k as part of its €378m purchase of Ulster Bank’s €1.75bn par-value Project Clear portfolio.

Neil Naughton, the deputy chairman of Glen Dimplex, has said the company founded by his father, Martin Naughton, will not become a publicly listed company. His brother, Fergal Naughton, has taken over as CEO of the world’s largest electric heating and renewable energy business. Neil is also the feature of this week’s interview.

Robert Pitt, CEO of Independent News & Media, has said the search for deals is focused outside Ireland and away from traditional media. INM has a capacity of c. €119m for takeovers based on its €62.4m cash on hand and borrowing ability, according to Pitt. INM’s first-half results show a revenue increase of 2.7% to €162m, with revenues rising by 23.4% in digital advertising revenue.

Namaleaks, the whistleblowing website set up by TD Mick Wallace, has already been contacted by a number of the State agency’s former employees with claims of poor practice. The most serious of the claims revolves around Nama’s sale of its €5.6bn loan book, codenamed Project Eagle, to private equity firm Cerberus.

Margaret Byrne, former Sunderland FC chief executive, has set up a new sports management agency called First For Players.

Ian Quinn, co-founder of the Galway medical device firm Creganna Medical, which was sold earlier this year for €820m, has emerged as an angel investor in Bluedrop Medical. Galway-based Bluedrop has raised €600k to develop an internet-connected device which scans a person’s foot to detect the formation of diabetic foot ulcers. Bluedrop’s founders are Chris Murphy and Simon Kiersey.

Merrion Pharmaceuticals chief executive John Fox announced last week that it is to seek shareholder approval to be wound up. Irelandia’s Declan Ryan is said to have own a 13% stake in the company.

Dermot Desmond’s IIU Nominees upped an existing stake in Dermot Smurfit Jr’s gaming business GAN last week via a £1.3m share placing; IIU now owns 4.6% of the business. According to GAN’s annual report, Michael Smurfit Sr owns c. 10% and Tony Smurfit has a c. 8.5% stake in the business.

eBay has announced it’s shutting down its operations in Dundalk with 150 jobs set to be lost. The move comes as a result of increased competition by venture capital backed start-ups.

Management at Dundrum Town Centre has hiked car parking charges by 50%.

The annual staff turnover rate at the Central Bank has been c. 8% since 2013, with some divisions experiencing a 20% turnover rate. Liz Joyce, director of HR at the Central Bank, has alerted the Banking Commission to “very high levels” of internal churning, whereby vacant roles are filled by internal candidates. The bank intends to hire an additional 300 people over a three-year period, bringing total headcount to c.1.8k.

Dan O’Brien writes on job growth in this week’s column. The figures provide insight into which sectors have improved most since the crisis.

• The improvement in the labour market and the wider economy have led to a turning of the migration tide with more people now coming to live in Ireland than departed.
• The fastest growing sectors for jobs are: construction, hospitality, professional and scientific, Administration, Industry and IT.
• At the beginning of 2008, there were 320k employed in the wholesale and retail sector. Four years later that figure had dropped to 50k and hasn’t budged since.

Dan White highlights the current debt situation in Ireland:

• Ireland’s 10-year yield hit 0.41% last week compared to yields of almost 15% back in 2011.
• Ireland’s gross debt as a proportion of annual government tax revenues, which currently stands at 285%, compares unfavourably to the EU average of just 159%.
• The average interest on this debt is currently about 3.4% and interest payments currently take up 9.6% of total revenues; should the average rate increase by 1%, the proportion of revenues going to interest payments would jump to 12.6%, this would eliminate any scope for tax cuts.

This week’s focus piece covers 14 of the big names in property development. It focuses on what they did in the boom, where they went in the bust and where they are today.

Sunday Times

Larry Goodman’s Setanta Centre on Nassau Street, which is for sale for over €100m, is receiving interest from US property fund, Tishman Speyer among others. It is understood that Goodman is in an exclusivity period with another bidder until mid-September. Tishman Speyer owns the Rockefeller Centre and Chrysler Building in New York City.

Oisín Fanning, CEO of San Leon Energy, has been awarded 3m of shares in the company. The shares are in lieu of his salary and are part of his salary sacrifice deal where 80% of his £900,000 annual salary is in the form of shares. The company is in the process of raising £170m to fund the purchase of a material interest in a Nigerian oil field. Shares were priced at 45p for the fundraising.

The Irish Aviation Authority (IAA) is to spend $11m to acquire a further 2.25% of Aireon, a US-based company which intends to form the world’s first satellites-based air traffic monitoring system. The IAA first invested in Aireon in 2013 when it acquired 3.75% for $18.4m.

“Enterprise Ireland has doubled its investment in LogoGrab, a software company whose technology was used in a global augmented reality promotion for Heineken.” The company was founded by Luca Baschin and Dr Alessandro Prest. “The technology is also being used to monitor social media to see when brands pop up on Twitter and Instagram.

Motor Insurer Zenith is to exit the Irish market in February. A primary reason is believed to be disagreement over gaining access to the industry’s database on driver’s penalty points and no-claims bonuses. The company cited “a lack of engagement with us by Irish industry bodies, which we believe creates a market disadvantage for us and our partners”.

Kevin Byrne, an Irish man who is CEO of Poundland (trades as Dealz in the Ireland), has been offered a £2.7m potential “golden handcuff” if he remains with the company until November 2019 following its possible takeover by South African retailer, Steinhoff.

