Sundays Business Pages Roundup

Renatus is focusing on investing in SMEs with earnings of >€500k with growth potential. Renatus' typical investment cheque is €1m-€3m in businesses worth in the region of €3m-€10m. Renatus generally writes an equity cheque alongside traditional debt for management buy-outs, management buy-ins or businesses buying other businesses.

Sunday Business Post Advisers on the sale of part of the government's stake in AIB are expected to net €40m based on average deal fee rates of 1%-1.5% of the money raised. Bank of Ireland's top 190 bankers received an average of €285k remuneration last year. Permanent TSB paid its top 63 executives an average of €190k each last year. According to the Sunday Business Post, no Irish bank executive earned more than €1m in the past year. The Sunday Times and Business Post report that Joseph Sheehan and Larry Goodman have a new legal battle over plans to build a €17m extension to the Galway Clinic. Sheehan claims the plan approved at a recent board meeting needed his consent and it looks like it will create a cash-call he cannot meet and reduce his shareholding and authority. Sheehan's brother, Jimmy, offloaded his 25% stake in the Galway Clinic to Goodman for €31m and is set to sell his Blackrock shareholding also. Last week, in a separate case, the court ruled in favour of Goodman in relation to the judgement he served on John Flynn. Flynn will more than likely have to pick up the €1m tab for Goodman's expenses. Graeme Beere is interviewed in the Business Post. Abrakababra is set to invest €5m opening ten new stores in the next three years. Beere's group, which owns O'Brien's sandwich bars, Abrakababra and the Bagel Factory, will make a profit before tax of almost €2m for 2016 off €60m turnover. He expects to have profit before tax of €3m by 2022. The group currently has 130 stores across Ireland. It sold Gourmet Burger Kitchen last year, and, with the help of Bluebay, he restructured his loans as they came out of IBRC and is focused on paying them down now. Greencoat Capital is progressing plans to IPO. The purchase of two wind farms for €300m is the first step towards what will very likely be a much bigger vehicle. Davys are advising and ISIF and AIB are said to be backing the acquisition of the two wind farms. Paul O'Donnell will head up the Irish vehicle. The owner of the operating company of Avon Ri, the lakeshore resort and adventure centre in Wicklow, has petitioned the High Court for examinership. Mel Sutcliffe and Rory O'Sullivan's Quanta Capital recently acquired the freehold site when it bought debts attached to it from Deutsche bank. Quanta has said it will be supportive of the examinership. Sligo man Heinrich Anhold's company StableLab will double its staff over the next two years as it expands in Britain and the US. The company has had amazing success in the US and 13 other countries. It has raised €2m since inception, is running at €3m in revenues and is profitable. Interestingly, he says he has had limited success in the Irish market as “They are people trying to make money out of their hobby. Those types of individuals tend to try and keep costs down. They are not people who try and spend a lot of money with their vets,” "Former property developer George Tracey has launched an appeal against a Circuit Court order granting Nama possession of his luxury mansion in Westmeath" Multibillion hedge fund Citadel Securities intends to grow its staff from 10 to 25 five next year. They are running a competition for students with a prize of €25k in order to secure the best entrants. "Dublin-based tech start-up Rebrandly is raising €5m for