Having built up myriad hotel and property interests Spectra Photo's owner doesn't do it for the money anymore, yet his enthusiasm is undimmed, writes Arthur Beesley.
Xavier McAuliffe is something of a one-man conglomerate. Not content with building up Spectra, the Republic's biggest photographic business, he has significant international property and hotel interests. A multimillion man, he is a big investor in a security business and in a ready-meals enterprise.
McAuliffe recently turned 61, but his entrepreneurial verve is undimmed. A Kerryman, his enthusiasm for the fray dictates that he cannot but scope out business opportunities even when he is on holidays.
"I'm all the time looking. We look at something every other day . . . I just like working. It's not for the sake of the money. I like a challenge."
If McAuliffe is no longer in the game purely for the money, that's because he has already made his fortune. With a net worth of €66 million, he has cash to take on big projects but maintains a stern stance on risk.
Case in point: he spurned an opportunity last year to buy out the troubled AgfaPhoto in Germany for some €40 million. It might have been a trophy asset but the figures didn't work. "The risk was too great," he says.
Similarly, McAuliffe says he also turned down a chance to buy Kodak's photo processing business in Britain. Again, the sums didn't stack up. For the distribution side of the business to work, McAuliffe says annual cashflow of £20 million (€29.28 million) was required. "We could have gotten it for a song but it was too high a risk."
The onward march of digital photography is a big factor in the troubles encountered by traditional operators in the sector. Spectra made its mark developing prints from old-fashioned film, but McAuliffe says the business is bearing up well in the digital world.
He says turnover is in the region of €85 million, down somewhat from previous highs, but adds that profits are in the millions. The company defends its patch by providing printing services in retail outlets. In spite of a €3 million investment in printers that can churn out 40,000 snaps an hour, he says the development of an online service has been held back by the low penetration of broadband networks.
If photo business is the backbone of McAuliffe's empire, its tentacular reach was achieved thanks to dozens of property and hotel interests in Ireland, Britain, Germany, Poland, Mozambique and South Africa.
On the home front, the latest of these is the €50 million Lyrath Estate Hotel in a 170-acre estate in Kilkenny. It's not his first hotel venture in the city. He also owns the River Court Hotel in Kilkenny. Bertie Ahern conducts the formal opening of the new venue next Friday, but it has already been trading for a number of months.
McAuliffe says the quality of the offering and the hotel's capacity for 1,500-seat conferences means it will weather any downturn in the sector. A syndicate of 60 private investors assembled by tax consultant Frank Brennan and solicitor Randal Doherty put up €10 million in capital in a tax-driven investment in this project.
McAuliffe intends to spend much of the next two years bedding down this business. He brought in more than 100 containers from China to build and furnish and had dealings with 62 suppliers there. He has nothing but praise for Chinese business, saying that only suppliers let them down.
Competition from China, with all its low-cost advantages, will be a major challenge for Ireland in the near future, he says.
"Seventy per cent of our business in Ireland is with the Americans. It's all IT basically. We were the biggest producers of software in the world. All those things will start moving to China . . . It won't keep me awake at night but it should keep a lot of Governments awake at night."
As a significant employer in the hotel trade, McAuliffe says he has "fantastic" Polish workers on his staff. While he has taken the benefit of the arrival of large numbers of migrant workers into Ireland, he says there should be more Government control over the intake of workers.
Unchecked, he says this has the potential to create serious social problems in the event of an economic downturn.
"There's nothing wrong with opening the labour market. But when things go wrong, who's going to look after it? . . . None of our planning is [ that] far ahead. We have to plan for the future. Where's the 20-year plan on all these things and where's the 10-year plan on all these things?"
McAuliffe maintains that the Irish policing system is unprepared for such challenges. In addition, he says some criminal elements have exploited the immigration system.
As an example, he says a superviser in one of his own businesses was kidnapped and held for 24 hours by associates of a staff member he had reprimanded. No complaint was made to the Garda as the manager concerned was afraid of a reprisal. He believes the employee in question is no longer on his staff.
"It was a lady that was working with us, on the floor. He reprimanded her. He was taken away and kept for 24 hours. That would be unheard of in Irish society in the past . . . It's a frightening thing when you hear that happening."
Far from home, McAuliffe awaits the imminent sale of the Hans Merenky Lodge and Country Club in the Kruger National Park in South Africa, where he has a big residential project.
The hotel will realise some €20 million, he says. The acquirer is a Hong Kong-based Indian woman, who has already spent €4 million on a private residence on the estate. McAuliffe has another hotel in Cape Town and a resort at Vilancoulos, Mozambique.
"I went to South Africa 15 years ago and I just fell in love with the place," he says. His latest project there is the €50 million Hibernian Towers development in the Cape Town resort known as the Strand. The 22-storey development, with 110 apartments and 26 office-retail spaces, will be ready next year.
McAuliffe has a number of private investments but he says the relentless upward spiral in the price of Irish sites cannot continue at the present rate. Land prices are overvalued, he says.
"AIB is not lending on land banks at the moment unless someone comes in with 40 per cent equity themselves."
Outside property, McAuliffe has a 51 per cent in Prestige Foods, a Listowel-based ready-meals business he co-owns with a businessman John O'Connor. The company has deals with Dunnes Stores and other supermarkets, among them Superquinn. Turnover is the region of €5-€6 million.
McAuliffe also has a 50 per cent stake in Sentry Security, a company with operations in Cork, Kilkenny, Waterford and Carlow. The other 50 per cent is owned by a businessman, Paddy Roche. According to McAuliffe, annual turnover is in the region of €25 million.
The very scale of McAuliffe's ongoing interests suggests that he will not be retiring any time soon.
Factfile
Name: Xavier McAuliffe
Age: 61
Job title: Managing director of Spectra Group, a personal investment vehicle with interests in the photographic, hotel, property, security and food sectors
Background: McAuliffe set up Spectra in the 1970s, focusing on photography development. In the mid-1980s he went into the leisure business. His first hotel was the Dingle Skellig. He bought the Lindridge Park country house estate in Devon in 1993
Family: Divorced, he has a son, a daughter and a grandson
Hobbies: A helicopter aficionado and a pilot for 30 years, he flies his own Bell 407
Why he is in the news: The formal opening of Lyrath Estate Hotel Conference Centre in Kilkenny takes place next Friday. He is also selling a hotel in Cape Town
