Sunday Business Post
Michael Smurfit is interviewed in the Business Post ahead of his 80th birthday. His advice to young people is, “I have always advised young people to be entrepreneurial if they can be and to take chances in life. There is no reward without risk.” He cites the example of the owner of 20th Century Fox who drilled 169 oil wells unsuccessfully, before he hit one that had oil which made him a billionaire. “He didn’t give up. That is what people must not do. They must try to do something for themselves and not be dependent on other people. We are totally masters of our own destiny.”
On his son Tony who is CEO, he said, “Because of his name, he had to be far more successful than the average person coming through the ranks.” He thinks the biggest problem facing the civilised world is not economics but terrorism.
On Tony O’Reilly, he says that, “when I came out strongly in defence of his achievements, I got a very nice letter from him, a very nice one indeed.”
On the company (Smurfit), he said, “I bet the company three or four times in my life. Once is enough for anybody, but I had a vision we could make it work.”
Close Brothers, who have taken a big share of the asset-backed lending market and are known for their quick decisions, are expanding with the appointment of four new sales directors (Pat Buckley, Matthew Dolan, Kenneth Havelin, Anthony Aylward) and an Area Manager (Darren Robinson).
Frank Waldman, CEO of Digicel-backed Spiritz Technology, has stepped down from this position.
Sean Dunne and his Irish bankruptcy assignee Chris Lehane appear to have locked horns again; the detail is covered in an article by Róisín Burke.
Eamon Waters of Panda Waste and London investment firm Craven House Capital are heading for the High Court. The nature of the dispute is unclear.
Two interesting appointments are covered in Movers & Shakers: Niall Dorrian is the new CEO of Linked Finance and Pat Byrne has joined the Leading Edge group as a non-exec. He was head of the software division in Enterprise Ireland for 13 years and was with the IDA for 22 years.
Sterling fell to close to its 31-year low against the dollar on the back of measures introduced by Mark Carney to stem the effects of Brexit. The reduction in interest rate to 0.25% is the lowest in their 322 year history. The fact that Carney ruled out following Japan/European precedents of negative interest rates suggests that there is a floor on where it can fall to. Although with a 7% GDP deficit which requires borrowing in foreign currency to fund, it is still vulnerable.
BOI and AIB played down their low ranking in the stress test results on the basis that no extra capital is required, the tests are based on last year’s balance sheet and there have been improvements since, they are both profitable and generating and increasing capital reserve from profits being generated.
Jenna Boyle, Boylesports retail director and John Boyle’s daughter, is interviewed. They bid £100m for 360 bookmakers falling out of the Ladbrokes/Coral merger. They currently have 212 shops in Ireland, employ 1,400 and are a clear number two behind Paddy Power in the Irish market. They are seeing modest increases in average bet sizes, having fallen off a cliff after the Celtic Tiger. According to Boyle, “for the first time since 2008, we’re seeing increases of 3-4% on the average bet per slip.”
Philips 66 sold Whitegate refinery to Canada’s Irving Oil for €80m. It was sold for €100m by the state in 2001.
In order to make Ireland an appealing location for anyone relocating from Britain post-Brexit, the Government is expected to introduce measures that will soften the tax for high-earning foreign executives.
It is suggested that NAMA will have paid the equivalent of a record €100m for an acre of land to purchase a 1/4 acre at the former Hales Freight site at 86-88 North Wall Quay (€26m) from its Galway-based owner. This is a crucial piece of land required to unlock value in the neighbouring site where Ballymore/Oxley and NAMA have a joint venture ongoing.
Two London-based Irish developers Andrew and Maurice Gillick have bought the nine-acre former Chivers factory site in Coolock and intend to lobby to get it rezoned as residential and build on it.
Voxpro has just invested $4m in expanding into the US and is also looking at a similar investment in a Latin American expansion.
Cameo Global was reported to be interested in buying Voicesage for €20m but the deal did not go ahead and Voicesage is issuing High Court proceedings against Cameo. Voicesage provides customer messaging services for companies such as Argos and Zurich. Former BOI boss Richard Burrows is one of a number of blue-chip investors in the business.
Eamonn O’Reilly is looking for planning permission for a 70k square foot movie studio, a film school, a 68-bed hotel and a nursing home on the site of a burned out hotel (Red House hotel) in Kildare. O’Reilly’s main business is nursing homes.
