Synopsis of Sunday business pages


Sunday Business Post Relations between Sean Quinn’s family and the special liquidators of IBRC seem to have deteriorated as the liquidators are reportedly looking to force bankruptcy on Quinn’s wife Patricia. A revenue probe has apparently yielded €61m from 275 medical consultants and a further 300 cases are still open. There is a short amnesty period whereby anyone who comes forward will pay reduced penalties. The probe is set to be extended to other professionals who are using corporate structures to shield income from income tax. Ian Kehoe and Jack Horgan-Jones have a detailed report on how the scheme works in the paper. David Power, one of the original founders of Paddy Power, is listed as one of the benefactors helping to finance the new €65m revamp of the Curragh racecourse. Other benefactors include the Aga Khan, Eva-Maria Bucher Haefner, Michael Tabor, Derrick Smith, John Magnier, JP McManus and the Maktoum family. The Sunday Times also report on Power’s investment. There is a chance that NAMA’s expected profit of €3bn plus could be used to replenish the government’s rainy-day fund. Century Homes founder Gerry McCaughey has started a new company developing “more efficient technology-based sustainable systems for the construction industry” in the US. The government is looking at ways it can give the IDA more compulsory purchase order power when looking for sites for big companies coming to Ireland. Crowdfunding sites Linked Finance and Grid Finance are calling for much more Government support via seeding certain pools and giving tax breaks similar to what is available in the UK. Webfactory, one of Ireland’s largest digital agencies, has come under the umbrella of the Dutch giant Dept, a network of digital agencies that operate across Europe and the US. The network has combined revenues of over €70m and staff of 600. It is not clear if it is a merger or acquisition. Andy O’Hara, CEO of drinks distributor Edward Dillon, claims that Champagne sales are a good barometer of the economic mood and, having fallen off a cliff, sales began to recover in 2015 and have continued since. Although, sales are still not close to the 2006 peak. Paddy Dunning is said to be working with Enda O’Coineen’s Kilcullen Kapital on acquiring the Button Factory music venue in Temple Bar from Dublin City Council. Charles Gallagher of Abbey, the listed Irish and UK house builder which reported a profit last year of €63.5m up from €61.5m, is interviewed in this week’s paper. He believes that until house prices rise, we will not see a lot of the supply unlocked in Ireland. Mayo Company Big Red Barn is reporting that a lot of young couples are buying its modular house solution for €25k-€30k as they save for a deposit. “Revive Active, the Galway-based health supplements manufacturer is planning to raise €1m for a US expansion.” Flender, the digital online peer-to-peer lender is about to have a £2m funding round. Original backers include Mark Roden from Ding and Philip Grant one of the FGS founders. Kevin Maughan’s Urban Volt has raised €1.5m from BMS finance. FinRes corporate finance arranged the deal. Ian Kehoe writes an article calling for NAMA to account for its actions in choking the supply of residential sites in the greater Dublin area. Particularly, the sale of land to funds which were never likely to develop the land. Brendan McDonagh, head of NAMA, was quoted during the week as saying: “There is no doubt that land hoarding is an issue. For any given site there is little disincentive to hoarding as long as the owner expects house prices to rise.” Ian Guider asks if Ireland will collect the €13bn from Apple that the European Commission ruled was owed to it in tax? Even if it is paid by Apple, it is likely to sit in an escrow account for a long time. Guider also writes about the current review of the Ireland Strategic Investment Fund (ISIF) by Paschal Donohoe. Donohoe said during the week that: “The government will also reassess the role of ISIF, which was established at a time when private finance was constrained and the banking system itself was constrained. We will be examining the role of that fund to look at choices that are available to use some of the funding that they manage to complement the decision that we are now making in relation to the rainy day fund.” ISIF has €2.6bn committed to various funds but not all spent yet, a further €6.6bn under its direct management and c. €13bn via its shares in AIB/BOI etc. The editorial in the Business Post also asks “Does ISIF have the right mandate?”