INSIDE THE WORLD OF BUSINESS
Ricard nephew may raise glass as family firm’s CEO
The unexpected death of Pernod Ricard chairman Patrick Ricard may speed up his nephew’s climb to the top, reinforcing the founding family’s grip on the world’s second-largest spirits maker.
Patrick Ricard, whose father Paul founded the eponymous maker of the aniseed-flavoured pastis liquor in Marseilles in 1932, died on Friday aged 67.
Alexandre Ricard (40) has long been expected to become chief executive, fulfilling his uncle’s wish that the French heirs of the company’s founder remain at the helm of a global business that includes Jameson Whisky and Absolut Vodka alongside Ricard and Pernod pastis. That could now happen as soon as 2015, when incumbent Pierre Pringuet, the first person outside the family to hold that post, is due to retire.
Ricard, whose family is the group’s biggest shareholder with a 14 per cent stake, joined in 2003. In 2008, he became chairman and chief executive of Irish Distillers, before moving on last year to managing director of its global distribution network, with a seat on its executive board.
Speaking to The Irish Times during his time at Irish Distillers, the hard-working Alexandre was coy on the subject of following in the family footsteps at the head of the group. He said having a Ricard heading the business would “be the cherry on the cake” for the family. But it will always choose the right person for the job, family or not.
Sanford C Bernstein analyst Jean-Marc Chow said yesterday that Alexandre, whose father Bernard was at the helm between 1968 and 1972, is being groomed to become “the next CEO”. And French daily Les Echos, which did not cite its sources, said Alexandre could soon become deputy chief executive with Pringuet taking the chairman position. Chow suggested Patrick Ricard’s sister and board member Daniele (73) may become chairman.
Kingspan profits overtake sales
The results published yesterday by Kingspan show profits growing at a faster rate than sales as a result of innovation and a continuing shift into higher-spec business. That is all the more welcome coming as it does against the backdrop of Ireland’s ongoing economic woes.
That the Cavan-based building materials group has grown to become a multinational is in large part due to its focus on establishing a technological advantage over its peers, something it continues to strive to maintain by way of its €12 million per annum spending on research and development.
This and the no-doubt-associated appetite within the group for steady progress and growth are the hallmarks of many successful manufacturing businesses.
A stark aspect of the figures released yesterday, however, comes in the short section dealing with sales in Ireland. While sales by the insulation panel division were up to varying degrees in all other markets in the first half of this year, they were down by 13 per cent in Ireland.
For the insulation boards division, sales in Ireland were down 18 per cent. The rate of newbuild housing reached a low during the period of approximately 5,000 units a year, the report noted.
As chief executive Gene Murtagh said, last year he thought the level of new builds was at an unsustainably low level but, lo and behold, here we are one year on and they have dropped to lower levels still.
You would surely have to go back decades to see such a depressed level of activity being matched.
More success stories akin to that of Kingspan could help Ireland begin to turn the corner and restore its economic wellbeing.
Content a new type of streaming king as Netflix commissions series
Video entertainment streaming services are hungry for content rights these days to the extent that companies that have been relaxed about their place in the film and television rights-buying hierarchy must be feeling increasingly less comfortable.
Netflix founder and chief executive Reed Hastings told the Sunday Telegraph that the company planned to be “really aggressive” in its bid to win Hollywood studio movie rights in the UK and Ireland, getting in there before other rights-buyers, which principally means BSkyB.
But winning “first window” rights to films, assuming the Nasdaq-listed company is successful in its bidding, is only part of the story of why Netflix is looking well-positioned to build on the one million subscribers it has swiftly amassed in the UK and Ireland.
Its strategy is already playing out in the US, where shrinking numbers of video-on-demand customers at some of the traditional cable companies has led analysts to point to a Netflix effect, whereby customers cut the cord on pricey cable packages and opt instead for online video services such as Netflix and Hulu, which tend to be cheaper.
But this is not just a distribution story: Netflix and Hulu have also matured to the stage where they are commissioning original (or kind-of-original) content.
Netflix’s highest-profile commission to date is a new series of Arrested Development, the comedy that ran on the Fox Network between 2003 and 2006, only to see its cult following expand massively in the years after cancellation.
Financed by a Netflix deal, all 10 new episodes of Arrested Development will be released at the same time in 2013, for the benefit of box-set bingers – no need to mimic the old television-channel-schedule way of doing things.
More interesting in many ways is the story of the development of House of Cards. Netflix has ordered 26 episodes of the show, created by David Fincher and Kevin Spacey, and updated from the 1990 BBC political serial of the same name. It’s not just another US remake – Netflix actually outbid cable television networks HBO and AMC for the rights.
The logical conclusion is that the production houses that actually make film and television should see their hand in the market strengthened.