Current Account: This week two listed companies appeared to become overcome with generosity when it came to dividing up the profits with shareholders.
Global building materials player CRH announced a new policy under which it intends handing back an increased proportion of earnings to shareholders.
Earnings were 4.8 times the dividend payout in 2005, CRH plans to progressively cut this cover to 3.5 times in 2008, meaning that the payout will be slightly over 28 per cent of earnings rather than 22 per cent.
The adjusted policy will, as it happens, bring the building materials giant more closely in line with its international peer group.
Bookmaker Paddy Power, criticised in the past for holding on too much cash which it said it needed to pay for expansion, is doing something similar. It is proposing to buy back up to 10 per cent of its share capital from stakeholders at its year end.
Paddy Power is known for the "money-back specials" it uses to tempt in more punters to its shops, website and telephone lines.
Presumably, this time it has decided that shareholders warrant a money-back special of their own!
Irish Continental deal lacks a little sparkle
Current Accountwas out and about in the south city early yesterday when news broke of Eamonn Rothwell's bid to take private the Irish Continental ferries business. The manoeuvre has been on the cards ever since Rothwell replaced more than 500 Irish seafaring staff with east European workers on significantly less pay.
That sorry affair became all the more bitter in January when the Government decided that it had to hand over €4.3 million in public money to fund the redundancies. Needless to say, the bulk of the severance costs were shouldered by the publicly-quoted group. That matter done with, Rothwell is now poised to take ownership of a business with significantly less labour costs.
But what was very bad for workers was good for shareholders, if a conversation overheard between two fellows in a Ballsbridge cafe is anything to go by. Young buck to his pal: "That's a great deal, Irish Ferries. Three of us together have 8 per cent of the company. We're well up. Delighted."
'Twas early to be sure. But if you're thinking that a morning drop of champagne was in order, forget it. "Two grande cappuccinos and a latte to go" was all the boys had.
Betting on Barchester
Barchester Healthcare is playing its cards close to its chest on whether it would be interested in bidding for Swiss private hospital group, Hirslanden.
Rumours have it that private equity group BC partners is readying Hirslanden for a sale that could see it fetch £1.5 billion. Barchester, backed by Dermot Desmond, JP McManus and John Magnier and chaired by former Kerry Group chief Denis Brosnan, could be interested in the group if, as expected, it comes up for auction. Barchester has been expanding rapidly, but whether it's willing to take a step as far as Switzerland is an unknown.
Private equity houses such as Apax Partners and Cinven are also perceived to be potential buyers of the business, which operates 13 hospitals and six clinics. Barchester has declined to comment so far.
Familiar name in banking
The launch of An Post's new banking joint venture with Fortis remains shrouded in secrecy. It is scheduled for some time later this year. Approval from the Central Bank is still awaited. Meanwhile a revitalised National Irish Bank and the other players in the market continue to eat its lunch.
However, Current Accountis proud to reveal what may be the venture's new logo, which has been trademarked along with the name. Whilst the stunning originality of the name takes the breath away, students of European banking will no doubt be aware that a German bank of some significance also has this monicker. However, the German Postbank observed a dignified silence when Current Account inquired this week as to how it felt about developments in Ireland.
But then again what about the Postbank in the Netherlands, or Postbank in Bulgaria, or even the South African Postbank? And then, of course, there is Postbank in New Zealand?
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