a global expansion." Michael Murray and Ian Guider have a special focus on the fragility of Permanent TSB given its legacy exposure to distressed Mortgages. Chairman of Eason, the Irish-owned book and stationary retailer, James Osborne has written to shareholders telling them Brexit may have a large effect on the business. They are looking hard at their supply chain in order to make savings to mitigate their exposure. Grafton Group and its subsidiary Woodies reported very strong figures during the week. Woodies’ turnover rose by 5.65% to £157m and operating profit was £373m (up 90%). They are reinvesting in the store estate and, by the end of the year, 20 of its 35 stores will have been refurbished. They are also moving into the fitted kitchen market. Dental Care Ireland has been quietly acquiring Dental practices around Ireland. It has acquired 11 practices with turnover of €10m. To-date it has not branded them but it will brand its first in Ashbourne later this month as Dental Care Ireland. Video Doc, which provides software to fulfil video consultations with GPs, is set to close a €2.5m fundraising round. Essentra Packaging, who bought the Clondalkin Group from Warburg Pincus, will receive €88m from winding up its Dutch operation. The FTSE 250 company has said: "integration issues primarily relating to the Clondalkin acquisition in health and personal care packaging not only resulted in additional cost but also in accelerating decline in the underlying trading position of the company." Domino's Pizza, which has 47 outlets in Ireland, will open its first two new outlets since the recession this year. Sales last year hit €61.7m like-for-like normalised for currency fluctuations, sales rose by 10%. Online orders rose by 26%. It does not disclose profit figures for Ireland. There is an article reminding us of the reliance our food sector has on the UK. 50% of beef, 60% of cheese and 90% of Mushrooms are exported to Britain. Not only is the risk of a tariff and currency great but competition from countries outside the EU is likely to intensify. The Business Post has a special on whether An Post can be saved. The SundayTimes reports that An Post lost €45m from operating the national postal service last year, a 40% increase on the losses of €32.3m reported in 2015. Chief executive, David McRedmond will contact the country's 1,000 independent postmasters this week, warning them that the financial crisis at An Post requires immediate action. The Sunday Independent writes that the number of Post Offices targeted for closure in its restructuring plan is now reported to be a multiple of the 80 reported last week. There may be the possibility to move a “significant number” of Post Offices to local convenience shops. There is a special interview with Willie Mullins ahead of Cheltenham. Ed Micheau also interviews Barry Maloney (of Benchmark/Balderton fame) and his brother Mike about the thrill of ownership as they have two runners. Jennie McGinn gives a very honest interview about why they decided to liquidate Opsh, the online shopping start-up. Private investors invested €13.6m last year in 50 start-ups through the HBAN network. Since 2007 HBAN has invested €73m through 362 separate deals. Joe Higgins of BMS Finance is pictured with Obelisk CEO Declan O'Neill, whom they provided a €3.5m loan to. This is BMS’ ninth investment in the Irish market. There is also a formal announcement in the Business Post of the €10m funding by BDO Development Capital in Alan Foy's Blueface. Cork-based fertility clinic Waterstone has invested €4m in a new 13k square foot facility. There is a six-page special on cyber security.

