Staying power

THE FRIDAY INTERVIEW:As Tom Moran tells it, his €1.1 billion hotel empire in Ireland and Britain has come together more by accident than by design.

Twenty years ago, Moran travelled to Dublin from his native Limerick - where he was a publican - to meet up with some pals.

One of them, Gerry Foley, persuaded him to go to an auction the following day in Ballsbridge, where a certain Red Cow Inn was on the blocks.

The Red Cow was doing a then frothy £26,000 (€33,000) a week in turnover. "I went to the auction but I had no intention of buying the Red Cow," he recalls. "But before I knew it, I had my hand up and was bidding a million pounds."

A few minutes later, the Red Cow was his. "I didn't have neither the deposit nor the solicitor," he says with a wry smile.

Moran didn't even have his chequebook with him and when he rang his Bank of Ireland branch in Kerry and told the assistant manager that he needed a deposit of £100,000 by the close of business that day, the line went dead.

"I said, 'are you still there?', and he said back to me, 'I think you'll have to speak to Jim [ the manager] about that'."

Moran never did get to speak to the manager, but he did close the deal that day and the rest, as they say, is history. He later spent more than €1 million acquiring adjoining land at the Red Cow site to build the seven-acre complex of today, which also accommodates a 123-bed four-star hotel, conference centre and leisure facilities.

He plans to spend €90 million on the site, adding a 475-bed hotel and 2,000-capacity conference centre.

And almost two decades on from the Red Cow bid, Moran has sealed the €700 million acquisition of six Bewleys hotels from Bert Allen.

Moran originally had his heart set on acquiring the Great Southern Hotels from the Dublin Airport Authority. He bid for the entire chain but narrowly missed out, as the airport manager broke up the assets and sold them to a variety of investors.

"I was very disappointed personally about that at the time," he recalls.

Moran then turned his attentions last summer to the Bewleys chain, owned by Allen. "I thought it was a very well-run business with plenty more potential," he says.

With that, Moran does a quick trot around the Bewleys properties he has just acquired: Dublin airport is "very successful"; Ballsbridge is "phenomenally successful"; Leopardstown has "massive potential", and so on.

It says a lot about Moran that he could pull off a €700 million deal backed by a syndicate of banks - comprising AIB, Bank of Ireland, Bank of Scotland (Ireland) and Ulster Bank - at a time when credit is being squeezed and economic growth is slowing.

The banks have stumped up about 59 per cent of the asking price in debt funding.

"There were banks in America and Germany interested as well, but I'd have had to travel there for meetings and I didn't want to do that."

This is a transforming deal for the Moran group. In one fell swoop, its chain has more than doubled in size to 10 properties, with 2,600 bedrooms. It now employs about 1,350 staff.

Between them, the properties are expected to achieve turnover in the 12 months to the end of March 2009 of €175 million, and earnings before interest, tax, depreciation and amortisation (ebitda) of about €60 million.

Without the Bewleys hotels, Moran's four original properties - the Red Cow, Silver Springs in Cork, and two sites in London - were achieving ebitda of about €10 million a year on revenues of about €37 million.

This is all a long way from Moran's humble beginning as a pub landlord in London in 1970. He was just 20 when took over the Man of Kent pub. "I was the youngest publican in England at the time," he says.

He went on to manage other brewery-owned pubs in London, while building a large nest egg from dabbling in property.

Moran returned home in 1979 with a healthy bank balance to "rear my kids in Ireland".

With money in the bank, he also had a vague notion that he would "take it easy", but that thought quickly went out the window and Moran bought a pub in west Limerick for £130,000 in cash.

"I decided just to keep an interest in the business," he says modestly.

Moran bought a second pub for £145,000 in a nearby village, again using his own money to finance the deal.

"To tell you the truth, I didn't know what it was like to borrow money at the time," he explains without a hint of arrogance or exaggeration.

It was the era of the showband and his venues regularly hosted Joe Dolan, a young Daniel O'Donnell and comedian Brendan Grace, who has remained a friend.

That business began to wane in the late 1980s and Moran switched his focus to Limerick city, buying Jack Burke's pub.

Like many of his contemporaries - Louis Fitzgerald and the O'Dwyer brothers Liam and Des, to name but a few - his focus has recently switched away from pubs and towards hotels.

Moran says business remains strong in spite of the slowdown.

"All I can tell you is that, in the first two months of this year, Cork was up 15 per cent; Dublin was up 8 per cent; and the UK was up 11 per cent," he says. "There's a softening in the market but we haven't found it in our properties."

This might partly be due to the relatively small size of the four-star Moran hotels. The Red Cow has just 123 rooms, while the Silver Springs has only 109. Demand regularly outstrips supply.

"Every year is a difficult year but we're ready for the challenge and we're very confident that we can increase the business," he says.

The focus is on successfully merging the Bewleys and Moran hotel businesses. "We're not interested in buying anything else at the moment," he says.

The business is very much a family affair. Six of Moran's seven children have senior roles and shares in the company. "They all decided for themselves that they wanted to join the business; I never decided for them."

Moran will be 58 this year but still puts in a 12-hour working day, starting at 8am each morning.

His escape hatch is sport. He sponsored the Limerick hurling and football teams for six years and a bunch of autographed hurleys occupies one corner of his office at the Red Cow hotel.

Despite this interest, Moran declined an offer to join the Drumaville consortium that bought Sunderland football club a couple of years ago as he was preoccupied with his bid for the Great Southern Hotels.

Looking to the future, Moran has no thoughts of retirement. "Don't be ridiculous," he says. "Sure I'm only starting . . . I enjoy what I do too much."

ON THE RECORD

Age:57

Family:Married to Sheila with seven children

Lives: Rathfarnham, Dublin

Hobbies:Keen follower of hurling, football and rugby

Something you might expect:Six of his seven children work in the hotel business. His youngest son, Brendan, is studying law at TCD.

Something that might surprise:He has recently taken up cycling