Synopsis of Sunday business pages

Sunday Business Post “The Commission of Investigation into IBRC, which is investigating the sale of Siteserv to tycoon Denis O’Brien and other issues, has warned the politician Catherine Murphy that it may try to compel her to reveal her sources.” There is a review of the c. €5bn of properties recorded as sold on the Property Price Register in the first half of this year. Highlights included: - 50% of total transactions occurred in Dublin - 230 €1m+ transactions occurred, compared to 193 in same period last year - Patrick Doran’s purchase of 11 Shrewsbury Road for €8.45m was the highest paid - Only one Dartry home features at €3.5m Agents say that a lack of bridging finance is holding back the top end of the market a little. DIY chain B&Q has said that welfare rates for those out of work gives no incentive for those people to work. Retail Ireland has lobbied on the same subject and suggest that it should be easier for people to come off for a few months at seasonal peaks and then go back on the register. B&Q have also lobbied to get VAT reduced from 23% to 20%. Fianna Fáil is pushing for increases in the state pension and other social welfare payments in this year’s budget. The government needs FF’s support to get the budget through. Legislation is likely to be rushed through to allow for the rolling-over of five-year planning permissions instead of forcing developers and landowners to reapply each time. Martin Keane, owner of the Oliver St John Gogarty, is interviewed in the paper. He has been sitting on the lease to the Iveagh Markets building and says that he will need some support from the state in order to make development of the site commercially viable. The Abu Dhabi Investment Authority is said to be exploring the possibility of investing with Johnny Ronan in the four-acre site in front of AIB Bank Centre which Ronan bought with backing from the WLR Cardinal fund and Jefferies LoanCore. The most recent polls are not as good as Fine Gael may have hoped with new leader Leo Varadkar: - Fine Gael 27% (minus 2% in May) - Fianna Fáil 24% (+3%) - Sinn Féin 18% (+3%) - Independents 8% (minus 6%) - Labour 6% (-) - Others (incl. Ind. Alliance) 17% (+2%) Comments made by head of pilots association IALPA in a radio interview in 2012 about Ryanair’s safety policy is still subject to legal action from Ryanair. Top Oil is reported to be buying two forecourts in Cork from Kec Retailing. Emma and Kieran Cotter are shareholders of Kec. There are revelations about emails relating to the Rio ticket scandal sent by Pat Hickey. Primark’s launch into the US appears like an initial success. Ian Kehoe celebrates the success of an Irish plc taking on the US - it is normally a US plc coming to Ireland. The holding business, Associated British Foods, whose initial roots trace back to Mary Street, has climbed to the top of the FTSE 100. What Arthur Ryan, Breege O’Donoghue, Seamus Halford and Paddy Prior have achieved with the original backing of the Weston family is truly phenomenal. The owners of the Cork Advertiser have taken out an ad putting the company up for sale. All three papers cover the purchase of Cork-based electronics manufacturing company Excelsys Technologies for €15.5m by Nasdaq-listed US firm Advanced Energy Industries in an all-cash deal. Gary Duffy, Frank and Seamus Devitt will be the biggest winners from the deal. The company’s chief executive Gary Duffy was the majority owner in the business after he led a management buyout of the business in 2015 which then valued the business at c. €10m. Devitts were the original owners, prior to the MBO in 2015. Pat Walsh’s Bluebay fund backed the deal at the time. Excelsys had sales of €10m last year. According to the Business Post, “Simulity Labs, an internet of things company co-founded by Dubliner Stephen Halpenny, has been sold to semiconductor firm ARM for £11.7m”. There are a lot of good noises about Irish start-up ChangeX which has developed a technology platform for donors to non-profits. Union Square, an early backer of Twitter, is very excited. Dermot Desmond; co-founder of Ben & Jerry’s, Jerry Greenfield; Ray Nolan and Jeff Lieberman of Insight Ventures are among the backers. The purchase of the D4 coffee kiosk has brought Starbucks a lot of publicity this week. Gillian Nellis writes how 76 stores in Ireland have been opened by brothers Colum and Ciaran Butler. Before Starbucks, the brothers had the TGI Friday’s franchise, bowling company Leisureplex and Outback Steakhouse restaurant in Britain. The SBP profiles two newly launched office investment properties for sale though Melford