Sunday Independent

Insurer, Lloyd’s of London, look set to choose Luxembourg or Berlin over Dublin for their European HQ post-Brexit. The news follows AIG’s announcement that they have chosen Luxembourg for the relocation of their European HQ. Among others, the government is still in talks with Bank of China, Bank of America and Morgan Stanley. Killian O’Higgins, MD of real estate advisory firm WK Nowlan, is interviewed by Gavin McLoughlin this week. A specific point noted by O’Higgins is the cost of property in Ireland and the risk arising from it for attracting “Brexit relocations”. It is not just our high cost of office space but also the availability and cost of residential property. Richard Curran’s piece: - Given the political risks, Curran is surprised with Michael Noonan’s decision to allocate a portion of the upcoming AIB flotation to retail investors. The investment, he comments, is low risk (but not without risk) and growth will be determined by the lending economies ability to grow. - Based on the IPO valuation being used for the upcoming flotation of a small equity share (c. 7%) in Ardagh, Paul Coulson’s shareholdings is being valued at c. €1.5bn – the highest personal stake held by any director in an Irish PLC. TheSunday Times reports that Ardagh paid out bonuses of $26m to key executives last year in recognition of the “transformative” acquisition of factories from Rexam and Ball. - Paddy Power Betfair’s merger appeared to have delivered some positive results in its first year. The group reported increased revenues of 18% to £1.55bn and underlying EBITDA increased by 35% to c. £400m. It expects to see c. 20% of EBITDA growth in FY 2017. Irish engineering business Byrne Looby is planning to grow its business by looking to acquire two UK businesses with complementary services. Byrne Looby has €15m of turnover with operations in Ireland, UK and the Middle East. With the two UK acquisitions and growth in new contracts, the business is targeting revenue growth to €25m. Jobbio, an Irish online recruitment company, set up in 2013 by Stephen and John Quinn (former owner of Champion Sports) has partnered with UK media giant ISG UK. Jobbio delivers targeted content which allows media outlets and publishers a tremendous opportunity to expand corporate revenue generation opportunities ultimately paid for by companies seeking to hire. The link up will see Jobbio become the “largest curated technology and design jobs marketplace in the UK.” Jobbio raised €5m in growth funding last September and is, among others, backed by Balderton Capital’s Barry Maloney, former Grafton Group chairman, Michael Chadwick and members of the Smurfit family. Boylesports has opened five new stores, three acquired from independent bookmakers and two new stores. The business is targeting 10% growth in store numbers in 2017, which will take it to 225 stores in Ireland. It is also planning to establish a presence on the high street in the UK; growth here will be from acquiring the forced sale of stores through the Ladbrokes and Coral merger and picking up smaller regional British bookmakers. Of the 295,000 active directors of registered companies in Ireland, 104,000 (c. 35%) are female. The level of female directors in newly formed Irish companies is even lower, falling from 34.5% in 2011 to 26.6% in 2016. Independent TD Mick Wallace is seeking legal changes that will see the life of a judgement fall from 12 years to two years and the statute of limitations for the recovery of debt fall from six years to two years. He introduced the bill to the Dáil last week. Oneview, an Irish hospital technology company that is listed on the Australian stock exchange, has signed a deal to work with Intel to accelerate its growth in the interactive patient care market. “Oneview integrates a hospital’s IT systems onto a single tech platform to aid patient engagement and speed-up workflows for medical staff.” Dan White comments on the decline of the bank branch and rise of online and digital banking. Ulster Bank has reduced its branch numbers by almost 60% over the last 10 years and AIB has reduced its branch network by 25% since the crash. 80% of AIB’s cash and cheque lodgements are now completed digitally through their self-service machines and the Bank now counts 40% of its customers as “digital only”. This week, Sean Gallagher interviews Poulet Bonne Femme co-founder Sara Mitchell. The food retail business operates from five locations, employs 40 people and generates revenues of €1.5m.