. There is a three-page special on the rise of Jehovah Witnesses in Ireland. The CCPC has cleared the sale of Newsaccess to Kantar Media. Francesca Comyn has a special report on crowdfunding. Sunday Independent Cubic Telecom, an Irish mobile technology business which is developing technology that allows cars to communicate reliably with networks, is due to announce the closing of a new $40m funding round. This new funding round will value the business at $200m. The company’s customers include Tesla, Microsoft, Qualcomm, Vodafone, Audi, Volkswagen and AT&T. The business is led by CEO Barry Napier. Sunday Independent sources are blaming a slowdown in the processing of EIIS applications on the EU’s tax ruling over the Apple Case. Sources believe that Revenue is taking longer to process applications and is “reluctant to give interpretations of legislation in the wake of the Apple ruling”. Revenue denies this claim. In the period from January to May 25th, Revenue processed 73 applications, with 55 approvals and 18 rejections. Last year, 261 companies received approval from Revenue. US broker Bernstein has downgraded its rating on Ryanair to ‘sell’ and estimated the company’s share price could fall by up to 25%. The analyst report highlights “fundamental challenges” it believes Ryanair will face as the low-cost market nears saturation and the company will be forced into operating from higher-cost airports as it continues to grow. This will put pressure on the company’s cost structure and a “deterioration in Ryanair’s underlying economics”, which will not be appreciated by the market. UBS and Citigroup also downgraded the airline from a ‘buy’ rating to a ‘neutral’ rating. Decobake, the cake-making equipment business put into provisional liquidation after a court application from Dublin City Council over €102k of unpaid rates, will begin accepting trade orders again this week and may re-open its retail store on Dublin’s Bachelor’s Walk “in the near future” says provisional liquidator PKF O’Connor, Leddy & Holmes. Richard Curran’s piece: - Curran highlights the potential loss of revenue for the exchequer if the c. $1bn of tax losses accumulated by Shell from its Corrib gas field venture transfer to the Canadian pension fund that is acquiring the west coast gas field. The field is now generating revenues of c. $589m a year. The Sunday Times’ Brian Carey reports that the Canadian pension fund will now own a 43% stake in Ireland’s largest known gas field and that it also owns 75% of the national lottery. - New Minister for Finance Paschal Donohoe will have very little room to move when preparing next year’s budget. It is estimated that there will only be c. €300m available for tax cuts or higher spending unless headroom is increased by raising taxes in other places. - A possible source of a tiny increase in total tax take highlighted by Curran could be a rise in the tax on the betting industry in Ireland. Gambling is currently taxed at 1% of turnover, last year generating c. €50m. A recent report by economist Cormac McCarthy noted the option to double the rate to 2%. Curran also notes the option of having the punter share the tax burden. Irish health drink company Vit Hit has signed a new two-year US distribution agreement which it expects to be worth in excess of €17.5m over the next two years. The deal will see sales double from 18 million bottles this year to 36 million next year. CEO Ian O’Rourke said that the company is targeting 60 million of bottles sold per annum by 2019, a sharp increase from the 96,000 sold in 2007. Production issues globally have reduced the available supply and pushed up the prices of home insulation products by as much as 10% over recent months. The market developments have affected smaller construction companies most as the bigger players have locked in their own supply. Dublin-based Oasis Group, a records and information-management business, has acquired Federal Archive, a Kinsale-based document storage business. The Sunday Independent’s sources believe that Oasis has ebitda in excess of €10m and is one of the largest companies in its space in Europe. The business is owned by two US private equity firms, Housatonic Partners and Sverica International. Former NAMA portfolio manager Felix McKenna will take up the role as CEO of a new investment vehicle that will fund social and affordable rental accommodation. The new fund, Dad Property Fund, was established by Hibernia REIT founders Bill Nowlan and Frank Kenny. McKenna is reported to have played a pivotal role in NAMA’s “formulation of proposals for the delivery of social housing”. Liam Thomson will take up the role of CEO of Rupert Murdoch’s Wireless Radio Group in Ireland. Kate Hyde, the Cork-based founder of Henparty.ie, along with Julie Brien and Dr. Roisin Molloy, co-founders of Belfast-based medical-device