Friday 15 December 2017

Year in review: The winners and losers in Business in 2012

Compiled by Irish Independent Business desk

The highs and lows of the Irish business year as seen by the Business Desk of the Irish Independent.



WINNERS

Kerry Group

THE phenomenally successful home-grown company is always a winner, and could even be ranked among the winners of the decade.

But the firm secured another successful PR coup this year when it announced that it would house its Global Technology and Innovation Centre in Co Kildare, with the creation of 900 jobs.

It couldn’t have asked for better publicity as Taoiseach Enda Kenny, Tanaiste Eamon Gilmore, Jobs Minister Richard Bruton and Agriculture Minister Simon Coveney appeared with Kerry chief Stan McCarthy at a press conference unveiling the project, and the massive jobs boost.

And to top it all, it was awarded company of the year at this month’s ‘Business & Finance’ awards.

Shannon Airport

The airport and indeed the mid-west received a boost with news that it would be separated from the Dublin Airport Authority and become an independent entity.

The Government predicted that severing the link would generate between 3000 and 3500 new direct jobs for the Shannon region over the next five years.

Under the current system, Shannon is dying a death – passenger numbers slumped a staggering 37pc in just one year between 2009 and 2010.

This, in hard numbers, was almost one million people not getting on flights, not buying coffee, not browsing in the duty free, and, in many cases, not doing business in the mid-west region.

Staff at the airport are understandably jittery about their future conditions of employment once the changeover is made, with workers threatening industrial action.

Denis Brosnan, chairman of the mid-west task force, said their future is more secure under an independent Shannon.

Providence Resources

The best performing stock on the Irish exchange this year has been Providence Resources, as investors finally begin to buy into the company’s exploration programme and the notion that Ireland could be an oil producer.

Providence is currently in the middle of a €500m exploration programme which is prospecting for oil

and gas in almost every corner of the island.

So far, the signs have been good, and there are many more fields to be explored in the coming year.

Providence must now bring in large partners to share the risk, but that is unlikely to prove too much of a problem at this stage. The company’s one setback has been in Dublin where it has encountered protests about possible environmental issues.

OpenHydro

Investors in wave energy company OpenHydro got an early Christmas present when French nuclear technology giant DCNS confirmed in late December that it intends to take up its option to take control of the Louth-based company.

The move valued the Irish tidal energy company at around €175m, and was some-thing of a coup for the company which designs and manufactures turbines for converting tidal power to electricity.

OpenHydro’s backers include founder Brendan Gilmore, Bord Gais and listed investment group One51. Open Hydro has projects in several countries but nothing in its home country.

Cove Energy

Thailand’s PTT Exploration and Production bought Dublin-based Cove Energy over the summer following a bidding war with Shell, which pushed the price to £1.2bn (€1.5bn).

Cove put itself up for sale in January after reporting one of the world’s largest gas discoveries in a decade in Mozambique. The sale was great news for Dublin-based founder John Craven and the company’s many Irish shareholders who accounted for 10pc of the shareholder base.

Founded in 2003, Cove’s main asset was an 8.5pc stake in a field in Mozambique, which holds between 15 trillion to 30 trillion cubic feet of recoverable gas.

Smurfit Kappa

The paper company which has been around for generations keeps going from strength to strength.

Smurfit Kappa’s shares are the second best performing on the Dublin stock exhange as the company continues to shrug off problems with world economy.

Europe’s largest containerboard maker was one of the few Irish companies tipped by Davy Stockbrokers earlier this month for 2013 because they maintain strong balance sheets.

The other tips include Penneys owner ABF, C&C, Israel's Frutarom, Greencore, DCC, Deutsche Post DHL and William Hill.

Fat Cat Bankers

The highest paid bankers, both senior executives and pensioners, got through 2012 with the narrowest of escapes. Most emerge with their incomes intact.

Top bankers at AIB were the main exception. Senior figures at the bank including chief executive David Duffy took a 15pc pay cut.

A smattering of former executives have been embarrassed into parting with a portion of their state supported pensions, most notably Eugene Sheehy who cut his pension back to €250,000 a year.

Elsewhere public outrage over pay fell on deaf ears, notably at IBRC, the former Anglo Irish Bank, where Mike Aynsley's entire top team were discovered to all be on pay deals at or above the so-called cap on bankers' pay of €500,000 a year.

John Corrigan

The top man at the National Treasury Management Agency defied the skeptics to succesfully re-enter the bond markets, allowing the state to borrow from the private sector for the first time since the bailout.

That degree of success was unrivalled in the rest of the public service or private industry in 2012.

The state’s re-engagement with the market cleared the way for banks and the |semi-states to begin borrowing again.

The big test however will be whether Corrigan and his team can set out and stick to a calendar of regular long term bond issuance in 2013.

If they can, it will normalise Government borrowing and put a fair wind behind the effort to emerge from the bailout next year.

If not, a second bailout and renewed eurozone crisis loom in 2014 – no pressure.

