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Sunday paper overview from Valero Financial

Sunday Indo
Bernard Byrne, current Director of Retail and Business banking in AIB is apparently leading the race to succeed David Duffy. Mark Bourke (CFO) and Fergus Murphy (Director of Corporate and institutional banking) are other suggested replacements.

Ciaran Murray, CEO of pharmaceutical researcher ICON was the highest paid CEO, taking in €11.7m last year trumping Owen Killian who earned €5.8m. Murray has earned €27m since he has become Chief Executive.

Former Taxback founder Terry Clune is looking at raising a fund from the diaspora to provide loans to businesses in Ireland creating employment initially in the hotel industry. He is appointing John Bruton to the board. I’m not convinced that more lending products is what the country needs.

Shane Ross has a go at Enda Kenny/Michael Noonan for being inconsistent at the European table. We showed no remorse for Greece consistent with Germany’s stance. Then two weeks later we voted to allow the French some grace with regard to them breaching their deficit rules for the 14th time in 19 years. Ross claims that they will be looking for concessions ahead of the election with regard to healthcare/hospitals/social welfare and want to keep all the big boys onside.

Merrion Stockbrokers are being sued in relation to property investment schemes that went wrong in Florida, UK and Poland. There are very few investment firms who ran syndicates between ‘05-‘07 not subject to some legal action.

TV3 who were forced to up their in-house production game with UTV taking some of their blockbuster shows look set to do a deal with Sky to distribute their shows internationally which would be a big win for them.

Cathal Jackson owned Coppers Face Jacks is sitting on €46.3m of cash. He owns the building. A great example of somebody who never expanded beyond his core cash-cow and just kept milking the same cow over the past 19 years.

Richard Curran asks the question why staff numbers at Permanent TSB have increased from 1,900 in 2012 to 2,300 despite the firm only having 11% of new lending numbers. The Times highlight that they have big ambitions in the personal loan/credit card SME space.

There is a good interview with Michael Carey having made his fortune selling Jacobs Fruitfuild to Valeo he now sits on boards of Bord Bia, Grow Dublin Tourism Alliance, Drury Porter Novelli, the Soul of Haiti, Traidlinks and Smurfit Business School. His main interest is the “Company of food” he invests in food companies that he can add value and drive on. He points out that 39 companies sell more food than Ireland as a country does. His story is amazing where he parted ways with Kellogs where he was MD for Ireland/UK and partnered with Michael Tunney and David Andrews of Lioncourt Capital to buy the Irish Nestle business and bolted on Jacobs en route to their successful 2011 exit.

Neil Hughes, Managing Partner Hughes Blake highlights how history shows a high level of corporate failures at this stage where the economy is recovering and companies are ramping up operations. He gives a good analogy that when everyone is jogging someone with a poor muscle can keep up but when the sprint begins the legs might go. He says some companies may need an examinership to rebuild their balance sheet before they drive on with expansion. This would involve writing down some debts and taking in some equity.

Adrian Turner is stepping down as MD of Crownway, John Gallagher’s company. Gallagher famously sold up swathes of property at the peak in ’06/’07. Turner who was with him around that time says “I’ve never seen all three global asset classes- equities, properties and bonds – simultaneously at such elevated valuations. Individually, there current valuation levels would rank with the largest bubbles seen in the last century. We could be watching the last great asset bubble of our lifetimes being blown in front of us – especially in real terms.”

Howard Millar is rumoured to be a possible chairman of BDO would be a big coup for BDO.

Nick Corcoran and Nigel McDermott’s ISIF supported Carlyle/Cardinal fund have financed the €50m buyout of Carroll Meats. This follows the buyout of Payzone and Lily O’Briens. According to Indo they intend to use Carrol Meats as a platform for other acquisitions in the prepared meats/ready meal space.

Confirmation of last year’s 4.8% GDP growth figure and expectation of 3.9% this year are all positive. GDP looks set to exceed the pre-crash peak of €185m this year.

Dublin financier Paul Coulson’s packaging business Ardagh is planning to float its metal containers business. The plan could see the unit valued at €2bn. Coulson owns a third.

Sunday Times
JD Wetherspoons is planning to sell Lavazza filter coffee for €1 and full Irish Breakfast for €4.95 in its Irish branches. This is consistent with a groupwide strategy. It has a pub in Blackrock, Dun Loaighre, is opening in Blanchardstown in June and has bought properties in Cork, Waterford and Dublin. Tim Martin the CEO said that anything they bid on they stretch out the boat on price but still fall short.

BOI have profited significantly through holding onto New Ireland despite the EC nearly forcing a sale in 2011. It managed to stay partly in the game with ICS through funding the Dilosk acquisition of the same book.
Fred Krehbiel has pumped a further €2.5m into the magnificent Ballyfin. Krehbiel is estimated to already have spent €30m transforming the house and estate. Forbes estimate he is worth $1.7bn.
Capvest, led by Cavan Seamus Fitzpatrick is vying to buy Balconi, an Italian sweet snack business for €230m.

