Business Irish

Tuesday 12 December 2017

THE Punt: Exploring new finance avenues

THE Punt always likes to hear tails of the diaspora doing well, especially when it's the younger generation that are taking the lead.

James McBennet, pictured, is one such entrepreneur. The Dublin native, who is now based in London, has seen his furniture startup named "startup of the week" by tech bible 'Wired' magazine.

Fabsie is a company that could not have existed even a couple of years ago.

The site allows designers to upload their 3D designs of ready-to-assemble furniture to the website and then customers can choose and personalise their favourites. These can then be built to order. Like any middleman, Fabsie takes a cut on all sales.

Avoiding such buzzwords as "cloud computing" and "big data", Fabsie marries an old, traditional business – furniture design – with the slick world of the web and social networking.

Adding to the modern edge, the company has been financed through crowd-funding via Kickstarter, a site that allows many people to make small contributions to support a company. The benefit of this, of course, is that Mr McBennet hasn't had to hand over, say, 30pc of his company, to a venture capitalist.

Given the success of his Kickstarter project, its no surprise he recommends it. Asked for advice he'd give entrepreneurs, McBennet told 'Wired': "I think entrepreneurs should avoid early stage investors as long as possible and take advantage of alternative methods that find customers directly." Good advice.


Mueller's pay is well deserved

AER Lingus boss Christoph Mueller is flying all the way to the bank.

The airline's latest annual report shows that the chief executive made a tidy pay packet of €1.29m last year – up from the not-inconsiderable €1.24m he made the previous year.

Mr Mueller will no doubt point out that his basic salary was voluntarily frozen at €475,000, which is the figure he was hired on in 2009.

He will also no doubt take some solace in the fact that he has seen the airline through the turbulence of the losses incurred in 2008 and 2009, and returned it to profitability. The carrier recorded an operating profit, before exceptional items, of €69.1m for 2012, compared with a profit of €49.1m for the previous year.

But while Aer Lingus is no longer state-controlled, the generous pay packet may well prove to be controversial considering the Government still holds a 25pc stake in the carrier.

The Punt doesn't agree. While Mr Mueller's pay packet is large, he has turned the company around and given it a sense of purpose that was lacking for years, if not decades.

Sometimes, just sometimes, the so-called fat cats are worth every cent of what they earn. This is one of those cases.


Bouncing back, brick by brick

The fortunes made and lost in the building trade over the past 15 years are the stuff of cautionary tales rather than business legends.

It's refreshing then to see that one of the country's oldest building firms, John Sisk & Sons, is weathering the economic storm.

Sisk says it is now back in profit after booking huge losses in 2011 on an ill-fated expansion into Poland.

The family-owned Cork-based business dates back to the 1850s.

That's long enough to squirrel away substantial reserves, which we now learn have been drawn on to support the business through the current crisis – just as it came through previous ones, not least the Great Depression.

Still it's never too late to learn lessons and it is fair to say that Sisk won't be going back into Poland any time soon.

The business is still working on big projects here, but its international profile is now limited to the UK and a small presence in the United Arab Emirates.

It seems for all the push from Government – and, let's face it, the media – for Irish firms to expand into ever more exotic markets, the real pot of gold is still the one just over the water.

The laws there are clear, we share a language and the business culture is similar to our own.

Even the currently depressed construction market in the UK is worth €100bn compared to our €10bn.

That means plenty of room for growth for Irish firms without the risks or hassle associated with more far-flung ventures.

Irish Independent

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