Saturday 17 November 2018

Nick Webb: Monex boss has Ireland's most hi-tech farm

Monex founder Frank Murphy on his farm at Glena South, Banteer, Co Cork. Photo: Don McMonagle
Monex founder Frank Murphy on his farm at Glena South, Banteer, Co Cork. Photo: Don McMonagle
Jim Brown

Nick Webb

Frank Murphy is one of Ireland's best-kept secrets. His Kerry-based Monex financial services group is worth close to €100m – and he owns 85 per cent of the fast-growing company.

I met Frank strolling back from Government Buildings last week as Monex announced a big deal with Hertz. He told me about his other great passion. Buying moo cows from Ryanair's Michael O'Leary, and developing what could be the most innovative and technologically advanced farms in Ireland.

Murphy's Glen South Farm in Banteer, Co Kerry, will have 400 to 500 seriously high-end cattle – including about 20 of O'Leary's highly rated Angus. With the big beef processors hammering the little guy on price, Murphy plans to go direct to the butchers and to high-end restaurants to sell his produce.

The farm, which he started running two years ago, is now a trial farm for farming machinery giant Lely, which has led the entrepreneur to pick up some incredibly clever and very shiny bits of kit. This includes a robotic feeder for the cows, complete with 3D cameras and a kitchen. Murphy is also the proud owner of the country's largest slurry pit – a cavernous concrete construct. He's already spent over €1.5m on the project.

The extremely tall entrepreneur has also being buying up land, as the farm grows to 250 prime Kerry acres. He's going to keep buying too but not at big, big prices. There's "no logic", he says, in buying farmland above €8,000 per acre.

Monex, which was being circled by buyers including Investcorp last year, is flying, according to Murphy. Sales are going to hit €85m on the back of the deals with Hertz and the expansion of ATM networks. It'll handle close to €23bn in transactions.

Monex has thrown off buckets of cash in recent years, which has put it on the radar of suitors. There should be no problems finding someone who wants to buy an... em... steak.

 

Ulster says yes to Twickenham

SO what do you do on the weekend before the future of your bank is decided? You go off to a corporate box in Twickenham to watch England squeak past Ireland in the Six Nations.

Ulster Bank boss Jim Brown was in the prawn sandwich section last weekend as the second photograph above shows.

While the bank has said that it remains committed to Ireland, it seems likely that jobs are at risk here. . . up to 1,000 of them, according to recent estimates. Savage amounts of rationalisation are coming down the road at the bank, which will almost certainly lead to more branch closures, internal cutbacks and other unpleasantness.

Boxes at Twickenham are really rather nice. They cost €56,000 plus VAT for the year. Ulster Bank parent RBS is, of course, a sponsor of the Six Nations, so there's a lot of backslapping and gladhanding to be done. "RBS has a corporate box," Brown told me last week. I asked Brown on Friday about the match and what kind of clients he brought? "I'm not going to comment on that," he spluttered.

Hopefully, it wasn't any builders or developers. Ulster Bank has now sucked up €17.4bn in funds from RBS since 2009 as bum property loans went horribly wrong.

Splurging money – especially taxpayer money – on fripperies is going to be rather difficult from now on. But last year RBS extended its sponsorship of the Six Nations last year and the deal now runs to 2017.

How this fits with RBS plans to hack billions of costs out of a bank that lost €10bn last year is anyone's guess. Ulster spends 64 per cent of what it brings in on running the business. Brown believes that should be "sub 50 per cent".

"In terms of the marketing supports, we need to focus it on the things where it generates the most returns," Brown (below) said. Sponsorship and hospitality is "under review". Yikes.

 

CRH boss hammers the old guard over buyout splurge . . . cringe

Wow. New CRH boss Albert Manifold really stuck it to the old guard at Ireland's most valuable company. It had to hurt.

CRH spent €24bn buying stuff over the last 12 years. About 10 per cent of that is duff and another 20 per cent is not exactly brilliant. The cement company is selling off 45 of its business units, having shipped a €755m hit on them already.

"The business we've identified for sale this morning, about 70 per cent were acquired within the period 2000 to 2006," Manifold told an analyst conference call last week.

Manifold explained that the whole premise of buying some of these businesses was flawed. "The trend for the investment – the original investment thesis no longer applied. Sometimes, we actually just invested in growth and forgot the core principle of CRH, which was we used to make businesses better.

"We put our hand up and say, yes, we made a mistake, but we've learned our lessons, and we will never again go down the road of buying market trends, buying market growth, or not understanding how we make businesses better.

The period pinpointed by Manifold for this acquisition binge coincided with the reign of Liam O'Mahony, who headed CRH from 2000 to 2008. The board of CRH, which nodded through these deals, was made up of some of the biggest names in Irish businesses at the time. The so-called Galacticos. CRH was chaired by former Bank of Ireland boss Pat Molloy, with board members including former Aer Lingus chief David Kennedy, ex Smurfit head Howard Kilroy, former C&C chairman Tony O'Brien, ex Accenture partner Terry Neil, National College of Ireland head Joyce O'Connor and former IDA chairman Kyran McGowan.

Former Dell boss Nicky Hartery joined the board in June 2004 – bang in the middle of these "mistakes". Hartery is still there. But now he is the chairman of CRH – and Manifold's boss. It should make for interesting board meetings.

 

'Simon Cowell' of Irish tech steps back at Balderton

THE Simon Cowell of the Irish technology sector is taking a step backwards. Barry Maloney, whose Benchmark and later Balderton Capital was the biggest single venture capital investor in Ireland, is hanging up his six-gun as a partner of the London-based firm.

Maloney's ability to spot tech winners at incredibly early stages saw Balderton get in at the ground floor at firms like Betfair, Bebo, The Hut and online lingerie group Figleaves.com. These were the tech equivalents of signing up One Direction or Girls Aloud before they even knew they could sing.

The former Esat Digifone boss was instrumental in the fund backing of the likes of Eric Mosely's Globoforce, Niall Norton's Openet and Kieran Guilfoyle's 3V. These punts have generated humongous returns, with exits for Globoforce and Openet looming.

Maloney said last week he had told the Balderton team that he wasn't going to be getting involved in VC's next big fund. But it's "business as usual" for the companies in which he has invested. He has 12 investments from the first four funds to manage so he "won't be going anywhere for a while".

Chelsea fan Maloney is staying on as an adviser to the Mayfair-based firm but while "nothing is finalised yet about the future", he's "looking at a few things".

The loss of a champion for Irish companies in one of the most successful and high-profile European venture capital groups is not good news.

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