LOSERS

Sean Quinn

How the mighty have fallen. He first saw his son jailed for contempt, and then he himself was put behind bars for almost three months.

Once Ireland’s richest man, the former billionaire is emersed in a legal battle with the Irish Bank Resolution Corporation, formerly Anglo Irish Bank, amid claims that the family put millions of euro worth of property assets beyond the reach of the bank.

He has enjoyed support in the northern half of the island, particularly in the heart of his former empire in Cavan and Fermanagh, but has been villified elsewhere.

Some would argue that the taxpayer has lost out more than Mr Quinn.

Not only has it not been able to recover the debts owed by Mr Quinn, but it is footing an ever increasing tab for the international legal battle and the rising cost of the Quinn Insurance debacle.

Tullow Oil

Dublin-listed Tullow Oil has had a difficult year which saw shares slide 25pc as the company failed to reach agreement with the Ugandan government over various disputes, which have delayed the start-up of oil production in Uganda's Lake Albertine rift basin.

The company also shocked markets with failure to find oil in its Okure-1 exploration well, off Ghana, as well as registering unexpected disappointments in Guyana and French Guiana.

A decision to pull out of the UK parts of the North Sea has also unsettled investors, although some have welcomed a new focus on exploration and a big bet on 28 offshore licences across the North Sea, Norwegian and Barents Seas in the Arctic Circle.

Johnny Ronan|and Richard Barrett

It was as bad a year as could be envisaged for the founders of the Celtic Tiger property company, Treasury Holdings, as their empire collapsed into liquidation.

Among the most controversial of all the boom-time developers, Mr Ronan and Mr Barrett built on a massive scale during the property bubble.

Their Treasury venture was once valued at €4.8bn, but it was plunged into liquidation after being brought down by a toxic combination of collapsing property values and €2.7bn of debt.

Having battled with NAMA, the company was finally undermined by a €70m debt to the Belgian lender KBC Bank, which went to court to have the business shut.

Ernst & Young

The company served as auditors for Anglo Irish Bank before the crisis hit. The Irish banks counted three of the ‘Big Four’ accountancy firms – Ernst Young, PWC, and KPMG – as their auditors.

The role of these companies was being questioned for failing to warn about the exposure of the banks to the property sector.

But matters deteriorated further for Ernst & Young when the Irish Bank Resolution Corporation (IBRC) last month announced that it was taking legal action against its former auditor.

E&Y has pledged to vigorously defend itself against any such action, but although the case has yet to be heard, the multinational could have done without the bad PR.

Petroneft

Petroneft, a small oil exploration company focused on Siberia, has also had a difficult year. Last month the company disappointed investors after a well drilled in Siberia hit oil but it flowed at a lower rate than had been hoped.

The company has tried to put a brave face on such setbacks, but the markets appear to be losing interest in the company following several disappointments.

Company chief executive Dennis Francis has described the well's production so far as “very economic” and predicted the flow rate would improve, but the share price is down and analysts are downbeat. A recent statement “ranks as a disappointment”, Goodbody's Gerry Hennigan told investors.

Paddy McKillen

The Belfast-born developer failed in his High Court case in London against the millionaire Barclay brothers – owners of the Ritz Hotel and Telegraph newspapers – after he sued them over control of three top London hotels.

The High Court dismissed the action over attempts to take over Coroin, the company which owns Claridges, the Connaught and the Berkeley hotels, by the brothers.

In the high-profile case, which spanned three months, it was claimed there had been breaches in the shareholders agreement and breaches of duty by directors who had been appointed by the Barclays.

Mr McKillen was one of a number of Irish investors who formed a syndicate which bought the Maybourne hotel group in 2004 in a deal organised by financier Derek Quinlan.

He is expected to appeal the decision.

Women drivers

THE cost of motor insurance is set to rise by as much as €300 for young women because of new rules banning gender discrimination.

But young men are set to gain from lower premiums – despite being involved in a greater number of expensive road accidents.

New EU regulations mean that from December 21, insurers and life companies will no longer be allowed to use gender when pricing financial products, including motor insurance, life cover and annuities.

The effect of this ruling is that private insurance products which differentiate by gender on price or benefits will be banned.

Young women drivers will be the worst affected by the new rules, with premiums rising by 24pc on average across the eight insurers reviewed by AA Insurnace.

Premiums for women aged 30 will rise by an average of 9pc, compared to average increases of 2pc for women aged 70. Traditionally women enjoyed lower premiums because although they have as many accidents as men, they tend to be smaller ones.

Enda Farrell/Nama

The ‘bad bank’ suffered significant damage as a result of the Enda Farrell affair.

The Farrell controversy initially kicked off when it was revealed that the former NAMA executive had bought a Dublin house from a borrower whose debts were controlled by the agency.

The real concern was not the price that Mr Farrell paid for the house, or even how the amount paid might have been affected Farrell's status as NAMA insider.

The big concern was that the executive was able to buy a property on NAMA's books without the agency knowing anything about it.

NAMA also took court action over the alleged release of NAMA documents by Farrell to third parties.



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