Covidius horribilis: Business winners and losers of 2020
Coronavirus meant the end for many firms, while others adapted and prospered
Ryanair flew into the pandemic with a relatively strong balance sheet. Photograph: Eric Luke
How do you weigh up the annus covidius horribilis of 2020 in words that don’t have to be asterisked?
It was a year when a virus inflicted a brutal end on some businesses, and tortuous stop-starts or finance-draining freezes on others. Some were able to pivot to survive, others found silver linings amid the spike proteins. But for many the pandemic was the kind of extended disaster for which no amount of crisis planning could have helped.
Good King Wenceslas himself would have looked out the window at the state of 2020 and crawled back under his duvet.
With uncertainty the new certainty, employment was often precarious by default and “forward-looking statements” were rendered works of speculative fiction. By the time the second wave came along, once-buoyant businesses seemed weary and depleted and in the most Covid-wracked sectors, the despair was palpable.
Ryanair is the biggest airline in Europe, which in normal years is great, but in 2020 put it on the front line of an aviation standstill. At the start of March, Michael O’Leary’s airline cut a quarter of its flights to and from coronavirus-hit Italy for three weeks because bookings had plummeted amid passenger nerves and a blizzard of travel advisories.
On the same day, Leo Varadkar assured that there were no plans to cancel the St Patrick’s Festival, but with the caveat that March 17th was still two weeks away, “and a lot can happen between now and then”.
Indeed, by the time St Patrick’s Day came round, Ryanair was stripping back its schedule by 80 per cent, three-quarters of Aer Lingus flights were not taking off and struggling regional airline Flybe, which operated four in five of the flights at Belfast City Airport, had collapsed into administration.
Ryanair flew into the pandemic with a relatively strong balance sheet but it still could have done without the tripling of its debt and a winter travel “write-off” that brought the closure of its Cork and Shannon bases. By this point, O’Leary was railing against what he saw as “government mismanagement of EU air travel”.
Any holidaymakers who made it to Ireland this summer were at high risk of becoming prime Liveline fodder, which was bad news for hotels, restaurants and everyone from Airbnb hosts to the company behind the Viking Splash.
At the pub end of the hospitality trade, the bleakness was unavoidable. In Dublin, the third of pubs that weren’t in a position to produce €9 chicken wings never reopened while, outside Dublin, almost half of pubs could only do so for a fortnight.
For companies dependent on the night-time economy, dawn was forever postponed. “How many people do we have to marry to open this place,” read the signage on the Academy gig venue.
The Press Up hospitality group, which has built a veritable empire of 55 restaurants, bars and hotels, wasn’t the only company aggrieved at public health policy, but it was the one with both the desire and resources to mount a legal challenge. The group, run by Paddy McKillen jnr and Matt Ryan, sued the Government, seeking both compensation and a High Court declaration that the restrictions were an unconstitutional interference in its business.
So could pubs forced to close claim on their insurance for business interruption? Not if FBD had anything to do with it. Despite the assurance of cover that one of its executives accepted he had given Lemon & Duke publican Noel Anderson, FBD’s position was that it did not offer pandemic insurance and never had.
Early 2021 will bring a High Court judgment on four test cases brought by publicans, including Anderson, on FBD’s refusal to pay out. But even if FBD wins, the dispute has left the bitterest of tastes.
With one-time office workers dispersed to attic desks and ironing-board workstations, it wasn’t the best of years to be big in the food on-the-go market. As Christmas neared, Greencore’s website hosted an animated corporate video showing a tree being decorated with sandwich packs, which was certainly one use for them.
In November, as the Dublin-headquartered company conducted a share placing to raise cash, chief executive Patrick Coveney said Greencore had been “absolutely smashed” by the first lockdown and would not recover until at least 2022. Indeed, it was still reeling from the spring slump in sales of its pre-packed sandwiches when almost 300 workers at its Northampton factory tested positive for the virus.
In retail, it was a tale of two categories, “essential” and “non-essential”. Supermarkets rose to the challenge, their staff effectively becoming front-line workers during the first lockdown. Later, DIY chains like Grafton-owned Woodies were the beneficiaries of a home improvement boom: with nowhere to go, nesting was in vogue.
But for other bricks-and-mortar retailers, 2020 was miserable, and the list of casualties was long: Oasis, Warehouse, Monsoon, Pamela Scott, Mothercare Ireland and Cath Kidston all disappeared from Irish streets, while the administrators of Topshop owner Arcadia spent December trying to find buyers for its fashion brands.
The biggest loss, however, was department store chain Debenhams. The liquidation of its Irish operations in April inspired protests from former staff shocked that their years of service would not be treated with the respect of a redundancy payout.
Their fight was not entirely in vain: after an invention by a mediator, the Government will set up a €3 million training and upskilling fund to assist the 1,200 workers who lost their jobs. But the sad sight of black sacks covering the Debenhams sign on Dublin’s Henry Street, one sack for each letter, summed up the sorry end.
The surge in working-from-home / living-at-work was good news for those telecoms companies that could keep up with demand. Alas, this was not the case for Eir, which provided a textbook example of Covid-19 exposing organisational weaknesses that long predated it.
Frustrations about former State monopoly’s shortcomings on customer service spilled over in a year in which many people across the State were dependent on a decent broadband signal to keep their jobs and see their grandkids. Complaints rocketed exponentially.
