Sunday Business Post
Latest Business Post / Red C poll on political party support:
Fianna Fáil – 26% (-1%)
Fine Gael – 25% (no change)
Sinn Féin – 13% (-2%)
Independents – 10% (no change)
AAA-PBP – 9% (+3%)
Independent Alliance – 6% (+2%)
Labour – 5% (-2%)
Green Party – 3% (+1%)
Social Democrats – 3% (-1%)
A new Red C poll has found that one-third of all shoppers in the Republic plan to do their Christmas shopping in the North in order to take advantage of the fall in value of sterling. This will be a big blow both to the exchequer and retailers in the Republic, particularly those in border regions. There is a one-page feature on this.
Both Ian Guider and Tom Lyons have articles on the report on the concentration of media ownership and Denis O’Brien’s ownership of media assets. Ian Guider said anybody interested in media should read the European Parliament funded report on the concentration of media ownership.
The Business Post has learned that Johnny Ronan and his business partner Richard Barrett had planned the construction of an iconic €200m tower on Dublin’s North Wall Quay in 2008. The plans never came to fruition and the proposed site was sold by Nama and CIE to developer Michael O’Flynn and Blackstone Real Estate last week for €20m. O’Flynn is planning to build 935 student accommodation units on the site. Ronan has secured other sites on the Docklands and has ambitious plans for the same.
Ulster Bank appears to be facing a significant amount of court actions from borrowers “who claim the bank stripped away key protections from them, enabling their loans to be sold to vulture funds”. The Sunday Business Post has learned that the borrowers and their advisers will argue that when the bank restructured distressed debts, it also removed a clause preventing the debt being sold to a non-bank operator. The loans were subsequently sold to a subsidiary of Cerberus Capital Management.
The High Court has found that the bread used by Subway is not eligible for the zero-rate of VAT due to its “exceptionally high” sugar content. Subway’s heated sandwiches were also deemed to be outside the scope of the bread exemption and are subject to VAT at 13.5%.
Catherine O’Mahony has an interesting piece on Tayto Park and Ray Coyle. The park is expecting total visitor numbers of 750,000 in 2016; for context, Dublin Zoo had 1.1m visitors in 2015.
“Arden Forestry Management has been appointed a provisional liquidator after its funds were frozen amid a Garda investigation.” Declan De Lacy of PFK O’Connor, Leddy & Holmes has been appointed as the provisional liquidator.
Róisín Burke has an interesting piece on the story of Febvre Wines, one of the country’s best-known wine and spirit importers, and in particular the chain of events which led to the Alken family losing control of the business.
Losses at Connect Ireland, an initiative founded by entrepreneur Terry Clune to use the Irish diaspora to attract jobs, has accumulated losses of €3.4m in the past 4 years. New figures show an improvement, with a loss of €263.8k in 2014, down from €1.1m in the previous year. The firm is hopeful of securing a new tender once its existing five-year contract with the IDA runs out next year. Its chief executive Joanna Murphy said the business was approaching breakeven and was beginning to see more jobs come through.
Frank O’Connor, director of funding and debt management at the NTMA, has highlighted the desire of international bond investors to see Ireland continue reducing its “elevated” national debt. Debt to GDP fell to below 79% at the end of 2015 but this may be skewed somewhat by the somewhat unexplainable surge in GDP observed last year; O’Connor flags that the absolute level of level of debt remains high. He also points out positives such as the savings in interest repayments due to the record low level of interest rates and the narrowing in spread between Irish and German debt.
Cabot, a US “vulture” fund which is part of Encore Capital, the biggest listed debt acquirer in the United States, has launched a string of new lawsuits against Irish business people, bringing its total number of legal proceedings to over 100 this year and over 350 in total. The latest proceedings are primarily summary judgements against small and medium-sized businesses in the west and south.
There is an interesting interview with John Cunningham, co-founder of Navan-based Epicom. The company was established in 1999 and now employs c.300 people. The company manufactures ambient dry food products for the retail market on behalf of multinational and export clients.
The Griffin Group, the firm which owns Hotel Kilkenny, the Ferrycarrig in Wexford and the Monart spa in Enniscorthy, has bought back its loans from Bain Capital in a €26m deal. The financing for the deal was provided by AIB.
