ANALYSIS:With growth based on property and services, Newcourt was always vulnerable to downturn, writes BARRY O'HALLORAN

THE RAPID rise and sharp fall of services group Newcourt over the last seven years reflects pretty accurately the fortunes of the economy and many businesses over the same period of time.

Bank of Ireland yesterday appointed David Carson of Deloitte as receiver to the group, following the failure of ongoing efforts to restructure its €36 million debt.

He is taking over there at the Newcourt board’s own invitation. At the same time that directors asked the bank to appoint a receiver, they also asked the London and Dublin stock markets to suspend trading in the company’s shares.

Its 4-cent-a-share opening quote in Dublin yesterday morning meant its total worth was €3.6 million. In 2007, the same company, albeit with a property arm that it has since sold still attached, had a value of €125 million.

Just after Christmas, Newcourt sold this property and student accommodation division, Ely, to its founder, Philip Marley, in a deal valued at a total of €39.3 million.

No cash changed hands, and instead, Ely’s new owners took on €37.1 million worth of debt, with a commitment to pay a further €2.2 million in 2011, if certain contractual obligations were met.

The deal came at the end of a period where there was speculation that Newcourt’s management would take it private, as its experience as a quoted company had soured as markets collapsed throughout 2008.

It would not be fair to say that back in November 2005, when it launched on both markets, that it did this with a huge fanfare. But it looked like a natural step for a company that was founded by Ted O’Neill and Philip Sykes just three years before with backing from institutional and private investors.

Its focus was on two areas that were set for unprecedented growth, services and property. One division dealt with acquiring and managing property and student accommodation, the other with services, namely security and recruitment.

Around the time of its flotation in 2005, it bought Federal Security, a business it still owns which provides security staff to buildings and businesses.

The same year, it bought out the 49 per cent it did not already own of Sigmar Recruitment, and laid the foundation for a specialist pilot recruitment and training operation, which is still functioning today.

It did seven deals in 2006, including Ely for €22 million, and recruitment firm Kenny Whelan. In August of that year, chief executive Ted O’Neill told The Irish Times that its ultimate ambition was to create an international player on a par with Kerry Group or CRH.

The key hope for its businesses now looks to be in unwinding those deals. It has already sold Ely. Sigmar boss Adrian McGennis just last week told the board that he wants to buy the company.

Yesterday receiver Carson said his first priority would be to talk to anyone interested in bidding for shares in the group’s subsidiaries, sending a clear message that back to basics may be the only way forward.