Ulster Bank is now in a position whereby it is paying dividends to RBS. It made €155m in the first half of the year. There is a mini-interview with Gerry Mallon, the new CEO. Its share of the mortgage market rose from 14% to 18%this year. It has one non-core legacy loan portfolio to sell and then it is really a case of the new Ulster. He said that the strategic significance to RBS of owning a euro-based bank is significant.
Eugene O’Callaghan, head of the now €8bn Irish Strategic Investment Fund, is interviewed by Ian Guider in the Business Post. €2bn has been committed through various intermediaries and direct investments.
O’Callaghan says that, “The ISIF will have a dual objective – both investment return and economic impact. I am conscious that there is little precedent for sovereign funds globally investing with such a mandate, although a number of such funds are beginning to emerge. I believe that we are setting up a model that will come to be widely copied.” He also says, “I would say on the lending side there will be need for non-bank lenders. [But] we are careful not to become the market.” Guider questions O’Callaghan as to whether it is a unique model or “was its creation a political move to support a struggling economy by spreading state cash about?” O’Callaghan says, “That question will be part of the review of our Investment strategy. What is the appropriate balance between the two? I think the experience shows that it works quite well.”
“Vulture Fund Apollo has emerged as the winning bidder for NAMA loans attached to Harcourt Developments, the property company founded by Donegal developer Pat Doherty, according to industry sources”
“Dublin start-up Nuawave Sensors is valuing a deal with a Tennessee-based distributor of disinfection products to the education, healthcare and public sectors in the US at €5m over 3 years.”
Sunday Indo
Property developer Michael Maye’s global assets have been frozen by the High Court in London following a reported £1.2m dispute with a London-based consortium over certain property interests. It is reported that investors may seek to have Maye adjudicated bankrupt in Ireland.
The Dermot Desmond-backed diamond exploration company, Mountain Province Resources, has reported that its Gahcho Kue mine is on track to enter commercial production by the start of 2017. The mine will be the world’s largest new diamond mine. Desmond holds about 23% of Mountain Province Resources which jointly controls the mine 49%:51% with De Beers.
The Data Protection Commissioner is to publish guidelines on the Pokemon Go app. The app, which tracks user’s location as they use the app, has heightened privacy concern over “the safety and privacy implications of location-based games and apps”.
Chinese tech giant Alibaba is reported to be assessing Ireland as a possible location for a new data centre. According to Eirgrid figures, the paper reports that it is one of a number of tech companies that may invest up to €7bn in data centres in Ireland over the next decade.
The IDA has broken its lease on Carrisbrook House at a cost of €9.4m after a prolonged and unsuccessful campaign to secure new tenants for the building. The Ballsbridge building counts the Israeli embassy as its only tenant. Past and prospective tenants highlighted security concerns as a major deterrent.
Former junior minister Conor Lenihen has been caught up in some controversy over the Moscow-based Skolkovo Technology Park, which the US claimed last week was being used by Russia to spy on international companies carrying out R&D in the Park. Lenihen was previously hired by the Skolkovo Foundation and “played a key role in attracting many of the world’s leading technology firms” to the Park. He described the US claims as “curious”.
Irish-listed mobile phone services company Zamano is on the hunt for a new CEO after Ross Conlon left the role to take up the role as MD of new business ventures at INM. The company is reported to be considering a number of new acquisition targets with a new CEO potentially coming from one of these.
Mary Ricks, CEO and President of the property investment business Kennedy Wilson Europe, in a recent interview with the Sunday Independent stressed that they are “long-term real estate operators” and that the property firm is interested in expanding its Irish property portfolio through the acquisition of assets from other funds looking to cash-in on their Irish investments.
There is an excellent interview with investor Alan Dargan. Dargan started his career on Wall Street before going on to co-found Lansdowne Capital which provides investment advice to governments and sovereign wealth funds among others and is also co-founder of private equity fund Lonsdale Capital alongside Ross Finnegan.
There is a 2-page feature piece on Kenmare Resources. The cash-strapped company run by Michael Carvill was successful in closing out a fundraising round in the immediate aftermath of Brexit, which saw it raise new equity, agree a new debt restructure with its bankers and ultimately save the company from collapse.
A real yard-stick of the recovery is new car sales. Car distributors are expecting this year to be the busiest since 2007 with 150,000 new cars expected to be registered, the highest since 181,000 in 2007. Only 54,000 new cars were sold in 2009; quite the recovery.