Leanne Byrne has an interview with David Bobbett, chief executive of the global industrial kitchen manner H&K International and founder of the Irish Heart Disease Awareness charity.
He says, “if we know what the disease management programme is, then why don’t we get people on the programme before the heart attack?” He discovered by fluke that he had blocked arteries that could have killed him if he didn’t get forewarned. He very nobly is spending a lot of time and money creating awareness and similar to a message our late great friend Hugh Cooney had for anyone who would listen last year, the message is – GET CHECKED.
Two branches of the Doyle/Gallagher family are said to be lead bidders on NAMA loans connected to a group of properties assembled by Bernard McNamara in Clarendon Street/South William Street area.
Cantor Fitzgerald and Ulster Bank are backing Centric Health’s planned €10m primary healthcare centre in Co. Kildare. Centric also has investment from Bluebay. “Around 500 primary care centres were due to be developed in recent years, but just a fraction of those have materialised so far.”
Deliveroo is planning to roll out its service beyond its current reach of Dublin, Cork, Belfast, Limerick and Galway. It has 400 cyclists on its books.
A transaction last week saw Anchorage Capital move from being a significant shareholder to a majority shareholder in Eir. Barry J Whyte highlights that Eir has had eight controlling shareholders in the past 18 years and our communication network has fallen behind in the process. A ninth owner is almost certain in the short to medium term. Whyte suggests that this should be something ISIF would invest as it’s in line with its “economic impact” mandate.
“AIB is moving to shore up its security over hundreds of millions of euro worth of toxic loans secured on investment properties around the country before selling them early next year, The Sunday Business Post has learned.”
AIB has appointed Carolan Lennon (MD Open Eir) and Brendan Paul McDonagh (ex CEO HSBC North America and member of NTMA board) to its board.
Hugh O’Connell has an exclusive interview with Arlene Foster.
There is a special on Trump/Clinton. Paddy Power odds suggest 73% Clinton 25% Trump, 2% the rest.
There is an IMI page on various leadership topics. There are focus pieces on “Business Working Responsibly”, Pharma Industry awards, National Irish Safety Organisation and Mediators Institute of Ireland annual conference.
Dublin company Cubic Telecom has announced 60 new jobs following a new contract with Audi. Cubic is installing sim cards in the cars which will create wifi hotspots that facilitate 100Mbps internet access. The company is also in discussions with Audi’s owner Volkswagen to introduce the technology to the group’s 12 brands. Cubic has received €45m in funding from investors including Audi, Qualcomm and Sierra Wireless.
Businessman Bob Haugh is expanding the Oslo beauty salon on Mespil Road, which opened six months ago, with the opening of a new blow-dry bar, Hot Air, on the ground floor of the building. Clive Murray is a co-owner of the business which has also attracted investment from Rob Kearney, Amy Huberman and solicitor James Osborne.
Cork-based medical diagnostics company Radisens Diagnostics has secured a contract worth €1.6 million with the European Space Agency, its third contract with the agency since 2011. The contract will see the next stage of development of a device which will enable astronauts to conduct and analyse blood tests in space without the need to send the samples back to earth.
Aperture Partners, a specialist banking, finance and legal recruitment firm founded in June 2015 by Rory McCormick and Jonathan Brady, has opened a new London office which will target clients seeking to move employees to Ireland post-Brexit.
The Sunday Business Post has teamed up with UCD Smurfit Graduate Business School to offer a scholarship worth €34,500 for the full time or part time programme starting in August 2017. The deadline for applications is the 28th of November.
Ciara Clancy, founder of start-up Beats Medical which makes an app that helps with the mobility of Parkinson’s disease sufferers, will become the first ever Irish participant at Google’s Demo day. Beats’ backers include Enterprise Ireland, businessman Sam McCauley and tech entrepreneur Sean Melly, amongst others. 2017’s plans include expanding in the US and another fund raise.
Billionaire John Malone has generated some goodwill in Kildare, insisting that local labour and material be used where possible on works on his Castlemartin House.
Sunday Independent
“RTE has restructured its commercial division, consolidating its television, radio and digital sales into a single team as it faces up to significant losses for the year. Dee Forbes, the new director-general of RTE, said that the organisation has created One RTE, a new merged commercial division, in response to demands from advertisers. Until recent days, RTE’s television, radio and digital commercial divisions had operated separately.” Dee Forbes also features in this week’s interview.