Crekav, headed by Arklow builder Greg Kavangh, has bought a 2.8 acre site in Dundrum for €7m from Hibernia REIT. Hibernia paid €67m for a portfolio from Ulster Bank that included this site. Site costs will stand at €160k per site. Crekav have also bought the former Nokia tissue factory in Finglas for €3.5m They have also bought a small industrial site on the Naas road. M&G are backing Kavanagh. The Business Post has a profile on Kavanagh.

The Wright Bar Group has landed a contract to operate a new bar and restaurant at the revamped T1.

The value of NTR’s US holding is up 27% in one year on currency basis alone.
Liberty paid $73m for Norther Irish broker Hughes Insurance last year. Hughes has 20% of motor insurance market in the north.

Tom O’Gorman bought the Clybaun hotel in Galway for €3m and expects to spend €1m refurbishing. He claims it would take €17m to put the same hotel there today and intends to buy more leisure assets.He already has Kilcooley Abbey in Tipperary and Blarney Golf resort in Cork. He made his fortune selling Cove Energy in 2012. Michael Hogan and Jonathan O’Connor are coinvestors and promoters of the project.
Grant Thornton made a bet that the Personal Insolvency Legislation would increase the amount of PIPS but the company it set up to service has lost money as the legislation is not being used as much as expected since enacted.

For the third week in a row there is mention of the review taking place in Ladbrokes Ireland. They are looking at 46 loss making stores from an estate of 196. Examinership is mentioned again but I repeat what I said in previous weeks that with the majority of leases understood to have the Ladbrokes plc covenant this is unlikely to be a real option. Ladbrokes as a group is under pressure with profits of £14m from digital compared to €120m in Paddy Power.

There is a very interesting interview with Larry Murrin who started with a café in St. Stephen’s Green and ended up partnering with Dan Browne and the Queally brothers to grow Dawn Farm Foods into a business with turnover near €400m.

Sunday Business Post
The Business Post have seen a report by PWC in November 2008 that suggested that the hole in banks was €10.6 billion. The total ended up €64 billion. Pwc relied on the banks for the information and Brian Cowen relied on this report for decisions made at the time. The top 22 developers had an €8.8bn exposure on development land and €25.5bn in total.

In order to overcome local opposition to Wind Farms, Bord na Mona is considering doing a partnership with local communities where local communities would profit from the ventures also. If Ireland fails to generate 16% of its power from renewable sources by 2020 it could be in trouble. Current projections estimate we could miss the target by 3-4% and that could cost us €500m a year.

There is plenty of Commentary on the Renua party launch.

Lone Star are expected to gradually sell down their property holdings. They sold a Dublin office pool to Starwood for €400m last week.

Tony O’Connor, senior bond trader in Davys, is the third man involved in the trade of a bond with Tom Browne (Le Bruin) and Patrick Kearney, a maple 10 developer. The bond was bought for €2m from Carval, sold for €6m and now worth c.€27m as mentioned last week.

Ulster Bank is working on plans to sell off hundreds of personal guarantees given by property investors during the boom.

Rohan builders are actively looking for sites and possible JVs to in order to scale its residential operation. The company has €145m of assets on its balance sheet with almost no debt.

Dalata now have 46 hotel and 7,400 bedrooms across Ireland and Britain. According to the Indo, Dalata staff are expected to get a 2-3% pay rise. Dalata have spent nearly all their pot and seem happy to hold now. It will be interesting to see if any management sell stock later this week as their lock-in year comes to an end. Shares are up 50% since IPO.
Turnover at Dublin Baking firm, Broderick’s is set to rise to €9 million this year from €6m.
“Bookings at a travel company that offers helicopter transfers, private jet pick-ups and luxury concierge services to high-spending visitors to Ireland are up 25 per cent on last year.”
Turnover at Dublin Baking firm, Broderick’s is set to rise to €9 million this year from €6m.
“Bookings at a travel company that offers helicopter transfers, private jet pick-ups and luxury concierge services to high-spending visitors to Ireland are up 25 per cent on last year.”

With the Euro at $1.06 and 71p sterling exporters are signing but fashion retailers and oil importers are not in a good place. The article on Business Post gives more specifics of who specifically will benefit.
Irish private equity house Kish Capital is the buyer behind one of Dublin city’s most enduringly popular bars, Thomas Read on Dame Street.
“Kish Capital, where the partners are John Bohill, Cathal Sheehy and Dan Ennis, a former corporate finance head of Merrion Capital, closed the deal on the former Hugh O’Regan-owned pub and the ten apartments above it for over €2.5 million some time back, on the quiet.”

The Business Post rightly applauds the minister for all but saying that the USC discrimination against self-employed workers will be addressed. in the next budget They also call for the punitive 33% CGT ASAP echoing the findings of the Government’s forum on Entrepreneurship chaired by entrepreneur and investor Sean O’Sullivan.