business Trimedika, have been invited to attend Dell’s global Women’s Entrepreneur Network in San Francisco this week. It is the first time anyone from the island of Ireland has been invited to attend. Erris Resources, a London-based company, is looking to raise £5m with a listing on London’s AIM market to fund drilling for zinc in Sligo. EasyJet is making plans to open a new airlines base in Vienna to protect against any possible fallout to its European routes as a result of Brexit. Gavin McLoughlin has a full-page report on Providence Resources’ turnaround led by Tony O’Reilly Jr. From looking like it was on the cusp of going bust two years ago to now being “arguably the most exciting business in Ireland as it starts drilling off the west coast in search of oil”. This week’s interview is with Graham Ross, country manager of Lottoland, an online company which offers lotteries based on the winning numbers in other lotteries around the world. Sean Gallagher speaks with Paul Cunnane, founder of Westnet, a Mayo-based company which provides broadband services to businesses and homes across Mayo. Samantha McCaughren’s Ergo piece: - William Fry is set to lose three of its asset management and investment funds partners - Ian Dillon, Cormac Collins and Tara O’Reilly - to rival law firm Arthur Cox. - Kylemore Abbey will play host to an executive leadership training programme in September which is being run by US university Notre Dame. Neil Naughton, deputy chairman of Glen Dimplex Group, is a Notre Dame business school Advisory Council member. - Ikea representatives are reported to have met with Cork City Council earlier this year with a view to opening a new store in the Cork region. Sunday Times Drip feeding the sale of Bank of Ireland shares to the stock market over time is likely to prove more politically acceptable than disposing of the state's stake in large blocks, even though this might raise more money for the exchequer, according to the Department of Finance. Brian Carey's Agenda piece: - The imminent departure of Jerome Kennedy from the board of Independent News and Media “will leave just a pair of independent directors on the eight person board: Len O’Hagen and Alan Marshall”. Only 72 of the 4k houses offered by NAMA for social housing are currently vacant, despite being deemed unsuitable by local authorities. The agency offered almost 7k vacant houses and apartments owned by debtors and receivers to the Housing Agency in 2015, of which 2,768 were taken. The taxation of inheritance has been identified as a key project by the Department of Finance in advance of the budget in October. Other taxes include the treatment of share options and gains made by savers who put their money in investment funds. Cormac Lucey opines that having been at the top of politicians’ priorities for the past decade, austerity is fast falling out of fashion. Our new Taoiseach, Leo Varadkar, wants to boost infrastructure spending with his predecessor's rainy day fund. The three founders of Cairn Homes, the quoted builder that is buying part of the RTE site at Montrose in Dublin, will receive shares worth almost €55m this week under a long-term-incentive scheme. Michael Darcy, the financial services minister, has called on IDA Ireland to help steer new financial services jobs towards regional growth towns and cities across Ireland. The Wexford TD, who accused the IDA of starving his county of industrial investment earlier this year, was appointed junior minister at the Department of Finance last month. Arena Group, a marquees and seating business headed by Irishman Greg Lawless, has teed up blue-chip investors for its listing on the AIM in London next week. Miton Asset Management, whose funds are managed by small-cap specialist Gervais Williams, will be the biggest shareholder in Arena after the July 25th IPO, with a 12.7% stake. This week’s interview is with John O’Neill, the chief executive of Tickets.ie. Tickets.ie, Ireland's largest independent ticket company, is set to raise €3m from investors as it plans to launch a new service that will compete with Ticketmaster internationally. The Dublin-based company is contributing €1.5m of its own capital into a new project called SeatFair which is in development and will be trialled later this year. Solicitors have been warned to review their professional indemnity insurance cover after a Gibraltar based provider, Elite Insurance, stopped reviewing policies following intervention by British authorities in the British overseas territory. Lotus, an investment fund backed by an Israeli hedge fund manager, has stepped in to refinance a housing development in Limerick. Last April, WLR Cardinal Mezzanine Fund, an investment