OCS Properties, the new owner of the Clerys building and headed by Deirdre Foley, is expected to submit proposals promoting local employment both during and after the redevelopment of the department store. The proposals are expected to include plans to retrain former Clerys workers, apprenticeships to youths within its immediate surrounding area and to express its willingness to discuss its plans for redevelopment with Taoiseach Enda Kenny and Jobs Minister Mary Mitchell O’Connor.
Richard Curran covers Permanent TSB’s sell-off of its remaining non-core UK mortgage book, which came sooner than many expected. The bank has now completed the deleveraging programme that was a core condition of the restructuring plan agreed by the group with the EU Commission.
Curran also highlights the challenges C&C Group, a distributor of branded alcoholic drinks, faces in the wake of Brexit.
Irish Cricket Union Limited (ICUL) saw its revenues increase by €2m to €5.9m and recorded a net profit of c. €306k in 2015. Irish cricket’s success on the field has paved the way for commercial opportunities off the field.
Ardmore Studios, based in Co Wicklow, has warned potential buyers that “earnings in the current year will take a hit due to the postponement of a €100m-plus movie production and filming for Penny Dreadful coming to an end.” The studio, owned by U2 manager Paul McGuiness and accountant Ozzie Kilkenny, is expecting EBITDA in 2016 and 2017 of €1.4m and €2.4m, respectively. Sources indicate that Ardmore will be priced at 10x EBITDA. IBI Corporate Finance is handling the sale and has outlined how the currently unused 47k sq ft of space can be used to boost profits.
Godolphin Ireland Unlimited, a thoroughbred horse breeding operation backed by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum, has recorded an annual loss of €4.7m for 2015, down from €5.2m a year earlier. The company has net current liabilities of €190m. However, there is no fear over its financial future as Sheikh Mohammed bin Rashid Al Maktoum’s fortune is estimated to be over €18bn.
Murphy’s Ice Cream, a chain of ice cream stores founded in Kerry, has secured €75k in funding from online lender Linked Finance in what is considered Ireland’s largest peer-to-peer loan ever. The funds will be used to help finance the fit-out of a new shop and show factory in Dingle.
An appeal has been lodged against the Roche family’s planned five-story apartment complex in Ballsbridge by Jabid Ltd, a company which manages apartments neighbouring the site. The former cottage was sold by Waterways Ireland to Roches’ vehicle Praiano Ventures for €1.7m. John Roche is behind the Cocu Kitchen food chain which most recently opened a new store in Clarendon Street.
New Ireland Assurance has made changes to key personnel after making 25 long-serving employees redundant. The company has tapped Dave Roberts, previously head of finance at the company, to be the commercial director. Tony O’Riordan will return from PwC as chief financial officer and Dave Swanton, currently product director, will lead a unit dedicated to pension products for SMEs. In addition, Deirdre Flannery will be New Ireland’s chief operations officer.
“Germany’s finance minister has proposed shifting some of the task of enforcing the Eurozone budget rules away from the European Commission, which has repeatedly given way to governments’ pleas to be allowed to break fiscal limits. Wolfgang Schaeuble said the Commission’s “political” nature made it difficult to impose compliance on governments – and that the job of enforcement should be instead partly handed to the European Stability Mechanism, the Eurozone bailout fund.”
Peter Casey, the star of RTE’s Dragons’ Den and founder of recruitment firm Claddagh Resources, has said Tata’s Irish investments won’t be affected by the ousting of Cyrus Mistry as chairman of the board of the €100bn Mumbai-based conglomerate this week.
Ireland’s corporate tax rate is being threatened by the introduction of a Common Consolidated Corporate Tax Base (CCTB) and political changes in the US and the UK. The new CCTB aims to firstly create a common European tax base by agreeing a common set of rules as to how companies calculate tax and which expenses are tax deductible and secondly, consolidate European corporate taxes with companies’ taxes being apportioned to different countries by a pre-agreed formula, which would take their sales, tangible assets and workforce in each country into account.
McKinsey has recently published a research report that shows how European companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians and its Power of Parity report found that $12tn could be added to global GDP by 2025 by advancing women’s equality. Currently in Ireland, women make up only 12% of the boards and 22% of executive directors of Irish listed companies.
