IRELAND'S GLOBAL HEAVYWEIGHT COMPANIES - Ireland can count a number of its companies as world leaders in their fields. They operate in very different industries - aviation, construction and food - but their journeys from humble beginnings to global market share are remarkably similar, writes the Financial Times in its special report on Ireland. The newspaper says that these days, names such as Ryanair, CRH and Kerry Group are both admired and feared by their competitors, but three or four decades ago they were virtually unknown, even in Ireland. So how did they rise to the top? Their stories begin with a generation of young executives who came to prominence in the 1970s and 1980s and launched their small companies on audacious campaigns of global expansion - often following routes taken by their emigrant forefathers. “We started out as a minnow in 1985, flying a single 15-seat aircraft from Waterford to London,” says Neil Sorahan, chief financial officer of Ryanair, the low fares airline that now carries 85m people per year with a fleet of more than 300 aircraft. “We had this outdated full-frills model and within the first four years, the company had lost all its share capital,” he says. The fledgling airline was in trouble. A new team was brought in - including a 30-year-old former shopkeeper called Michael O’Leary. Mr O’Leary had been sent to the US to study American low-cost carrier Southwest Airlines and replicate its business model in Ireland. The team transformed Ryanair; driving down costs, changing passenger behaviour and generating ancillary sales by turning their aeroplanes into “convenience stores in the sky”.
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PTSB TO RAISE CAPITAL AFTER FAILING STRESS TEST - Permanent TSB, which is 99.2% owned by the State, is expected to announce details of its capital-raising plan on Sunday after the European Central Bank publishes the results of its pan-European comprehensive assessments, which PTSB is expected to fail. It is not clear how much capital PTSB will be required to raise but the expectation is it will be below €1 billion, says the Irish Times. While the ECB will announce the results of the test and the capital shortfall facing PTSB, the Irish bank is likely to reveal the amount it will seek from the markets is considerably less than the deficit identified by the regulator. The ECB exercise was a point-in-time examination of PTSB’s books relating to December 2013. Since then, the picture around PTSB’s finances has improved considerably, particularly in relation to collateral values on Irish property and its mortgage arrears. The ECB figure will be a gross one. From this, PTSB is expected to net off up to €400m in Contingent Capital Notes held by the State. Some or all of these will be allowable by the ECB to help bridge the capital shortfall.
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MORTGAGE LIMITS SHOULD BE PHASED IN, EXPERT WARNS - Mortgage limits should be phased in, expert warns - New rules forcing first-time buyers to have big deposits should be phased in gradually, the Central Bank has been told. This is because a sudden jump from a requirement of a deposit of 10% to a 20% one could be very disruptive and unfair to those who are close to getting a 10% deposit together, consumer advocate Brendan Burgess said in a submission to the Central Bank. Mr Burgess agrees with the new limits, but says they will make it difficult for potential new buyers to get on the housing ladder, writes the Irish Independent. He said the key problem was a shortage of housing. The restrictions will exacerbate the problem, so it may be wise to amend them for new homes. "The second key problem is artificially high variable mortgage rates in Ireland. This should be a higher priority for the Central Bank to tackle," he said in a draft of a submission. Central Bank governor Patrick Honohan has admitted variable rates are very high here compared with the rest of the eurozone, but has ruled out taking any action to force banks to offer buyers better value.
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SLIGHT INCREASE IN SECURITY FIRM McAFEE'S IRISH PROFITS - Pre-tax profits at the main Irish unit of US security software maker, McAfee, last year rose marginally to €23.6m. In accounts filed with the Companies Office, the Cork-based McAfee Ireland Ltd increased its revenues by 1% from €390.2m to €393.4m in the 12 months to the end of December last year, writes the Irish Examiner. In 2012, McAfee, which has its headquarters for its operations in Europe, the Middle East, and Africa in Cork, announced the creation of a 30 R&D jobs at its Cork base. Numbers employed there last year decreased from 338 to 332. In February 2011, Intel agreed to buy McAfee’s global operation for $7.68 billion in cash in an effort to boost its security offerings. According to the directors’ report for 2013 for McAfee Ireland Ltd, the firm increased its pre-tax profits “as a result of both improved turnover and operating margin”. The directors state that the firm’s gross margin increased from 34% to 38% through 2013. The firm’s spend on R&D during last year totalled €9.67m compared to €9.1m in 2012. McAfee, which established its Irish operations in 2004, provides security solutions, including anti-virus, anti-spyware, anti-spam, and intrusion prevention.