vehicle backed by the Ireland Strategic Investment Fund (ISIF), appointed a receiver to Genesis Homes (Mungret), which is developing homes in the city. The company behind GamerCon, a Dublin gaming convention that was marred by long queues and overcrowding, is going into liquidation. Banks embroiled in the tracker mortgage scandal have had to repay €2.8m in tax relief to Revenue as a result of overcharging their customers for more than a decade. Finance minister Paschal Donohoe has confirmed that Revenue is now pursuing the banks involved, although he has declined to identify them. LetsGetChecked, a Dublin company that sells health care test-kits online, has raised €1m seed funding from investors, including the Dublin-based investment group Elkstone. The chief executive of Nearform, a fast-growing Waterford technology company, is buying out other shareholders in the group in a deal worth €4.6m. The Broadcasting Authority of Ireland (BAI) has confirmed that it is in discussions with a number of British broadcasters about moving operations to Ireland post-Brexit. Staycity, an Irish aparthotel group, is forecasting a 19% jump in earnings to €8m this year as it opens new venues in the UK and continental Europe. Sales at the Northern Ireland operations of LifeStyle Sports grew by £1.76m to £7.2m last year, according to accounts just filed. Analysts at Davy have forecast a 13% upside on shares in DCC and have set an £80 price target for the diversified investment group. Pre-tax profits at insurance broker 123 .ie rose to €10.4m last year, from €9.8m in 2015. The directors of a property fund that was co-founded by financial adviser Eddie Hobbs have petitioned to wind up the company after it suffered heavy losses in the US. Nick Webb’s inside track: - Roisin Hogan, the former EY auditor who appeared on BBC’s the Apprentice three years ago, is experiencing success with her Hiro by Roisin noodle brand. Paddy Callaghan’s Nature's Best is a shareholder in the business. - Peter Musgrave, an extended family member of the Musgrave retail group, has just raised $50m in series B funding from A-list investors including Jack Ma’s Alibaba, Goldman Sachs, Novan Ventures and World Bank for his Hong Kong-based Moneyhero group, a financial products comparison company. Dalata will have to reach an agreement with 50 private investors and a bank-appointed receiver if the quoted hospitality group is to gain full control of the Clarion Liffey Valley hotel. In other news: There is a lot of coverage in the various weekend papers of the Bray Airshow which is taking place on the Saturday and Sunday of next weekend. The event, which is renowned as one of Europe’s best air displays, was recognised earlier this year as ‘Best Festival / Event Experience (large)’. Aircraft will include F-18 fighter jets from Spain, a Spitfire from the UK, parachute displays and acrobatic air displays. It is a super day out for the whole family. Twitter @RenatusCapital tweets this week: 0.4% - Year-on-year decline in Irish inflation for June; the biggest decline came from clothing and footwear which fell by 5.3%. @CSOIreland £4.4bn - The amount of tourism spending in the UK during the first quarter of 2017, a year-on-year increase of 15.6%. @examinerbiz 5% - The level below which unemployment is expected to fall next year, according to the Department of Finance. @IrishTimesBiz €300m - The scope for expenditure increases and tax cuts in next year's budget, according to the Minister for Finance. @IrishTimesBiz 2.1% - The year-on-year rise in UK retail sales for the second quarter of 2017, according to @the_brc. @IrishTimesBiz c. 12% - The year-on-year growth in house prices in the year-to-May, according to @CSOIreland. @IrishTimesBiz 1.6% - Year-on-year rise in Irish consumer spending; ecommerce spending rose by 7.2% and face-to-face expenditure fell by 1.2%. @VisaIreland c. 402k - Average market price paid by households for a dwelling in Dublin in the year-to-May; the national average was €249k. @CSOIreland. c. 87k - The number of new cars licensed in Ireland in the 6 months to June, a year-on-year decrease of 10.4%, according to @CSOIreland. 275% - The proportion of Irish government debt to revenue, well above the EU average of 165%, according to @NTMA_IE. @IrishTimesBiz c. €5bn - The value of total nationwide property sales in the 6 months to June; the Dublin market accounted for c. €2.5bn of these. 49.6% - The year-on-year increase in the number of used imported cars licenced in the year-to-May, according to @CSOIreland @IrishTimesBiz 3.5% - The projected growth rate in the Irish economy this year, according to @FitchRatings. @IrishTimesBiz


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