Synopsis of Sunday business pages
Sunday Business Post The European Competition Commission is investigating the 200-acre purchase of a Coillte site by Apple to ensure it did not constitute state aid. Leo Varadkar is set to become the next Taoiseach. If Fine Gael get a bounce in the polls, he might call a general election even though he said he does not favour a quick election. It's expected that Michael Noonan's last act before retiring as finance minister will be to launch an intention to float document in relation to AIB, although it is likely to be delayed to avoid a clash with the British general elections in June. Salesforce is planning to double its workforce in Dublin to 2,000. It is looking for a new location to house the new staff and consolidate its existing staff who are spread between Sandyford and Leopardstown. Facebook and JP Morgan are both set to hire 1k each. Ian Guider has a special in the Business Post tracking those looking for homes post-Brexit and where they are going. A record rental agreement has been achieved by the Comer brothers who have let part of the Dublin 4 site that was the old veterinary college for €70/sq ft to aviation leasing giant Avolon. Another aviation company, Aercap, held the previous record at €60/sq ft for Denis O'Brien's building on the corner of St. Stephen's Green. The veterinary college site was bought for €22.5m at the bottom, having traded at €171.5m at the peak of the boom. One51 is looking at a flotation in the second half of 2018, possibly in Toronto or Dublin. Dermot Desmond last week sold his 25% stake to Canadian pension firm Caisse de Dépót et Placement Québec. It is understood that it paid a significant premium to the grey market share price and Desmond is reported to have made in the region of €40m. On Friday it announced a deal to buy US Macro Plastics for $150m and was advised by Deloitte corporate finance. Brian Carey in the Sunday Times speculates if Desmond may be looking at an exit from Datalex next after Evercore was recently appointed to carry out a review of its strategic growth options. "Shares in Irish oil company San Leon, where Oisin Fanning is the chief executive, have dropped sharply in value this week after the company missed a court-ordered payment." Kevin Beary's court case against his former paymasters Dolmen is covered in the paper. The judge has asked Beary to put up security to cover fees of the other party in the event he loses the case. It is reported that chocolate maker Lily O'Briens is exploring its options on exit. IBI is understood to be advising the company. This was Carlyle Cardinal Ireland's first investment in 2014 and is a good example of how private equity can come in and make a good company even better, as they have driven it on and got a lot more listings for the company since acquisition; sales have gone from €21m when acquired to near €32m now. Carlyle Cardinal Ireland announced last week its eight investment with the acquisition of a majority stake in the 30-strong store Sam McCauley Chemists. The articles during the week revealed that Tony McEntee, a former CEO of Allcare Pharmacy Group and previously finance director of Lifestyle Sports, will join the company as CEO following the completion of the investment. McCauley is remaining as a shareholder and will stay on the board. Gerard Barry who founded Fintrax and received over €100m for himself and family, has launched a new mobile payments solution business called Priviti. Cyril McGuire, Richard Cullen, Peter O'Grady Walshe and Nick Furlong have emerged as backers of Wavebreak Media, one of the world's largest producers of stock images for companies like Getty and Shutterstock. It received a €900k cash injection to help fund current growth. The company has received €2m investment to date. According to the Business Post, "Limerick billionaire JP McManus will drop his legal effort to get back $5.2 million withheld in taxes after he won a multimillion-dollar game of backgammon”. Colette Sexton interviews Colm Lyon. Having netted a reported €92m from the sale of Realex, the company continues to process over one million payments a day for its retailer customers under new ownership. Lyon is now focusing on his new ventures, in particular Fire. Fire now has 1,100 business customers and 4,000 personal customers. Fire's website homepage describes the offering as "A digital account experience like no other. Fire changes the way businesses can open accounts, get access to payment services and create integrated solutions”. He has a very good part on his decision to leave secure employment in Ulster Bank: "The worst thing people can do is make no decision at all and then have regrets about it." There is an article that mentions ten fast growing fintech companies we should keep an eye on, including Plynk, Leveris, Treasury Delta, Cogni, Linked Finance, Flender, FundRecs, Deposify, Touchtech and Coindrum. Peer-to-peer lender Linked Finance has received the necessary FCA approvals to launch in Northern Ireland. CEO Niall Dorrian said it is a logical launchpad into the UK. The UK regulators have a much closer grip of the crowdfunding and crowdlending space and offer tax incentives for investment. It is currently not regulated in Ireland. Linked Finance employs 18 people and intends to lend €300m over the next three years on its platform. The