Sunday Times Brian Carey’s agenda piece this week: - Carey believes NAMA may not be up to the task of putting a dent in Dublin’s housing crisis. NAMA has been tasked with delivering 20k homes by 2020, this would require NAMA to match the house-building activity of a top-tier quoted UK house-builder. - PTSB has 200 staff or 10% of its total workforce working in compliance. Carey highlights that banking levies and compliance costs are hitting the smaller banks harder and in particular PTSB. The other smaller operators like KBC and Ulster Bank are part of larger international groups whereas PTSB is not. - CRH chief executive Albert Manifold earned €10m in 2016. Manifold can earn up to 5.8 times his salary in bonuses. JP Morgan is looking to expand its Dublin operations, with the US investment bank possibly creating another 150 jobs on top of the 500 staff it already has here. Bernard Somers, an accountant and debt restructuring expert, is being pursued by CarVal over outstanding debts which CarVal purchased when they acquired Project Stone the IBRC loan portfolio sold in 2014. Cormac Lucey has a good piece this week on deleveraging, one of the greatest challenges of the modern age. He attempts to answer the question of how having built up mountains of debt over decades, how will the world reduce them? Rising interest rates will be part of the answer and he points to the impact this will have on equity markets and assets values. Dublin is pitching to bring international broadcasters, including Disney Channel and Discovery, from London amid fears Brexit could affect their ability to work from the UK. The IDA and Broadcasting Authority of Ireland (BAI) are in talks with a number of companies about the relocation possibilities. Insurance broker Chill doubled operating profits to €2.6m in the year to April 2016, while turnover was up 16% to €21m. Bill McCabe has led a new €4.25m funding round for Psytech Digital, the Dublin start-up behind a psychics hotline and dating chat service for telecoms operators. Larea Fa, a residential property investment company established by two former stockbrokers Peter Horgan and Tim Cahill and with backing from international investment fund Broadhaven, has bought 25 Georgian houses in Dublin in less than a year for c€40m. Dublin has the potential to replace London as the capital of European fintech investment, according to Raj Ganguly, who co-founded B Capital Group with Facebook co-founder Eduardo Saverin. Former clients of Custom House Capital are facing a bill of up to €3.6m to recover what remains of their pensions and other funds almost six years after the collapse of the investment firm. Dublin-based coal marketing company CMC Coal Marketing Company reported profits of €50m last year. The company is jointly owned by mining giants Glencore, Anglo American and BHP Billiton. Breon Corcoran, the chief executive of Paddy Power Betfair, has been awarded 27.8k shares in the company, according to recent stock exchange filings, the shares are worth €2.8m. Profitero, a tech company founded by eastern European entrepreneurs who settled in Dublin, lost €5m in 2015, up from €1m the previous year. The online insights and ecommerce intelligence business was backed by Polaris Ventures in 2015. Pre-tax profits at Aran Candy, the company behind the Jelly Bean Factory brand, were up by €1.3m to €3.9m in 2015. Swedish confectionary company Cloetta completed a deal to buy the company for €26m at the end of 2016. Nick Webb’s inside track: - Dermot Desmond’s son, Ross Desmond, has teamed up with Dublin-born financier Tom O’Mahony and his SW3 Capital, and London-based deal maker James Byrne to develop a property in Dun Laoighaire. The trio plan to knock together two period office blocks in Dun Laoighaire and turn them into 13 apartments, which will come with a car lift. - Isle of Man – based pharma billionaire Lorin Johnson has just joined the board of Ivan Coulter’s Sigmoid Pharma. Johnson was the founder of Salix Pharmaceuticals, which was sold to Valeant for €11bn in 2015. - Christian Stokes, one of the Stokes twins behind the Residence and Bang venues which they lost control of post-boom, has been appointed European sales director of Surf Air, the so-called Netflix of private jet travel. - Central Bank of Ireland governor Philip Lane is clamping down on financial services being sold into Ireland from within the EU. The business interview this week is with Elizabeth Crabhill, chief executive of CIE Tours International. Twitter @RenatusCapital tweets this week: 5.3% - The growth in government spending in 2016, faster than the overall economy which grew at 5.2%, according to @CSOIreland. 14.2% - Proportion of non-performing loans held by Irish banks in Sept'16, well above the EU average of 5.4%, according to @EU_Commission. 3% - The rise in private consumption, according to Minister for Finance Michael Noonan. @IrishTimesBiz 5.2% - The growth in Irish GDP in 2016, the strongest in the European Union, according to @CSOIreland. @IndoBusiness 2% - The projected growth in the British economy this year, according to @OBR_UK, up from its original projection of 1.4%. @IrishTimesBiz €52bn - The amount of Ireland's sovereign debt that must be either repaid or refinanced by 2020, according to @NTMA_IE. @IndoBusiness 77.9% - Ireland's current debt-to-GDP ratio, a decline from its peak of 125% in June 2013, according to @business. @IrishTimesBiz 56% - The percentage of Irish people who save less than €300 a month, according to @bankofireland and @REDCResearch. @IndoBusiness 82.5% - The occupancy rate of hotels in Dublin last year, the highest in the EU, according to @PwCIreland. @IrishTimesBiz 5% - The projected rise in house prices over the next 12 to 18 months, according to @MoodysInvSvc. @examinerbiz 15% - The increase in the average daily stay rate for hotels in Dublin last year, according to @PwCIreland. @IrishTimesBiz

Mark Flood | Director | Renatus Capital Partners T: +35315549269 M: +353868392688 63 Mount Street Lower | Dublin 2 Renatus place €1-3m in cash generative companies with growth potential.

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