Vincent Power, EU Law Partner at A&L Goodbody, writes a piece in today’s paper on how Brexit will be resolved.
Sean Gallagher this week interviews Paudie O’Conner, the third generation of Kerry-based animal-feed business Rhyno Mills. The family-owned business will celebrate its 100 years anniversary in 2019.
There is a profile on Moocall, an Irish company backed by Cairn Homes’ Michael Stanley and Dr Michael Smurfit that uses a device strapped on a cow’s tail to determine if it is going to calve soon and notifies the farmer. Through trials, the device can predict calving with 95% accuracy. The company has sold 13,000 sensors in 30 countries. Turnover is expected to hit €50m in 2018.
Richard Curran highlights that some data suggests a slowing in our recovery: VAT receipts are behind budget, unemployment has ceased to fall and remained unchanged in July, consumer sentiment fell sharply in July and the much celebrated higher than budgeted tax receipts have been buoyed by higher than expected corporation tax, the sustainability of which is yet to be determined.
Curran reports that Kerry is considering shifting some investment that might have gone into Ireland to the UK if a single market trade deal does not emerge. “Irish food companies in particular will have to consider locating investments which serve the British market in the UK”.
The Guardian, the world’s second-biggest news website, has reported a €204m loss. Its revenue from online advertising fell by 3% over a period where its online audience grew by over 30%. Adrian Weckler highlights that the Guardian’s problem is the same facing many media outlets: news has become a commodity item, increasingly read on Facebook and Google, rather than the publisher’s ad-controlled websites.
The Indo covers the Big Grill festival which will be held in Herbert Park next weekend, starting from Thursday. Organiser of the event, Andy Noonan, is a devotee of the American-style barbecue and describes the event as being more akin to a music festival than a food festival. The event will feature several high-profile barbecue “pit masters”, as well as Ireland’s first American-style barbecue competition.
Sunday Times
Two of the world’s largest international financial services companies are planning to create over 1k jobs in Ireland. Global fund manager Fidelity International has plans to ramp up from its current 65 employees to 600; 100 jobs are already being moved from London to Dublin. MetLife, America’s largest insurance company, is understood to be creating between 300 and 400 jobs in Galway. It already employs 300 people in Hatch Street, Dublin.
Brian Carey covers the housing crisis. Ireland needs somewhere between 25k-30k houses to revert back to normality. At €220k minimum build cost per house, this is €5bn plus per annum that would be required at a minimum, probably more considering the average build cost is likely to be a lot higher. The pillar banks do not appear to have the stomach for that much but I’m sure funds like Activate, Oxley and other international backers would find the money if the economics stacked up. The elephant in the room in my opinion is that site prices are far too high and there is a very illiquid market based on the amount held by a handful of entities. If the site prices came down, then house completions would go up.
Carey continues to champion for more answers surrounding the closing of Clerys and the sacking of its workers.
Ulster Bank has provided €118m to cover the cost of its potential exposure on tracker mortgages, AIB has set aside €140m, PTSB €105m and Bank of Ireland has still to announce its provision. When all is told, the combined provision is likely to be in excess of €450m.
The ESB pension fund is looking at taking a potential stake of €100m in a new investment vehicle established by Tetrarch Capital. The new fund is being established to buy 12 office buildings already controlled by the group. The ESB investment would allow US fund Pimco, one of Tetrarch’s main backers, to cash out on its investment in the offices. Tetrarch will remain as an investor and continue to manage the assets.
Debenhams staff have voted overwhelmingly to back a sustainability plan that includes up to 70 redundancies, a pay freeze and a harmonisation of grades across the company. Agreement from the staff will now likely pave the way for Examiner, Kieran Wallace of KPMG, to finalise a rescue plan for the retailer by the end of the month as the agreement has already been reached with landlords and Debenhams.
Cormac Lucey points out the officially used measures of our national debt and annual government spending deficit, which are expressed as a percentage of GDP, are seriously understated.
Ryanair plans to hire 7k more staff over the next eight years, bringing its total employees up to 18k, as it targets carrying more than 180m passengers annually.
Liberty Insurance, owner of the former Quinn Insurance business, has put the original Quinn building in Cavan on the market and is sub-letting half of its 10-storey Dublin offices after cutting staff numbers. The property rationalisation comes after Liberty announced 70 layoffs in June, on top of 270 layoffs and the outsourcing of 210 other jobs last year, bringing down the number of employees to 400; there were 1,500 when Liberty took over the business.