Business Post feature next Friday's Ladies Day event in Leopardstown where there will be an evening of food, music and motivational speaking. Gold Cup winning trainer Jessica Harrington; presenter & founder of Grace Diamonds, Gráinne Seoige; comedian Aisling Bea; jockey Kate Harrington and business women Caroline Keeling and Linda Thomas have lent their support. It is in aid of Breast Cancer Ireland and includes a special Moet & Chandon pop-up bar, live jazz and afternoon tea to complement the evening's racing. More details are available on Leopardstown's website. "Key Capital, the Dublin finance house, is investing in a new $140m (€125m) fund that aims to back European enterprise software and cloud-computing companies." There is a short interview with Pat Whelan of craft meat retailer and wholesaler James Whelan Butchers and how he is enjoying life under Dunnes Stores ownership. Cork-based yogurt maker Glenilen has won a listing with Sainsbury’s which should be a huge boost to its bottom line. There is a full-page on the recent appointment of Francesca McDonagh as Richie Boucher's successor as chief executive of Bank of Ireland. Stephen Kinsella reports on the performance of the economy under Michael Noonan's stewardship as Minister for Finance. There is a five-page special on Enda Kenny. There is a focus on Cork commercial property; with rents less than half of Dublin’s and likely to become the second largest English speaking city in the EU post-Brexit, it is an interesting asset class. "Derry-based Global Equipment Spares (GES) will more than double its workforce over the next three years as part of a strategy to grow exports six-fold. With support from Invest NI, GES is investing €2.2m to upgrade its facility, purchase new machinery and create 61 jobs across a range of roles." Managing Partner of KPMG Shaun Murphy is interviewed in the Money Plus section. The Chinese owners of Fota Island are taking on Stephen Tenant of Grant Thornton. Tenant is trying to sell a lodge on the estate on behalf of Danske but the Fota Island owners claim they have pre-emption rights and should have first call on buying it before it is sold to the public. Sunday Independent The Sunday Independent understands that BDO is at an early stage in discussions to set up a successor fund to its Development Capital Fund. This current €75m fund, which invests in companies making €2m-€10m in profits, has had a number of recent high profile successful exits. These include Galway-based beauty products company Lifes2Good and software company Version 1. Other investments include cloud telephony company Blueface, security and surveillance company Netwatch, telecoms and utilities services business Obelisk and confectionary maker Broderick’s. Cerberus has appointed a receiver over Denizen, a company owned by the members of the Beatty family, including Walter Beatty Snr, who are one of Ireland’s wealthiest families. “Denizen took out a mortgage with Ulster Bank, giving the bank charge over land at Drogheda in Co Louth. The mortgage was subsequently sold by Ulster Bank to Cerberus." Ken Fennell of Deloitte was appointed as the receiver. Verona Murphy, president of the Irish Road Haulage Association, estimates that Brexit will cost the sector €180m in the first year alone. Brexit is a major challenge for the sector and is already having an impact due to the weakening of sterling versus the euro. Richard Curran’s pieces this week: - Curran discusses the appointment of Francesca McDonagh to succeed Richie Boucher as chief executive of Bank of Ireland in October. He highlights that although the bank is in a far better position than when Boucher took over in 2009, there are still several challenges facing it. Pre-tax profits fell 16% last year, partly due to weaker sterling; c.40% of the bank’s loan book is in the UK, meaning Brexit will clearly be an important issue to navigate. In addition, the Irish mortgage market sector, which will be a key source of growth for the company, was noted by Boucher himself to be “highly vulnerable” to an increase in interest rates. - Ryanair is trialling an option for customers to book connecting flights through its website. The trial will begin in Italy and may be the beginning of a significant new revenue stream for the company. Ryanair shares reached an all-time high of €17.22 last Monday. - Curran discusses issues raised by Fianna Fáil finance spokesman Michael McGrath during the week in relation to the lack of progress in resolving high motor insurance premiums. McGrath believes too many claims are being solved outside of court and in private, which he feels is leading to higher payouts; McGrath’s logic is that lack of certainty of what payouts will be in court is encouraging insurance companies to settle before it reaches that stage. He feels that greater certainty around payouts would reduce overall payouts and thus reduce premiums. SES-Imatog, a €400m valued French electronic shelf labelling business, has bought a majority stake in Cork entrepreneur Roy Horgan’s retail technology start-up MarketHub. MarketHub, whose backers include Tesco Ireland boss Tony Keohane and Enterprise Ireland, allows electronic shelf labels to combine with big data analytics in order to reduce waste and increase sales. The Sunday Independent has learned that executives form Chinese airline Hainan