Property, which will appeal to many people looking for commercial property opportunities for their pensions. Irish Examiner owner Landmark Media has debts outstanding to AIB of €16.3m. “Mertonbury, part of Joseph Cunningham’s poultry empire, saw its turnover rise from €89.5m in 2015 to €100m in 2016.” Telecoms firm Welltel has acquired ATS. Welltel will be able to combine its cutting edge technology solutions with ATS's sizeable client base. John Hannon and John Lacy’s FinRes acted as corporate finance advisors to Welltel on the deal. BMS Finance and Capital Step provided financing for the transaction. The Sunday Independent also reports on Welltel’s acquisition of ATS. Róisín Burke profiles the players in the waste game in Ireland and says how the introduction of pay-by-weight has been kicked down the road by the government. City Bin’s Gene Browne says it is like Ryanair’s charges for baggage: it changes behaviour and is proven to reduce waste when people have to pay for what they throw out. The league table of the big Irish players reads as follows: Panda Waste - over 150k households. 90% owned by the Waters family. Greenstar - over 85k households. Panda acquired from Cerberus. Greyhound - 250k households (through council contract). Owned by Michael and Brian Buckley. AES - over 100k households. Majority-owned by Bord na Móna. City Bin - over 80k households. Strategic partner of Middle East firm Averda which owns 60% and founder Gene Brown is still a sizeable shareholder. Oxigen - over 70k households. Owned by Doyle family. Thorntons - over 60k households. Owned by Thornton family. Feargal Quinn writes on how there is hope for An Post to turn itself around and become a truly self-sufficient value-added entity under the leadership of David McRedmond. There is a profile on Oisin Fanning of San Leon Energy. There is a focus on managed service networks with special focus on Viatel. Róisín Burke writes how the Comer Brothers have plans to go up to 20 stories on the massive block of property they have beside Eyre Square in Galway. Francesca Comyn has a special report on the increase in repossessions. Sunday Independent Energy giant SSE, French broadband provider Cube, Australian Bank AMP and London investment manager Mayfair Capital have been shortlisted as buyers for Oak Hill’s 47% stake in Enet, an open access fibre and wireless provider. David McCourt, the Irish-American businessman, owns the remaining 53% through his Granahan McCourt Capital and is committed as a long-term investor in the company. Oak Hill’s stake is reported to be valued well in excess of the €110m invested in Enet since McCourt bought it in 2013. Athlone Extrusions, a plastics business led by James McGee, has been sold to Schweiter Technologies, a Switzerland-listed company, for €48m. The business manufactures plastic sheets that are used in vehicles, shower trays, bath panels, office equipment and furniture. IBI Corporate Finance advised on the transaction. In 2016, the business generated €62m in revenue. According to the Sunday Business Post, Barlo had bought the business prior to Sean Quinn’s plastics company buying Barlo. James McGee and other executives subsequently bought it out for a similar price to what it is being sold for today. It appears like the company got a debt writedown in recent years. In line with the departure of its managing director for Ireland, McDonald’s is scaling back its head office operations in Ireland with the business to be managed from the UK. Adrian Crean, the current managing director, is set to leave the business this month and won’t be replaced. There are 92 outlets in Ireland and the company made profits of €14m off of €85m in sales during 2015. Tom Parlon, the director general of the Construction Industry Federation, has warned that his members could resort to legal actions and take trade unions to courts in order to recover costs from the ongoing crane driver dispute. Richard Curran’s pieces this week: - Unlike many other EU countries, the demand for high-skilled jobs remains weak in Ireland. OECD figures show that the number of high-skilled jobs created between 2013 and 2016 wasn't significantly higher than between 2011 and 2013, meaning a large part of the job recovery has come from low and middle-skilled jobs. 34% of EU workers are either overqualified or underqualified for the jobs but in Ireland this figure is 44% and those who are overqualified take a “wage penalty” of earnings below what they are qualified to do. - Curran describes the latest delay to the National Broadband Scheme as “truly appalling” and says there is only one winner from the delay, Eir. While