114 audit firms were judged to have unsatisfactory standards last year, according to the Chartered Accountants Regulatory Board’s annual report.

“Permanent TSB has appointed Eddie Kearney as head of mortgages in a move to boost its flagging performance in the loans market”. Kearney moves from his previous post of head of savings in the bank.

Tom Hickey has been appointed CFO of CarTrawler. Hickey was formerly corporate development director of Petroceltic and finance director of Tullow Oil.

The company which owns the Irish franchise for Inglot Cosmetics has been valued at €4.6m in a recent internal share transaction according to documents filed with the Companies office.  The company operates from 13 locations and is owned by the Swarbrigg family who brought the brand to Ireland in 2009. Retained profits in the firm were €500,000 at the end of 2014.

Start-up Energy Exchange is close to agreeing on a deal which will see Bord na Mona take a 50% share in the business. Energy Exchange was founded by Dr Paddy Finn and Duncan O’Toole and it allows companies to earn money by feeding excess electricity back into the grid when not using it. The acquisition is part of Bord na Mona’s strategy to increase its exposure to the Irish Renewable sector.

Brian Carey highlights the impressive results from the newly combined Paddy Power Betfair. In the first half of the year, revenues are up 18% and underlying profit is up 39%. Noteworthy, online accounts for 80% of the revenues and 87% of profits.

Dalata is being lined up to operate the Burlington Hotel in Dublin 4 by its potential new buyers, a German pension fund. If the deal goes ahead, Dalata will own or operate almost 25% of the hotel rooms in Dublin with a further 500 rooms to come to the market through extensions, refurbs or new openings.

The window for the submission of opinion on the Central Banks mortgage lending restrictions closes this week. The paper carries a one-page piece on the possible proposals being put forward.

UK fund manager Neil Woodford has bucked convention and scrapped bonuses for his 35 staff and has instead increased their basic salaries. Woodford believes that bonuses are “largely ineffective in influencing the right behaviours…[and]…can lead to short-term decision-making and wrong behaviours”. The paper has a very interesting read on incentivising and aligning employees’ interests.

Barry Hartigan interviews Ronan Healy, founder of event manager Catapult. “Catapult devises, designs and produces events from concept to completion.” Customers include the Web Summit, Elon Musk’s Hyperloop One, RTE, Bord Na Mona, and the Science Gallery.

In the lead up to the next series of RTE’s Dragons’ Den, Sandra O’Connell looks back on previous seasons’ entrepreneurs and speaks with them on where their businesses are now.

Deirdre McCafferty, owner of the tasty vegetarian and wholefood restaurant on Wicklow Street in Dublin’s city centre is interviewed by Sandra O’Connell. Impressively, the restaurant is 30 years in business this year. There aren’t too many restaurants in Dublin that have been going for 30 years.

Nick Webb’s inside track this week:

• Conor McGregor earned a reported $3m fee from his recent UFC fight with Nate Diaz.
• Paul Coulson’s Ardagh paid out €82m in fees relating to the acquisition of parts of Rexam and Ball in April. Citigroup and New York law firm Shearman & Sterling were the big winners with Irish lawyer, Claire O’Brien the top-billed dealmaker in Shearman & Sterling.
• Former Central Bank governors join with current senior management for an annual dinner in the private dining rooms in the Bank’s HQ on Dame St. This year’s dinner cost the taxpayer €482 and “provides an opportunity for the senior management to engage with former governors to debate and engage informally on current economic and policy debates”.
• Insolvency Service of Ireland director Lorcan O’Connor’s recent four-night trip to the annual conference of the International Association of Insolvency Regulators in Singapore cost €2,070.
• Michael Cawley, formerly of Ryanair, has joined the board of the Gowan Group, one of the Ireland’s biggest car and appliance distributors. Cawley was CFO of the Gowan Group before he left to join Ryanair in 1990.

Twitter
£304k – Average asking price for a home in Britain, over 11 times the average British salary, according to @rightmove. @examinerbiz

39% – The percentage rise in the average rent since bottoming out in 2011, according to a @daftmedia report. @IrishTimesBiz

74% – The average loan-to-value reported by @bankofireland on its existing €24.6bn of mortgages in Ireland. @IndoBusiness

4.3% – Predicted growth in Irish GDP this year by Friends First. @IrishTimesBiz

600% – Amount the property tax would have to increase by to replace the revenue lost if the USC is scrapped, according to @IRLDeptFinance.

11.1% – Increase in the average rent in Dublin on an annual basis for the second quarter of this year, according to @daftmedia.

2.9% – The annual increase in employment in the second quarter of this year, according to @CSOIreland. @IrishTimesBiz

15% – Increase in private pension coverage among workers aged between 25 and 34, according to a survey by @StandardLifeplc. @examinerbiz

18% -The amount on average by which women are paid less than men in the UK, according to @TheIFS. @IrishTimesBiz

1% – The predicted fall in UK house prices next year, according to @CountrywideUK. @IrishTimesBiz

€2.9m – Average salary of the top 10 highest rewarded CEOs in Irish public companies, 80 to 90 times the average wage in public companies.

2.6% – Year-on-year rise in taking at the tills for grocery retailers in the three months to June, according to @Nielsen. @IndoBusiness

20% – The amount by which Irish labour costs are above the EU average, according to @SFA_Irl. @IndoBusiness