are due to hold talks in Dublin next month in relation to running twice-weekly direct flights between Dublin and Beijing. Tourism Ireland chief executive Niall Gibbons called for such a direct flight during the week, which he feels would be “transformational” in attracting more tourists from Asia. Hainan is part of the HNA Group which recently bought Irish aircraft lessor Avolon. Developer Michael O’Flynn feels it is highly unlikely that another stock market-listed builder such as Cairn Homes will emerge in Ireland. This follows comments from Cairn Homes CEO Michael Stanley during the week that his view was that there were not enough “capitalised – equity-led, not debt-led – scaled housebuilders”. O’Flynn warns that house prices may be heading for a “price bubble” due to lack of supply. Arena Capital Partners, a Dublin-based renewable energy firm, has launched a €5m ISEQ-listed investment bond to fund the acquisition of 30 wind turbines in the UK. The company develops renewable energy products, mainly in wind energy in Northern Ireland, the UK and Italy, and also invests in biomass and property. Dan White discusses C&C’s acquisition history and suggests it may be time for the company to pursue a different growth strategy. The company spent €553m on acquisitions between 2009 and 2013, over half of which has been written off. C&C also sold its spirits division, which included Tullamore Dew and Irish Mist, to Scottish distiller William Grant for €300m in 2010, with Tullamore Dew last year going on to become the second Irish whiskey brand to break the one million cases annual sales barrier. C&C results for the year to February 2017 reveal that sales have fallen by a third and profits have fallen by more than half over the last decade. The Business Post reports that C&C chief Stephen Glancey said it would be interested in acquiring craft beer brands if the right ones were for sale to bolster its current offerings. John Reynolds has an interview with Kildare native Richard Cregan, a former Aer Lingus technician turned Toyota Formula One manager, who now has a family-run events management and motorsport consultancy in Abu Dhabi. Seabrook Technology Group, an Irish-owned manufacturing software specialist, has announced a US channel partnership deal with Siemens PLM Software, which will allow Seabrook to offer Siemens PLM products to new clients in the US. Thermodial, a Dublin-based business specialising in heating, ventilation and energy services maintenance led by Turlough Kinane, has started a five-year programme to convert its 35-storng fleet to electric vehicles. Sean Gallagher’s interview this week is with Sonya Murphy-Lyons, founder of Terenure-based music school Mezzo Music Academy. Gavin McLoughlin notes in his Ergo section that Tullow Oil’s exploration director, Angus McCoss, has joined the board of Providence Resources. Sunday Times AIB will no longer accept mortgage applications from borrowers looking for exemptions from the Central Bank’s mortgage lending rules through subsidiary EBS or its mortgage broker arm Haven. The move is an attempt to ensure that the bank stays within the 20% per annum cap on mortgages outside of the Central Bank rules. Cairn Homes’ founders, Alan McIntosh, Michael Stanley and Kevin Stanley, look set to receive shares in the company worth c. €50m. The three founders have “founder shares” which entitle them to share in the increase in the value of the company if a hurdle rate is hit - if the value of the company rises by more than 12.5% in a financial year (year end 30 June) and remains at that level for more than 15 consecutive days, the three founders become entitled to 20% of the uplift. Blue Insurance has had a good year with revenues rising from €25m in 2015 to €33m in 2016 and had operating profits for 2016 of €3.1m. Two-thirds of the company’s revenue was generated in Ireland and a third in the UK. QRL Radiator Group, the former Quinn Radiators business which was bought by former Barlo Group CEO Tony Mullins in 2014, has merged with Welsh metal recycling business, 2iM. The company has reorganised its finances, raising £20m from the sale and leaseback of its radiator manufacturing facility in Wales and secured a new senior debt facility of £55m from HSBC. Brian Carey’s Agenda piece: - Carey on outgoing Minister of Finance Michael Noonan: “He was certain, decisive and consistent. He gave an aura of an elder statesman completely at ease within the corridors of power in Brussels, and a man relishing his role and handling it with aplomb. Finding a worthy successor with similar qualities will not be easy.” - Carey notes Kevin Toland’s appointment as the new CEO of Arytza and the tough job the DAA will have in replacing him. Rathmines Swan Centre owner, Sawbridge, received an €800,000 dividend last year. Sawbridge is run by Paul Anderson of Ward Anderson cinema group fame. John Teeling’s Clontarf Energy is back working with the new Ghanaian government to agree a revised work programme on its oil exploration activities in Ghana. Clontarf Energy owns 60% of the Ghana licence. Finance Ireland will begin offering mortgage products by the end of year. Ireland’s largest non-bank lender will be open to first-time buyers and existing mortgage holders and will lend in all parts of the country. Its route to market will be through mortgage brokers. Finance