“We have never had fantastic [customer] care in Eir,” admitted chief executive Carolan Lennon as she apologised for “below par” service. Unfortunately, her explanation of the challenges in bringing the function in-house included a declaration that establishing a customer care centre on a greenfield site in Sligo had been a “mistake”. Suffice to say, the remark did not go down well in Yeats country, where CEOs are best advised to tread softly.
Incredibly, there were some who had a 2020 to forget for reasons unconnected to Covid-19. Such was the case for the perennially under-resourced Data Protection Commission (DPC), led by commissioner Helen Dixon, which made Twitter’s day by fining it a mere €450,000 for a December 2018 data breach in which it inadvertently made some users’ private tweets public. Insert screaming-with-horror-face emoji here.
With this first fine under the EU’s General Data Protection Regulation (GDPR) a mere 0.016 per cent of Twitter’s 2019 revenue, other more punitive-minded EU regulators are now said to be exploring ways to get around the DPC’s status as lead regulator for the tech giants that have their European headquarters here. If they do, the office may no longer seem quite so under-resourced.
One leading Irish business, meanwhile, had its inner workings on dismal display at the London inquiry into the 2017 Grenfell fire tragedy in which 72 people died.
Kingspan chief executive Gene Murtagh told employees that it would take time to rebuild trust in the building materials company after “undeniable historic shortcomings” were revealed at the inquiry, which heard that Kingspan had some years previously relied on results from flawed safety tests to market its Kooltherm K15 insulation product. Some of it was used on Grenfell’s cladding.
The inquiry has not yet concluded, but Kingspan’s internal communications to surface in recent weeks – including one senior figure’s suggestion that a builder who questioned K15’s safety should “f*** off” – have been distinctly grim.
Deals and payouts
But before we bin 2020 never to discuss it again, let’s also look back on those who managed to rack up a bright note or two amid the general gloom.
It is 31 years since Anne Heraty co-founded recruitment company Computer Placement Ltd, better known as CPL, and 21 years since it was floated, making Heraty the first female chief executive of an Iseq stock. In November, CPL agreed to be taken over by Japanese group Outsourcing for about €318 million in an all-cash deal.
That put Heraty and her husband and fellow director Paul Carroll in line to receive €110.9 million for their combined 34.9 per cent stake. Not bad in the middle of a global recession.
Indeed, this was a positively upbeat year for Irish tech sector, which was cutting deals with the sort of modest confidence in which the numbers did the talking. Back in the before-times (January), for instance, Irish chipmaker Decawave was sold to US-based Apple supplier Qorvo for $400 million (€361 million), putting its staff in line to share a €54.4 million payout.
The company, founded in 2007 by Ciaran Connell and Michael McLaughlin, specialise in a sort of “Bluetooth on steroids” that is now being used in iPhones. “It has become a big boys’ game,” said Connell.
Also sticking them with the pointy end was, well, Pointy. The company that helps small retailers make their online stock visible, founded by Mark Cummins and Charles Bibby in 2014, was sold to Google for a reported $160 million (€135.9 million).
Amazingly, this was the second time that Cummins, who was once turned down for a job at Google, had found a buyer in the tech giant, which had earlier acquired his start-up Plink in a “life changing” deal.
Elsewhere, Apple acquired Peter Cahill’s voice recognition company Voysis for an undisclosed sum and is now using its technology to help improve its virtual assistant Siri, while 2017 Young Scientist winner Shane Curran raised $16 million (€14.5 million) from Silicon Valley investors for his data privacy tech company Evervault – an impressive achievement to rack up before you have even hit your 21st birthday.
Nine-year-old Waterford software solutions company NearForm, led by co-founder Cian Ó Maidín, had a 2020 to remember thanks to its work with the HSE on the Covid Tracker Ireland app.
After getting the call on the sunny Sunday afternoon of March 22nd, the NearForm team “pushed hard into the night” to present a prototype the next morning and, after three months of intense yet fully remote development, the app was ready. Within 36 hours of its launch on July 7th, it had been downloaded more than one million times.
The app’s open source code, Covid Green, is now being used around the world and, yes, the company is hiring. “We did something really good this year at NearForm – we really did,” Ó Maidín tweeted in December. “So proud of everyone.”
It’s enough to make even the most jaded of hearts feel emotional.
Never Mind the B#ll*cks, Here’s the Science could scarcely have been a more timely title for the bestselling new book by immunologist Luke O’Neill. Prof O’Neill was one of the leading voices on Covid-19, but he was in the news for another reason after Swiss drug giant Roche paid $380 million for Inflazome, the inflammatory diseases treatment company he co-founded in 2016 with Australian chief executive Matt Cooper.
The money was “obviously nice”, Prof Cooper told The Irish Times, but it wasn’t what had motivated the biotech entrepreneurs. “We do what we do because there are people that need the medicines and that’s the most important thing.”
Inflazome was the product of something that couldn’t happen for most of 2020: a chance meeting in a bar after an international medical conference. For all the addictive magic of Zoom, the business world will see in 2021 hopeful that vaccines will bring about a return of lanyard-wearing days, airport priority queues and opportunistic coffees.
Reclaiming the ability to move safely around the world, free of the cycle of lockdowns and reopenings and without fear of sudden border closures, has never felt such a huge ambition.