Ciará Hancockon troubles for an Irish developer in Florida, Perlico's challenge to Vodafone, UTV misses out again, GreatGas opens six new forecourts and Johnston Press's Irish woes
Kelly's Florida condos well behind schedule
AS A regular reader of the Florida- based Sarasota Herald Tribune, we were interested in a recent article on Paddy Kelly's $1 billion Sarasota Bayside development.
Kelly told the Tribune that it would be 2012 before the first of four high- rise towers was completed, putting it years behind schedule.
It also reported that Irish American Management Services would have to charge "hundreds of thousands of dollars" more than it had planned for each condominium. This is based on carrying costs for the land and a redesign that will see the number of residential units reduced from the 700 that were approved last year.
"We plan to begin as soon as is practical," Kelly told the Tribune. "That's our aim, but sales will have to precede any building."
He added that construction on a 35,000sq ft sales office was likely to begin later this year and open in the autumn of 2009.
Kelly also told the paper that the real estate downturn had soaked up most of the equity that the Irish investors injected into the project. More than $100 million was spent buying 15 acres on the waterfront that comprised the Sarasota Quay, the El Vernona condos and the Belle Haven Hotel.
The Irish consortium was put together by Kelly with backing from Anglo Irish Bank. Kelly has had his share of difficulties at the Bayside project, which will include retail and restaurants. He is being sued for alleged delinquency on a $7.7 million loan while one occupant of a condo on the site refused to vacate until the Irish group paid compensation.
GreatGas gathers steam
WITH THE oil majors either quitting or scaling back their forecourt operations here, it has been left to local players to take up the slack.
Topaz, which is backed by Denis O'Brien, is busy rebranding its recently acquired Statoil and Shell stations across Ireland at a cost of €50 million.
Cork-based GreatGas is also getting in on the act. The independent, founded in 2006 and led by Gerry Murphy and Ray O'Sullivan, has signed up six forecourts in a deal that it says is worth €15 million.
This brings to 50 the number of service stations supplied by GreatGas and it plans to double this by 2010 in a move that would see it expand beyond its traditional heartland of Munster.
The latest additions are in Cork (Castletownbere and Rosscarbery), Galway, Laois, Monaghan and Wexford. Their recruitment should help the Mallow-based oil group to achieve its stated target of reaching "cash-flow breakeven" by early 2008.
Unlike its bigger rivals, GreatGas only requires forecourt owners to sign up to a one-year contract rather than tying themselves to the longer deals that other operators traditionally seek.
It also offers marketing supports and price incentives.
"This is a major selling point as most other suppliers will only offer long- term contracts that are often very restrictive," says managing director and major shareholder Ray O'Sullivan.
Filling stations are a tricky business. Tight margins at the pumps must be supplemented by a good retail offering.
GreatGas claims that owners who have rebranded with it have seen turnover rise by an average of 22 per cent, while some outlets have boosted fuel sales by up to 195 per cent. "We are confident that these [six] new forecourts will achieve similar success in the coming months," says O'Sullivan.
Perlico, Vodafone get wires crossed
IT IS 10 days since Vodafone trumpeted its arrival into the fixed-line telecoms business.
It promised to shake up the market to provide real competition to Eircom and value for money to consumers, backed up by an investment of about €15 million.
For just €49 a month, Vodafone At Home would give subscribers a 2MB always-on broadband service, telephone line rental and free local and national fixed-line calls.
In addition, customers would get free calls to three Vodafone mobile numbers and there would be no connection fee.
Add an extra tenner and you could get a faster broadband connection.
Vodafone Ireland chief executive Charles Butterworth told The Irish Times that consumers would save "well north of €100 a year" on comparable Eircom packages.
Happy days.
Imagine my surprise then when earlier this week I received a flyer from Perlico, a fixed-line provider acquired by Vodafone last November for €80 million.
It had "great news" for me. For just €39.99 a month, I could get a fixed-line phone and always-on broadband service.
The price covers line rental, unlimited local and national calls and free international calls (any time) and free calls to any Irish network mobile phone.
They're also throwing in a free modem - Vodafone is charging €49 for same.
In all, Perlico promised to save me up to €370 a year on my Eircom bill and it would take just five minutes to activate.
Sounds great, although it's probably too good to be true - the small print looks menacing.
Still, it beats the socks off the product being puffed by its parent.
And it makes you wonder what all the fuss was about.
Virgin without its good name is not for UTV
ANOTHER MAJOR UK radio company changed hands this week and once again UTV missed out. The Belfast media group was one of three bidders for Virgin Radio, which SMG sold this week for a cut-price £53 million to Indian group TIML Golden Square.
The new owner will lose the Virgin name and have to invest £15 million on a different brand. This deal came hot on the heels of the sales of Chrysalis and GCap to Global Radio, backed by John Magnier and JP McManus.
All these companies would have been a good fit with the Wireless Group, which UTV owns. UTV boss John McCann has no regrets. "There's some very racy multiples being paid for these businesses," he said. "We would have liked to acquire it [Virgin], but we wouldn't have done it without the name. Good luck to them."
Will Johnston sell Irish assets?
SOME GOOD news recently for Irish employees of troubled British media group Johnston Press, which received an emergency injection of funds. This included £86 million from Malaysian billionaire Ananda Krishnan, who has taken a 20 per cent stake.
Poor trading and hefty debts contributed to Johnston Press's share price collapsing from more than £4.20 in June last year to a current level of about 72 pence.
It owns a large portfolio of newspaper titles here, including the Leinster Leader, the Limerick Leader and the Kilkenny People.
Its €139 million takeover of the Leinster Leader titles in December 2005 raised more than a few eyebrows on both sides of the Irish Sea as it represented the highest multiple of profits for a regional newspaper here.
Accounts just filed for Leinster Leader Ltd don't make for pleasant reading. The Irish publisher made a loss of €1.3 million in 2006, its first year of ownership by Johnston Press. This compared with a loss of €3.3 million in 2005. Turnover declined from €6.8 million to €5.1 million over the same period, due to the stripping out of "discontinued operations".
It's not a great time to be selling a business, but what odds on Krishnan and his fellow investors putting the Irish assets back on the market?