Ireland CEO Billy Kane has said that “our aim is to have a faster and more efficient service than existing lenders”. Permanent TSB has been forced to buy back some of the loans it sold off to investors after disputes with underlying borrowers in relation to interest-only periods on their loans remain unresolved. The loans were sold on the belief that there was a short-term interest-only period after which the loan would revert to capital and interest paydown. The borrowers dispute this and claim that they interest-only period is for the life of the loan. Top US executives of Coca-Cola, State Street, BlackRock and Bank of New York Mellon are lobbying the government over the potential negative consequences Brexit might bring, including the hard border and the possible effect on the trade in financial services. Brody Sweeney’s fast growing Camile Thai business recorded a more than trebling of profits in 2016 with profit of €573,000 recorded in 2016, up from €172,000 in 2015. The company, set up in 2010, currently operates from 15 locations and is continuing to expand. Broadhaven Credit Partners is to back house builder Regency in its acquisition of a majority interest in a number of residential development sites in Dublin. The sites are located in Hollystown, Rathfarnham and Portmarnock. Broadhaven is one of the most active alternative lenders operating in the Irish market, providing funding support to clients across various asset classes and sectors, including SME / corporate, commercial property and housebuilding. Northern Ireland hospitality entrepreneur Bill Wolsey has acquired the former Riverdance HQ on Capel St. in Dublin City Centre with the plan to convert the property, along with an adjacent property, into a 100-bed boutique hotel in the style of his Bullit hotel in Belfast. Publican Louis Fitzgerald is seeking planning permission for a 161-bed student accommodation complex adjacent to his Big Tree pub in Drumcondra. IBM chief executive Ginni Romertty met with Enda Kenny in Davos earlier this year to lobby him to maintain Ireland’s competitive corporation tax rate. Aimee Donnellan interviews Amanda Blanc, CEO of the insurance giant Axa UK and Ireland. There is a profile piece of the incoming Bank of Ireland CEO Francesca McDonagh. Sandra O’Connell speaks with John White, founder of propriety trading firm Positive Equity, in this week’s How I Made It. Gavin Daly has a full page on the rise and fall of Worldspreads. Nick Webb’s Inside Track: - Endeco, the smart energy company run by Michael Phelan, is to raise €4m to fund an expansion in the UK and US. This follows the almost €6m raised to date from investors which including Cairn Homes boss Michael Stanley and his brother and Tribal:VC boss Conor Stanley, former Spar retailer John Clohisey, Bloom VC boss Anthony Birmingham and Fergal Quinn’s family investment vehicle, Sencheer. - Eugene Murtagh’s son, Damien Murtagh, is raising €30,000 of funding through Kickstart to develop out the range of a hobby building he has designed. Damien Murtagh, an architect by trade, has developed a line of click together pieces to make 3D models of architectural projects called Arckit. It is currently stocked in Harrods, Barnes & Noble, Brown Thomas and the Smithsonian. The fundraising is also covered in the Sunday Indo. - KPMG is to step aside as auditor of the ESB next year, 90 years after first taking up the assignment. - The theatre company Collapsing Horse, which is supported by Frontline’s William McQuillan and Bunsen’s Tom Gleeson, will take over the running of Kilkenny’s Cats Laughs comedy festival. The festival is owned by Richard Cook and Father Ted star Pauline McLynn. - Supermac’s boss Pat McDonagh has invested €100,000 into Galway-based vitamin firm Revive Active. - Former Dragons’ Den investor Sarah Newman has set up a new business, Anascena, a recruitment business which places former military personnel into specialist jobs. Newman recently exited from bankruptcy in the UK. Twitter @RenatusCapital tweets this week: 7.1% and 4% - Year-on-year increase in the value and volume of retail sales for the month of April in Great Britain, according to @ONS. 50% - The percentage of Ireland's beef exports that go to the UK, equivalent to 270k tonnes. @IFAmedia @IrishTimesBiz 9.6% - The annual increase in the cost of buying a home in the year-to-March, according to @CSOIreland. @examinerbiz €7.4bn - Expected level of new mortgage lending in 2017, a year-on-year increase of 30%, according to Goodbody Stockbrokers. @IrishTimesBiz c. €5.2bn - Ireland's trade surplus for the month of March, the highest on record, according to the latest figures from @CSOIreland. 2% - Growth in @Entirl client company exports to the UK in 2016, a slowdown from the 12% growth experienced in 2015, according to @Entirl. c. €2.4k - The average construction costs per square metre in Dublin, which is set to grow by 8% in 2017, according to @turnertownsend. 0.9% - Amount residential property prices rose by in the first quarter of the year, the strongest first quarter gain in a decade. @DavyGroup 14.4% - Northern Ireland's town centre vacancy rate in April, well above the UK average of 9.3% and the highest in the UK. @IrishTimesBiz 14% - The year-on-year rise in the Bord Gáis Energy Index for the month of April; the index tracks oil, gas and electricity prices.