Tuesday 21 November 2017

The Punt - Food firms are firm friends

Patrick Coveney, Group CEO, Greencore Group
Patrick Coveney, Group CEO, Greencore Group

GLANBIA and Greencore are two of Ireland's best known food companies, and it seems clear the two firms are great admirers of each other's methods.

Former Glanbia managing director Ned Sullivan took a seat on the board at Greencore for several years until his retirement, and it wouldn't be much of a stretch to say that his replacement at Glanbia, John Moloney, is serving as his replacement at Greencore. Mr Moloney became a director of Greencore in February, five months after he retired from the top job at Glanbia.

Now, Greencore chief executive Patrick Coveney attended his first Glanbia AGM yesterday and he will formally take his seat as a non-exec at the next board meeting. It's an intriguing appointment. Glanbia's non-execs have a history of being in semi-retirement – certainly they haven't been leading hard charging FTSE 250 companies at the same time.

We are a big admirer of Mr Coveney but we wonder how he'll find the time to give the Glanbia gig his all. Current Glanbia boss Siobhan Talbot, though, has no doubt he'll make a worthwhile contribution.

Notably Mr Coveney is very experienced at moving company listings from Dublin to London. Might that expertise come in handy at Glanbia? It's unlikely for now, but a welcome talent just in case.

How about building here?

The big push from Government to make house-building more attractive for struggling Irish developers has us wondering why so few outsiders ever think about building here.

After all, Ireland is a small, open trading economy, and an attractive destination for international capital.

Not just that but one with pent-up demand for as many as 20,000 new homes a year and no end of banks and bust builders looking to sell land.

That sounds like exactly the kind of prospect that would have the likes of UK housebuilders Taylor Wimpey and Barrett Developments chomping at the bit to get involved.

Surely big firms capable of building profitably in markets as diverse as Fife in Scotland and London would be capable of turning a book in post-crash Ireland? The Punt wonders if, before we go down the road of subsiding builders, it might be cheaper for the Government to spend a few bob escorting the likes of Taylor Wimpey ceo Pete Redfern, or Barrett Developments' Mark Clare around Irish sites, to show them the lay of the land, if you like. It worked with the IDA and tech firms.

Unless of course there's something we're missing. Some unique aspect to the building sector here.

Trade secrets about the perfect roof pitch to cope with Irish rain perhaps?

TVC's Reihill is on the fence

TVC chairman and fuel merchant heir Shane Reihill is sitting firmly on the fence. At a media briefing yesterday, he made it clear that one of the main reasons TVC is shutting up shop is because there just aren't any companies suitable for investment in Ireland, and too many investors – many of them state-backed – are chasing too few deals.

But he refused to criticise the Government – despite the fact that his comments suggest government-backed funds are chasing out private investors. The problem was a wider issue, Mr Reihill said, pointing to low interest rates and a lack of corporate restructuring across Europe.

Still, we can't blame him for a bit of indecisiveness. TVC's proposal to distribute more than 90pc of its value to shareholders should mean a pay-off in the tens of millions for Mr Reihill, who owns about 30pc of the holding company.

We wonder what he'll do with the proceeds – could property be an option? We've long been a fan of TVC's investment strategy, which rules out property and biotechnology companies – this country needs financiers interested in something other than bricks and mortar. But the lure of a market where Dublin rents soared 14pc in 12 months must be hard to resist.

Irish Independent

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