Wednesday 24 January 2018

Top of the pile or beginning to feel a pinch?

MAN FOR ALL SEASONS: Owen Killian of Aryzta – a quare name but great stuff, said the brokers we surveyed
MAN FOR ALL SEASONS: Owen Killian of Aryzta – a quare name but great stuff, said the brokers we surveyed

It’s back! The survey that Irish chief executives dread the most. The annual Sunday Independent analysts’ poll reveals which chief executives are delivering the goods, and which ones are pups. More than 30 top analysts covering the main Irish companies in both Dublin and London have delivered their verdict on some of the biggest names in Irish business. Will their reputations be punctured? Nick Webb reveals all

Gene Murtagh

HE was the best chief executive in 2006 and the best young executive last year.

Kingspan's share price may have crashed over 75 per cent in the last 12 months but the investment community still believes that Gene Murtagh JR is the best young executive at any of the stock market quoted companies. Young? He's nearly 38!

Kingspan had a brilliant year on the awards circuit, being named Britain's 'most admired building materials company' last month, but on the markets things were less rosy. Operating profits are set to fall by a third, a €25m restructuring programme was launched, there was also a brief share buy-back scheme. The year was topped by a cash deal to buy US material firm Metecno. Crucially, Kingspan was able to get a debt refinancing scheme away when many other firms failed.

Paddy Power's Patrick Kennedy, another spring chicken at 39, was a narrow second. Kennedy also had a podium finish last year but Greencore's Patrick Coveney got bumped right off the list. However another Paddy Power executive, Jack Massey, the bookie's finance director, also performed well in the poll.

Norkom

THE competition is getting tighter, but Paul Kerley's financial security software outfit Norkom has held on to the top spot as the best small company on the stock markets.

As well as facing some smart rivals, Kerley is also facing a lot more of them as big companies have become exceedingly small thanks to stock market crashes.

Societe Generale's rogue trader Jerome Kerviel, the Bernard Madoff $50bn fraud and other cases of financial mischief have been staggeringly good news for the Dublin-headquartered Norkom, which provides software to track and prevent all kinds of naughtiness.

Liam Fitzgerald's drug distribution firm United Drug was a close second, with Peter Gray's clinical research firm Icon also scoring well. Eamonn Rothwell's Irish Continental Group, Paddy Power and UTV picked up votes. Previous winner CPL, which was also placed in 2007, was nowhere to be seen as unemployment spikes damaged the recruitment sector.

Owen Killian

KABOOM! It was the year that IAWS turned into Aryzta in a stunning €2.5bn merger. Quietly spoken IAWS boss Owen Killian transformed the Irish croissant maker into a pan-European player and one of the largest bakers in the world when he took out Swiss cake and confectionery producer Hiestand in June. IAWS had held a 22 per cent stake in the Swiss company for a number of years before pulling the trigger on a deal.

While the market value of the combined entity has fallen sharply, along with the rest of its peers, Killian was well rewarded for his efforts. Between salary, options, bonuses and bumper conditional share awards, his remuneration package could be worth up to €10.15m (subject to hitting major targets), making Killian the top paid executive in the country. By the evidence of this poll, it looks like he could just be worth it.

Ryanair's Michael O'Leary and Icon's Peter Gray slugged it out for second slot. O'Leary did what O'Leary does and despite mucking up his oil hedging policy and delivering a first loss in yonks, the Mullingar maestro landed the plaudits. Icon's chief Peter Gray oversaw massive sales growth at the Clinical research company. CRH's former chief executive Liam O'Mahony and Glanbia's John Moloney were also vote winners.

Previous winners have included Tullow Oil boss Aidan Heavey last year and Kingspan's Gene Murtagh in 2006.

David Drumm

THE Anglo Irish Bank connection just keeps coming up trumps. Last year former Anglo chief operating officer Tiarnan O'Mahony was the overwhelming choice as the country's least impressive boss following the implosion of ISTC. This year it's the turn of the guy who beat him to the top job at Anglo.