the rival bidders are being delayed, Eir continues to press on with its own fibre rollout to the more profitable rural areas, meaning that even if it doesn’t win the contract, it will have captured the more profitable homes anyway. Brian Carey in the Sunday Times also comments on the ongoing delays, noting that the process is down to three bidders: Eir, Enet and Siro, for two contracts. The reduction of the number of homes to be covered under the tender has resulted in Siro considering its position, potentially resulting in a two-way race for two contracts. Carey speculates that a successful result for Eir in the process could mean a possible IPO of the business. DesignPro, a Limerick-based company founded by Vincent McCormack and led by Paul Collins, is planning to create 50 new jobs after securing funding from the EU earlier this year to develop hydrokinetic turbines which are designed to generate power from the flow of a river. Declan Carlyle, the head of human resources at CIE, the state transport company, has warned trade unions that they will no longer be consulted on a rescue plan for the company’s troubled pension funds because of their attitude to talks. Carlyle also blames the recent pay rises for increasing the pressure on pensions. It is reported that the deficit in all CIE pension schemes was €288m. The Sunday Independent and Sunday Times report on Patrick O’Sullivan’s claims that Conroy Gold & Natural Resources is being run in the interests of its board and not its shareholders. O’Sullivan, the company’s largest shareholder with a 27% stake, has sought an EGM and will call for the resignation of six board members and the appointment of three new board members, including himself and two other UK-based industry experts, while the company’s founder, professor Richard Conroy, would remain as chairman. The move follows payments to the board for the seven years to May 2016 totalling €4.1m, which was an average of 56% of total operating expenses. Furthermore, O’Sullivan has said that there is “no discernible development plan to crystallise value from its potential assets”. San Leon Energy, the oil and gas explorer who received a conditional takeover offer from China Great United Petroleum valuing it between £305m - £347m, had its shares suspended from trading on Monday as the company failed to publish the financial statements before the end of June. San Leon is attributing the delay to the need to incorporate the consolidated financial statements of a company called Midwestern Leon Petroleum, which was used to hold its interest in an oil-producing asset in Nigeria. Group Eleven Resources, the Irish zinc explorer led by Bart Jaworski, is planning to float on the stock market later this year after agreeing to buy 60% of a prospect which covers areas of counties Longford and Meath from Canadian mining giant Teck, while a Chinese company owns the other 40%. Group Eleven raised €2.6m to finance the deal via private placement of new shares and Teck has also taken a stake in Group Eleven as part of the deal. This week’s focus piece is a guide to technology for small businesses. Dan O’Brien comments on Ireland’s lack of entrepreneurism when it comes to its ocean economy and compares Ireland’s ocean economy to that of the UK and Iceland. Ireland’s ocean economy contributes c. 1% to GDP while Iceland and the UK’s ocean economy contribute c. 10% and c. 4% to their respective GDPs. He says that there are three aspects of the ocean economy that offer good opportunities for those who want to build businesses: aquaculture, tourism and advanced marine technologies. This week’s interview is with Eleanor McEvoy, the chairwoman of the Irish Music Rights Organisation. Deals Of The Week: - ProU Yogurt, led by husband and wife team Michael and Jane Murphy, has signed a deal valued at c. €200k with SuperValu that will see its yoghurts stocked in SuperValu stores across Ireland. The Sunday Business Post also reports on the same. - O’Brien Fine Foods, the family-run food company that owns the Brady Family and Homebird brands, has invested €450k into its IT infrastructure in a deal with tech firm Novi. Samantha McCaughren’s Ergo Piece: - Developer and lawyer Noel Smyth has taken his next step at Arnotts department store on Henry Street by boarding up the so-called “Blue Building” for his future use. Smyth is reported to be busy with negotiations with prospective clients for the prime retail site with a sports retailer believed to be among the interested parties. - With difficult times ahead for the retail trade, Retail Excellence Ireland has bumped up Lorraine Higgins, the former