TJ McIntyre, a lecturer in UCD Sutherland School of Law and chair of Digital Rights Ireland, writes on the urgent need to update Irish law in order to give worldwide users protection over data.
Dan White discusses the lack of numbers to back up the thesis that the job-for-life is increasingly becoming a thing of the past. As of 2015:
– 83% of jobs in the OECD remain full-time, compared to 87% of those in the 1980’s.
– 3.7% of the workforce in the OECD are in involuntary part-time work, compared to 2% in the 1980’s.
– The percentage of workers in their current job for 10 years or more remained the exact same at 33%. This indicates that job churn is not increasing.
Irish retailers, who collectively employ 275k people in Ireland, are worried about the performance going into the Christmas season with consumer confidence low and macroeconomic uncertainty high. Figures from Retail Excellence Ireland show that retail sales in August, September and October dipped slightly across most sectors. Irish retailers are having to contend with a falling pound and an increase in the national minimum wage, while the government has provided little aid by leaving the VAT and Employers’ PRSI unchanged. 70% of Ireland’s €9bn online spend is going to retailers outside the state, with Retail Ireland urging the government to introduce an R&D tax credit to incentivise e-commerce investment.
Samantha McCaughren notes the heavyweight appointment of Ian Daly to the Cardinal Capital Ireland (CCI) team. Daly is a former corporate development director at Paddy Power, as well as being head of insight and commercial strategy. The CCI team is led by John Dolan and its portfolio includes well known companies such as Lily O’Briens, Carrolls, Payzone and the AA.
Sunday Times
Two new motor insurers based in Gibraltar are set to enter the Irish market. They bypass the need for Irish Central Bank regulation by being based in Gibraltar. Enterprise Insurance which had 14k Irish policyholders was Gibraltar-based and collapsed in July.
Brian Carey writes about Michael Noonan’s introduction of a withholding tax being placed on companies previously avoiding tax on income through ICAVs and QIAIFs. He said the fact that the tax rate that will ultimately prevail is 12.5% after interest costs suggests why the incremental revenue from the crackdown is estimated at a mere €50m.
The principals in Aventas, the vehicle sent in to clean up the Quinn manufacturing group, received €7.3m in pay and dividends of €3.5m in 2015. CEO Paul O’Brien, CFO Paul Donnelly, chairman Mike McTighe and COO Kieran Leonard are the biggest winners from the payout.
The €1bn loans taken on by developers John Flynn, Paddy Kelly and the McCormack family (who often trade as Alanis Capital) are being auctioned by NAMA. Some sources suggest they could be sold at par. The Project Tolka portfolio does not include any residential land, nor does it include loans connected to Carton House. It includes the Burlington Plaza, Belfield office park, and Power Tower (Paddy Power HQ).
Cormac Lucey writes about the winter of discontent facing us. He states that while the public sector are getting ready to revolt, the CSO claim that the private sector wages rose by 0.2% across the entire country. The current problem is compounded by the government’s need to get the blessing of the John Halligans of this world and to some extent a sympathetic Fianna Fail. More than 80% of the budgeted increase in spend in our most recent Budget will go on increased public pay and welfare. This is against the backdrop of the average private wage being €645 a week compared to the public sector average of €906/week. This ignores the value of DB pensions. This 40.5% differential sticks out like a sore thumb compared to the 15.9% differential in the UK. A historically high 830k workers are currently affiliated to a union of some sort on the Island of Ireland.
Ronan O’Caoimh, co-founder and CEO of Trinity Biotech, has said in light of the share price falling from $13 to $7 within the last month, the best use of company funds is to buy back the shares. However, David Cohen of Midwood Capital Management, a significant shareholder, is calling for the company to consider an outright sale. The Business Post also covers Trinity Biotech’s share buy back plans in order to counteract the slump in its share price following the failure to secure regulatory approval for a new test for heart attacks.
Hines Real Estate is said to have fought off Hibernia REIT in the bidding for the Central Bank HQ in Dame Street.
“Tontine Holdings, a regional media and property group part-owned by the unionist peer Lord Kilclooney, is set to agree terms with Allied Irish Banks on restructuring its debts, writes Philip Connolly.”
