Losses mark WH Smith’s end of Irish story; Mugabe’s big plan puts investors off; spin and the Courts Service; Elkstone bows out
WH Smith books loss in Shannon
IT SHOULDN’T come as a surprise given the state of the economy here but the Irish operation of British bookseller WH Smith finished last year in the red.
Accounts just filed by WH Smith Ireland Ltd show it made a loss of €139,353 on turnover of €1.7 million in the 12 months to the end of August 2010.
This compared with a deficit of €247,109 on sales of €1.5 million in the previous year. But the retailer only traded for about eight months in that period.
Its net liabilities amounted to €386,362 at the end of August 2010.
The accounts indicated that the company got a break on its rents in 2010. It paid rental of €475,249 last year compared with €542,999 in 2009. Its lease commitments over the next two to five years amount to €2.7 million.
The accounts relate to the performance of WH Smith’s two shops at Shannon airport, which opened in January 2009.
This was around the time that air travel in Ireland nose-dived.
Since then, the listed company has opened outlets at the new Terminal 2 in Dublin airport.
WH Smith wouldn’t comment this week on the performance of the T2 shops or discuss its Christmas trading here as it is currently in a closed period.
We’ll have to wait for the publication of its interim results on April 14th for an indication of its performance at T2.
A number of retailers at T2 have been grumbling at the staggered opening of the facility and the lack of footfall in the building since the ribbon was cut by former taoiseach Brian Cowen last October.
It will be interesting to see if WH Smith makes any comment on this.
Of course, the bookseller isn’t alone in feeling the pinch in the retail book sector here. Sales in the sector have fallen by about 30 per cent since the end of the boom.
Eason, the State’s biggest bookseller, this week announced plans to reduce its cost base by €8 million a year, while HMV-owned Waterstone’s shuttered two shops in Dublin in February.
Elkstone winds down Irish venture
CORPORATE FINANCE executive Chris O’Connell has decided to call time on Elkstone Capital, which was set up here in 2009 in order to invest in “big ticket” mandates in Ireland and overseas.
Elkstone was backed by Roger Jenkins, a former executive chairman of Barclays investment banking businesses in the Middle East.
It also included former EBS Building Society executive Alan Merriman in its ranks.
It is understood that Elkstone ran the rule over three of the four biggest banks here and looked at some property deals but couldn’t quite make an investment case stack up, which is no surprise given the stress test results that emerged yesterday.
Elkstone developed strong connections with Middle Eastern sovereign wealth funds, and over the past year or so, it has redirected its focus towards South America, and Brazil in particular.
It raised hundreds of millions of dollars for investment in a Brazilian private equity fund.
It seems O’Connell didn’t want to focus his energies on Brazil and has decided to wind down Elkstone’s activities in Dublin.
Jenkins and Merriman will continue to work on the Brazil investments.
O’Connell has been around the block. He previously worked with IBI Corporate Finance and was managing director of Garrett Kelleher’s property group Shelbourne Developments.
He also worked for Dresdner Kleinwort Wasserstein in London and Frankfurt, where he established its investment banking franchise in the early 1990s.
His CV includes acting as a lead adviser on the Ryanair IPO, the merger of Avonmore and Waterford Co-ops, and the purchase of the Doyle Hotels by the then Jury’s Group.
So what next for O’Connell?
He wasn’t available for comment this week. But O’Connell Corporate Finance – which was put on ice two years ago when Elkstone was set up – is back up and running on the web.
The website says it has a “specialist expertise in real estate”, which could prove to be valuable as the National Asset Management Agency seeks to work out its considerable property portfolio over the next decade or so.
Qualification criteria rules out some of the best, says PR chief
A RECENT tender notice from the Courts Service for media relations services appears set to put the trade body for PR consultants into a spin.
In its notice, the Courts Service stated that tenderers must hold a “diploma [or higher qualification] in journalism or public/media relations”.
Fair enough, you might think. After all, only the best should be good enough for taxpayers’ precious funds.
Gerry Davis, chief executive of the Public Relations Consultants Association and a former Army officer, was spurred into action.
In a letter penned last month to Brendan Ryan, chief executive of the Courts Service, Davis said such a requirement would effectively “rule out many of the most accomplished and experienced public relations practitioners in this country” from bidding.
Why?
“It is important to recognise that formal qualifications in public relations and journalism were not introduced in Ireland until the 1990s. As such, many of the most senior and most capable professionals in our industry will hold a variety of academic qualifications other than in PR or journalism,” Davis explained.
Davis asked that the Courts Service reconsider the clause and issue an amendment.
In reply, Ryan said it would be “neither appropriate nor desirable that the qualification criteria . . . be revisited”.
If this is to be a trend among State bodies into the future, the Dad’s Army brigade in the PR industry might have to consider a return to the classroom.
Mugabe plans for multinationals puts Teeling on back foot
CLONTARF-BASED veteran mining entrepreneur John Teeling has been traipsing around Africa for years hoping to strike pay dirt, with mixed results.
Zimbabwe has long been one of his favourite countries but Robert Mugabe’s plan to force multinationals to hand over 51 per cent of their mining businesses to locals could change that.
“I was there in February and I left it very disillusioned,” Teeling told me this week. “I’ve been operating there since 1986 trying to make a shilling. But it has never happened . . . it’s quite depressing.”
Botswana Diamonds, an offshoot of African Diamonds that listed in London earlier this year and is chaired by Teeling, has early-stage diamond licence applications in Zimbabwe with a local partner.
BD is looking for licences in the Marange region of Zimbabwe, which is tipped to be one of the top three diamond-producing areas in the world.
Swala Resources, a listed company co-founded by Teeling, is prospecting for gold in Zimbabwe.
Teeling also has an interest in a coal licence in the country.
“This is going to be a problem,” Teeling said. “There’s massive political uncertainty and it’s the uncertainty that is the problem.
“It’s unfortunate and I hope it’s clarified quickly.”
Little things
HAVING ALREADY taken a punt on low-cost airlines in Mexico and Asia, Declan Ryan has decided to spread his wings to Colombia.
Son of the late Tony Ryan, founder of Ryanair, Declan has emerged as a large shareholder in VivaColombia, a low-cost carrier that is due to launch in early 2012 with start-up capital of $2.5 million.
According to media reports in Colombia, Declan met last month in Bogotá with Colombia’s president Juan Manuel Santos and his transport minister German Cardona to discuss the venture.
The airline’s fares are slated to start at $15 plus taxes and it will launch with three aircraft. It will mirror the business model of Viva Aerobus, the Mexican airline that Ryan has backed since its launch in 2006.
Ryan is also a shareholder in Singapore-based Tiger Airways and its spin-off Thai Tiger Airways, and in Allegiant Air in the US.
Ryan earned 32 times his original investment when he sold the bulk of his Tiger holding last August.
Repeating this in Colombia would be a neat trick.
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THINKHOUSE, THE self-proclaimed “youth communications agency”, has fattened its client portfolio by securing Clonakilty Black Pudding as a client.
Thinkhouse has also added RTÉ Storyland to its roster and will work on social media for the show.
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IT’S OFFICIAL: Ireland is a Mickey Mouse country.
But this has nothing to do with our tarnished image abroad since the collapse of the Celtic Tiger.
Walt Disney is to open its first shop here on May 18th at the former Laura Ashley store on Grafton Street.
For now, Disney won’t say how many jobs will be created by the venture.
But its recruitment advert last week for “cast members” elicited 82 replies on the first day.
That’s all for now folks.