3FE Coffee, a Dublin coffee business that featured in a high-profile AIB advertising campaign, made profits of €150k last year.
The Radisson Farnham Estate has been bought for more than €26m by Austrian investor Thomas Roeggla. Roeggla’s Strategic Capital Investment Fund, which is managed by Davy, has now spent more than €50m on hotel deals. It already owns the Cavan Crystal hotel near Cavan town, as well as the Clarion hotel in Limerick, Diamond Coast hotel in Sligo, Fitzwilton hotel in Waterford and Aghadoe Heights hotel in Kilarney, Co Kerry.
Purleigh Holdings, a Denis O’Brien-backed company has got the go-ahead by Dublin city council to build 71 apartments on a site in Donnybrook previously owned by UCD.
Laya Healthcare, the country’s second largest health insurer, is closing in on a naming rights deal worth more than €5m for the RDS arena in Dublin. The company is expected to pay more than €500k a year for a 10-year deal to rename the stadium. The RDS last week submitted plans for a €26m development of the arena, increasing its capacity from 18.5k to 21k. The Business Post also covers the deal, but indicates that the deal “is worth more than €8m”.
The owner of the Ripley Court hotel on Dublin’s Talbot Street is planning to demolish the existing three-storey premises and replace it with a seven-storey hotel.
NAMA is lining up the sale of more than 400 Dublin apartments that were developed by Glenkerrin Homes, the building group of brothers Ray and Danny Grehan.
Red Rock, TV3’s Garda soap, is proving popular with BBC viewers, consistently attracting one million viewers.
Former Ryanair chief executive Michael Cawley and seed capital provider Tribal Ventures have backed a €440k fundraising at Unravel Analytics. The company’s software helps businesses understand better how customers interact with their websites and how to use this to maximise sales online.
Nick Webb’s Inside Track this week:
– Roma Downey, the Derry-born former Abbey Theatre actress, is executive producer on Ben Hur, the latest Paramount and MGM film which cost €90m to make.
– A site in Birr, Co Offaly bought as a site for a new HQ that was never built for €1.65m in 2004, is being sold for €85k.
– Bill McCabe of Oyster Capital fame has provided €3.8m funding to Peter Leonard and Derek Poppinga’s housebuilding scheme in Ballintemple, Co. Cork. McCabe lent the money to their MM Capital vehicle to buy a c.5acre plot beside the Churchyard Lane grave yard in Cork.
Samantha McGaughren has an article on the potential impact of Brexit on Irish tourism.
Gavin Daly speaks with Richard Fitzgerald, the original founder of Weboft, which went on to become Fleetmatics, the GPS-listed vehicle tracking company. The Business Post highlights Verizon’s recent acquisition of Fleetmatics for $2.4bn in cash as one of the least told Irish success stories. It started in an office in Templeogue in 2004. Two companies, one backed by Cross Refrigeration and another backed by Bill McCabe’s Oyster Capital merged their two companies together. Jim Travers, the outgoing CEO, is expected to net over $17.5m.
Sandra O’Connell speaks with Maggie Newell, managing director of a 30-year-old family business, Newell Roofing Products, which successfully exited examinership after a litany of post-boom bad debts and is now thriving.
26.8k – Number of houses advertised for sale in January this year, a year-on-year decrease of 13%. @IndoBusiness
15% – The loss of competitiveness for Irish businesses exporting to the UK since the Brexit vote. @examinerbiz
5% – The percentage of Irish businesses that have already been impacted by the weaker sterling, according to @IrishExporters. @examinerbiz
€42bn – The planned capital spending by the state over the next five years. @IrishTimesBiz
4.2% – Goodbody’s forecast for core domestic demand in 2016, down from 5% originally. @IrishTimesBiz
9.1% – The forecasted growth in revenue per available room for the hotel market for 2016, according to @pwcireland . @IndoBusiness
€26.61bn – Tax receipts for the first seven months of the year, up by more than €2bn from the same period in 2015. @examinerbiz
7.8% – The unemployment rate for July, the same level as June and May, according to @CSOIreland .@examinerbiz
€5.2bn – The extra amount workers are paying in income tax since the boom. @IndoBusiness
25bps – The reduction in interest rates by @bankofengland yesterday to a new low of 0.25%. @IndoBusiness
£60bn – The extra amount created by @bankofengland to buy government bonds, extending its QE programme to £435bn. @IrishTimesBiz