Zara and Maddimo Dutti sister brands Bershka and Pull&Bear are set to expand in Ireland.
“9 story, the Canadian media Company which snapped up Irish animator Brown Bag last year, is setting up a European distribution business in Dublin.”
Alltech, headed up by Pearse Lyons, is looking for 10 start-ups to take space on its accelerator programme it is promoting with Dogpatch Labs. The successful companies will receive €15k each and office space.
Alltech also features in the Business Post. The Kentucky-based animal nutritional company is in discussions to acquire two companies in Europe in South America. It has already acquired Keenan, the €40m Carlow agri-business this year, while it purchased Canadian Masterfeeds, a North American food cooperative, last year. Revenues are currently c.$2bn, but are expected to increase to c.$3bn in the near future as a result of acquisitions.
Celebrity chef Neven Maguire is extending his guesthouse in Cavan with an enlarged kitchen and dining room and six guest suites.
Kedelston Group, backed by Denis Brosnan and run by his son Paul, operates special needs schools and recorded a massive loss last year as it wrote down the value of a number of properties. The accounts state that the shift of UK government policy away from residential care was an “evolving challenge” for the three Kedleston operations. This is compounded by the severity of the cases it is referred.
Michael Dwan, CEO of Gowan Group, who distribute Peugeot cars, has said that new car sales are likely to stall in 2017. We are now selling 177k car units as a nation and have averaged 25% growth per annum in the past few years. The sterling devaluation has definitely increased the number of second-hand imports which is taking the wind out of the sails.
Senator Windows, another Gowan Group company, enjoyed double-digit growth in 2015 to get back to profitability.
“Trino Therapeutics, a Dublin biotech company backed by Fountain Healthcare, is being placed into voluntary liquidation after incurring losses of more than €7m.”
The InterContinental (nee Four Seasons) reported an operating profit of €1.3m in the 15 months to the end of 2015. John Malone bought the hotel from the Livingstone brothers in 2015.
Barry McAullife’s Artizan Food has won the contract to provide catering for Twitter staff. Nick Webb amusingly writes that “with shares crashing 42% in the past year, we might suggest a slice of humble pie”.
Emmet O’Neill is backing Dave Raethorne’s Hazelwood Demesne in Sligo. ”Raethorne plans to turn the stunning, if run-down, Hazlewood house into a visitor attraction, complete with whiskey distiller, vast playground and a water taxi on nearby Lough Gill.” Lar Bradshaw and Tom Kitt are also involved.
31-year-old Brian Lee, who opened his first Chopped store in 2012 and now has thirteen, is planning to open six more and is interviewed in the Times. The plan is to retain the current ratio of 1/3rd owned and 2/3rds franchised. He preferred this route to taking in investment and retaining ownership of all. Andy Chen is his partner in the business. He says there is a definite shift away from a cold calorie count to assessing what is in the food in terms of carbs, proteins and sugar. Chopped has a partnership with Aramark which will fast-track its franchise growth.
Paul McGowan, CEO of Hilco, is interviewed in the Sunday Times. He states that less than 30% of its business involves liquidations. He sees Hilco more as a high-street specialist. Over the past decade, Hilco has paid just under £50m in dividends, of which just about a third has gone to the chief executive over and above other remuneration.
€450m – The extra tax income the government will receive in 2017 as a result of not indexing the PAYE tax bands. @IndoBusiness
£18bn – The value of Northern Ireland’s manufacturing sector. @IrishTimesBiz
0.3% – The projected growth rate for Britain’s economy in the third quarter of 2016. @IrishTimesBiz
0.4% – The Eurozone inflation rate for the month of September. @IndoBusiness
c. 50% – The amount spent on Irish digital advertising attributable to mobile ads in the first half of 2016, according to @iabireland.
13.7% – The year-on-year increase in the number of mortgages drawn down in Q3, according to the Banking & Payments Federation Ireland.
71% – The number of Irish firms that expect to give pay raises next year, according to research from @ibec_irl. @IrishTimesBiz
8.1% – The jobless rate in Dublin for Q2 2016, an increase from the Q1 jobless rate of 6.9%, according to @CSOIreland. @IndoBusiness
0.5% – The growth in UK GDP for the third quarter of this year, a decline from the Q2 growth of 0.7%. @IndoBusiness