senator and barrister, from head of public affairs to deputy chief executive. Sunday Times Sports Direct and Heatons boss Mike Ashley is reported to have held talks with Dunnes Stores management in recent weeks regarding the acquisition of up to seven of its stores. The UK retailer is targeting stores where Dunnes has another close by, including sites in Dublin, Cork and Waterford. IBRC has made a payment of $34m to the Russian group A1 to end their partnership in the recovery of assets that were owned by Sean Quinn’s family. IBRC engaged A1 in 2013 to help recover assets valued at c. $500m in Russia and the Ukraine. It is not reported how much, if any, of the assets have been recovered since 2013. Facebook is planning a second data centre in Co. Meath and has been making enquiries with local landowners about acquiring more land in the area. The social media giant began construction on a €200m data centre near Clonee, Co. Meath last year. Dublin jewellers BJ Fitzpatrick reported profits of almost €3m last year. The business owns 30 franchise locations for Pandora, as well as five franchise stores for Parfois, and has the distribution rights for watches from Hugo Boss, Lacoste, Tommy Hilfiger, Juicy Couture and Ferrari. It is run by John and Stephen Fitzpatrick. Brian Carey’s Agenda piece discusses David McRedmond’s rejuvenation of An Post. As part of the plans, McRedmond will split the post office network and mail delivery service into two separate companies. He is positioning An Post to be a real leader in the parcel delivery market and to ride the e-commerce growth wave. New services include next day delivery, delivery on Saturdays and access to addresses in the UK and US to allow Irish consumers to purchase from websites that do not offer delivery to Ireland. To offset the cost of these new services, a price increase for mail delivery has been introduced. The Sunday Independent report that An Post currently have a 25% share of the fast-growing parcel market and is aiming to grow this share to 35% by 2021 which will equate to divisional revenues of well over €200m. According to Euromonitor research, Irish people spend €553 each on online shopping, while UK people spend €1,011. An Post is taking the view that Irish patterns will follow those of the UK and further increase the demand for delivery services. There has been significant M&A activity in this space in recent months with MML acquiring a significant stake in Fastway and UPS acquiring Nightline. BDO Development Capital is reported to have followed its €2.4m investment last year in Perigord Premedia with a recent €3m investment. Perigord Premedia provides artwork and labelling outsource services and management solutions to the Life Science industries. Norwegian Air has invested €200m into its Irish subsidiary since November last year to help fund the setup of its transatlantic service from Cork. Tom Anderson, who sold his five Empire cinemas to Cineworld last year, has benefited from the UK cinema group’s rise in its share price. Anderson sold the cinemas for £94.5m, half in cash and half in shares to vest in five tranches over a 12-month period. Since its sale was announced, the share price of Cineworld has risen by 22%. Anderson has received three of his five share tranches to date, holding 5.2m shares worth an estimated £36.2m. Oaktree Capital Management, who is lining up a housebuilding IPO with housebuilder Bridgedale, is reported to have moved to purchase two residential development sites, the first on Shrewsbury in Ballsbridge with planning for seven large houses and the second in Blackrock with planning for 24 houses. Bacardi recently invested €4.9m in Teelings Whiskey, valuing the company at more than €60m. The investment came on the back of a deal agreed with Bacardi to distribute Teelings Whiskey in the US. Teelings is owned by Jack and Stephen Teeling, sons of John Teeling. NAMA is planning to build 360 apartments on a docklands site close to the Central Bank. The site was formerly owned by Liam Carroll, however it is now controlled by NAMA who has appointed a receiver over it. Following the sale of Grove Turkeys last year, its former owners Thomas O’Driscoll, Brendan Maguire and Stephen O’Halloran are set to share in a €15m profit from the solvent liquidation of their holding company. The trio completed a management buyout (MBO) of the business from Kerry Group in 2006. Comreg (the communications regulator) has filed court proceedings against Eir following claimed breaches by Eir of rules governing how it opens its networks to other rivals and Eir’s unwillingness to pay fines imposed for the same. A