David Drumm fairly romped home with over 40 per cent of the analysts' votes as the least impressive boss of any listed company. What a difference a year makes. In January 2007, Drumm was just pipped by Kingspan's Gene Murtagh as the country's top chief executive. Last year Drumm would have landed a podium finish as the third best young executive... but he was too old.

A flawed decision to lend billions and billions to key players in the property bubble has left Anglo facing a truly scarey amount of bad debt. Its share price has fallen 99 per cent. What was once the best performing bank in the world is now the worst -- except for Lehman brothers. But Lehman went bust. The Government stepped in to rescue Anglo and then, to compound matters, chairman Sean FitzPatrick was hiding the full extent of his director loans from shareholders for eight years. FitzPatrick quit, soon followed by Drumm. What are the chances of Drumm, FitzPatrick and Tiarnan O'Mahony hooking up again? Maybe behind the counter in McDonald's. Bank of Ireland underfire boss Brian Goggin and C&C's former CEO Maurice Pratt were also in the shake-up. Further down the list were Elan's Kelly Martin, Newcourt's Ted O'Neill, Boundary Capital's Niall McFadden, McInerney's Barry O'Connor and IL&P's Denis Casey. Aer Lingus head Dermot Mannion, the least impressive CEO of 2006, received no votes at all.

Sean Quinn

Taking 15% of Anglo Irish

WELL, there could only be one winner here, couldn't there?

Sean Quinn's decision to buy up to 15 per cent of Anglo Irish Bank may well go down as the worst investment decision in Irish history. The stake, now held by his family, has seen close to €1bn wiped off its value in a couple of months. Ouch. Christmas must have been great craic chez Quinn.

Quinn resigned as chairman of Quinn Insurance and was hit with a record €3.4m fine after it emerged that group companies had secretly loaned €288m from the insurance arm of the Quinn group to another family company to finance the purchase of the Anglo stake.

There were a large number of entries for 'worst deal', but Quinn's punt picked up nearly three times as many votes as any other deal.

Icelandic group Bakkavor's decision to buy a near 11 per cent stake in sandwich-maker Greencore before dumping the shares seven months later at a €70m loss was particularly prominent.

One surprising entrant into the list was the IAWS merger with Hiestand to create Aryzta. This was also voted the best deal of the year. AIB paying a dividend in July and Kerry's decision to pay a €20m break fee on the blocked €165m Breeo acquisition were among the many other worst deal contenders.

Deal of the year

The IAWS merger

IT was the largest deal of the year and a pretty overwhelming choice as the top transaction of 2008.

It's slaps on the back for Owen Killian and his advisers for pulling off the €2.5bn cross-border merger of IAWS and swiss baker Hiestand to create Aryzta. Almost half of the analysts voting chose Aryzta as the top transaction.

The weakest part of the deal was the silly name. As any school boy knows, Aryzta means the apex of an ear of wheat in Latin. We didn't even know that wheat had ears.

The Government bank guarantee scheme was also chosen as one of the better deals of the year -- probably more to do with the survival of the banking and financial system rather than for any slick bits of red-braced derring-do and wheeler-dealering.

Glanbia's $315m acquisition of Optimum Nutrition in August was also given a big thumbs up. The deal catapulted Glanbia into the driving seat in the fast growing sports nutrition sector.

Best big company

CRH

THIS is getting monotonous. The CRH behemoth just keeps steamrolling the opposition as Ireland's best big company.

In fact, after the stock market crash, it's probably Ireland's only big company left. CRH shares fell just 25 per cent in 2008, valuing the company at just shy of €10bn... or more than all the banks put together.

The financial crisis and the global slowdown have left CRH forecasting a decent fall in profits, but not as bad as everyone else's.

CRH's long-serving boss Liam O'Mahony has just handed over the reins to Myles Lee and is assuming the chairmanship of the vast cement and rocks company. It's not best practice at all, but the shock resignation of chairman Sean FitzPatrick, the former Anglo Irish Bank chairman, left a bit of a gap to fill.

Owen Killian's increasingly large Aryzta was a fairly distant second.

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