settlement has been agreed between Aventas Manufacturing Group, which managed the break-up of the former Quinn Manufacturing Group, and RHP Bidco, the company set up by John Mullins to acquire Quinn’s radiator business, over a deferred consideration payment relating to the acquisition of the radiator business by RHP. The radiator business has since re-branded as QRL Radiator Group. The Lir, a dramatic art academy set up by Danielle Ryan, daughter of Ryanair co-founder Cathal Ryan, is launching a new strategic five-year plan for the academy which will see it launch new courses and enter into a new partnership with the Royal Academy of Dramatic Art (Rada) in London. The Lir had income of €2m in 2016 and reported a small profit for the year. The Latvian bank Rietumu Banka, in which Dermot Desmond is a 33% shareholder, has been fined €80m by a Paris court for its part in a tax avoidance scheme. The court “convicted the Latvian lender of money laundering and fined it €80m for facilitating a scam for “democratise” tax evasion among ordinary taxpayers and small businesses in France”. The paper carries a full-page piece of NAMA’s sale of Project Tolka, a collection of loans relating to Paddy Kelly, John Flynn and the McCormack family, which was bought by Colony Capital for €455m. NAMA will be answering questions before the Oireachtas finance committee on the sales process this week, which TD Mick Wallace claims was not an open process. Philip Connolly interviews Paul Quigley, co-founder and CEO of Newswhip. His company provides data and intelligence about how news stories spread, with clients including newsrooms such as BBC and Time Magazine and brands such as Walmart, Reebok and Mastercard. Sandra O’Connell has an interesting piece this week about the fresh perspective and value-add that a non-executive director can bring to a business. O’Connell speaks with a number of business owners who have taken non-execs onto their board and also non-exec directors who have joined boards. The right non-exec can bring a lot to a business; Stephen Cloonan, who recently joined Donnelly, the fruit and veg group, provides a good quote that businesses should seek out “someone you can trust, who has something to bring to the business and will challenge you”. Nick Webb’s Inside Track: - Longboat, a cloud-based platform for clinical drug trials set up by Gerard Ryan, has raised more than €3.2m in growth capital. Investors include Kieran Curran, who sold GenCell for $150m in 2014; Tom Howard, former Firecrest founder; Pegasus Capital and Davy Private Clients. - Dropbox is reported to be considering an IPO which could mean a large return for Bono and the Edge who invested as part of the company’s $250m series B fundraising in 2012 when the company was valued at $4bn. At its last fund raise in 2014, the US tech company was valued at $10bn. - Deidre Foley’s Natrium, the company used to acquire Clerys, has hired Noel Ford to run the company. Ford is former chief executive of Skandia Global Funds and is also involved in Governance Ireland. - Hugh McCutcheon, former head of corporate finance at Davy Stockbrokers, has been appointed as chairman of One 51 on an interim basis until a long term replacement can be found for retiring Denis Cregen. Twitter @RenatusCapital tweets this week: €80bn - The value of goods that the EU exports to Japan annually; in 2015, Ireland exported goods valued at €5.7bn to Japan. @IrishTimesBiz 20% - The projected fall in Irish income tax receipts if the universal social charge were to be abolished, according to the @EU_Commission. 0.9% - The projected growth in Northern Ireland's economy this year, well below the UK average, according to @PwCIreland. @IrishTimesBiz €17.7bn - Amount of capital inflow into the Irish commercial and residential property market in 2016, a rise of 12% vs 2015. @CushWakeIRL 6.3% - The unemployment rate in Ireland for the month of June, a nine-year low, according to @CSOIreland figures. @IrishTimesBiz €23.4bn - The government's tax take in the 6 months to June, 0.5% behind target. @IrishTimesBiz 13.4k - The number of cars imported from the UK so far this year, a year-on-year rise of 41%, according to @Motorcheck. @IrishTimesBiz 18 - The number of hotels sold in the first half of 2017, down from 29 in 2016; the total value of the transactions was €75m. @CBRE_Ireland c. 91k - The number of new car sales in the first half of this year, down 10% year-on-year. @IndoBusiness €32k - The rise in asking prices for newly listed homes in Dublin in the past 6 months, according to @MyHomeProperty. @IndoBusiness

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