TROUBLE BREWING AT KARELIAN DIAMONDS
AT THE age of 86, Dick Conroy is running two mineral exploration companies – Karelian Diamonds and Conroy Gold and Natural Resources. Both of these have been the subject of dissident shareholder activity, with Karelian currently in the sights. It seems likely that, as with the Conroy Gold standoff in 2017, this battle will prove a bruising one. But the smart money is on Conroy to emerge intact, despite the fact that Karelian’s share price remains a fraction of what it appears to be worth.
Read more about the ‘Trouble Brewing at Karelian Diamonds’ here.
NAMA’S 10 TERRIBLE YEARS
FALCON OIL HOPING FOR GOOD NEWS DOWN UNDER
FRACKING is a hugely controversial issue in this country and elsewhere. The Australian government introduced a moratorium on hydraulic fracturing in September 2016 – a move that badly affected Falcon Oil & Gas, which has been managed by Philip O’Quigley since he was appointed CEO in May 2012.
With the moratorium lifted, Falcon is heading into the latest phase of drilling down under and the results will be eagerly awaited by the hapless shareholders who are feeling bruised.
Read more on this story here.
O’LEARY UNSCATHED BY RYANAIR’S PROFIT TAILSPIN
ANNOUNCING RYANAIR’S results for the year to March 2019, Mick O’Leary tried to minimise the negatives while advising that earnings had fallen a very hefty 29% from €1.45bn to just on €1bn. These are not the full figures as they exclude the impact of Laudamotion (Lauda), the Austrian airline set up by Nicki Lauda, which Ryanair bought last year. Moreover, what must be of most concern for Ryanair shareholders is that the airline is heading for a huge drop in profits next year. How long can O’Leary continue to chart Ryanair’s course?
Read more about this story here.
AMINEX SHARES FAIL TO REFLECT POTENTIAL IN TANZANIA
AMINEX HAS farmed out the development of its gas discovery in Tanzania with a $105m development deal, wherein it is fully carried through to full production and looking at a potential distributable annual $40m net cash flow in two years. The stock market has, however, responded in a contradictory manner, with the share price falling steeply from the 7p it hit two years ago in March 2017, just after it succeeded with its second successful gas discovery well in its onshore Ruvuma gas field.
The shares are at just 1p. This is hard to explain given the two successful discovery gas wells, with a third appraisal well about to be drilled onshore, followed by a fully funded six-well development and a pipeline development programme. Indeed, Aminex shares appear to be incredibly low risk.
NAMA: THE ‘PROFIT’ AND THE CRISIS
BRENDAN McDonagh and Frank Daly – chief executive and chairman respectively of Nama, kept straight faces yesterday when announcing that the bad bank would earn a €4bn surplus by the time it winds up (some time in 2021 apparently).
It takes some impressive contortions to arrive at a ‘profit’ figure of approximately €4bn given that Nama acquired a stock of property loans with a nominal value of €74bn for €32bn – ie a discount of 57%. It is only by completely ignoring this €42bn write-down that enables Daly to refer to a figure of €4bn “assuming market conditions remain favourable”. The reality, of course, is that Nama (the taxpayer) will lose €38bn.
Going through the looking glass like this puts a major gloss on Daly’s near 10 years in the Nama chair – a period that should have enabled Nama to return something like the full €74bn given market conditions – but what is harder to avoid is the starring role that Nama played in the shocking housing crisis in Ireland, particularly in Dublin.
Goldhawk previously examined Nama’s modus operandi.
TOTAL PRODUCE’S DOLE PROBLEM
INVESTORS IN Total Produce would be forgiven for not getting the full picture from the 2018 annual report. The acquisition of only a 45% stake (so far) of the giant Dole fruit business means the results do not have to be fully consolidated. As a result, missing from the picture are Dole’s huge borrowings, which have already had an impact on Total Produce’s returns.
This should be of concern to shareholders as it is not yet clear if Carl McCann will be able to sort out the US giant. Certainly, the market has taken a sceptical view to date, with the shares falling 36% in 16 months.
Read Goldhawk’s analysis in the latest edition of Moneybags.
TOASTING STEPHEN GLANCEY AT C&C
Drinks behemoth C&C has said that competition in the Irish cider market has made the company “sharper”.
Back in February, Goldhawk analysed how C&C’s strategy started to pay off. Read more on this story here.
CHOPPY WATERS IN STORE FOR ROTHWELL’S ICG
LAST YEAR was a bad one for Eamonn “Rottweiler” Rothwell’s Irish Continental Group (ICG). He is now looking to bounce back, but the shares will remain on a demanding price-earnings multiple at a time when competition is heating up on the Irish Sea.
Read more about it in the latest issue.
And you can read Goldhawk’s June 2018 profile of the Rottweiler here for free.
GREEN REIT SALE DOESN’T MAKE SENSE
THE ANNOUNCEMENT by Steve Vernon on April 15 that the Green Reit board “has taken a decision to initiate a process for the sale of the company or its portfolio of assets” came as a real surprise. What should happen now, rather than selling out, is that the board of Green Reit should remove Vernon and CEO Pat Gunne from the board, cancel the expensive service contracts with the group’s ‘investment manager’ and start running the company under normal commercial conditions.
Read more in the latest edition of Moneybags.
And if that’s not enough, you can read Goldhawk’s previous analysis of the company’s underperformance and the very generous rewards on offer to the principal’s from last November here for free.
IAN CURLEY’S EXIT
FOLLOWING the announcement of the impending exit of Malin Corp executive chairman Ian Curley, read Goldhawk’s October 2018 analysis of the company’s recent turbulence below.
BAD MEDICINE AT MALIN CORPORATION
THE SAME week that Malin Corporation had its explosive AGM (September 13), Don Panoz – the founder of its predecessor company, Elan Pharmaceuticals – died at the age of 83. He set up Elan Pharmaceuticals, where New York banker Kelly Martin eventually took charge before selling the company to Perrigo for $7bn in June 2013. The latter’s record at Elan was mixed and shareholders in his subsequent venture, Malin, have had little to cheer. Martin is no longer CEO, but the company looks a very long way from delivering any return.
THE INCREDIBLE €240M CASH TAKEOUT OF IFG
AHEAD OF IFG’s final AGM, read Goldhawk’s analysis of the company’s audacious sale in the latest issue below.
The £200m Elysian Fuels controversy is still unresolved and a further £5m provision has had to be made to cover potential further sanction charges and mediation costs on foot of the group’s dual trustee book, of which only 20% has been reviewed, although these costs are extrapolated from this review. Against this background, it is surprising that the new chairman, Mark Dearsley – who replaced our own John Gallagher in May last year – and Kathryn Purves, the new CEO, who replaced John Cotter last April, have done such a remarkable job. Not only have they worked to clean up the mess but, more importantly, negotiated a fantastic €240m cash takeout of IFG by Alex Fortescue’s Epiris private equity fund. Tony Smurfit could learn a thing or two.
Read the full analysis in the latest issue out now.
And you can read more about IFG here for free.
WHY I-RES SHOULD END THE CANADIANS’ SWEET DEALS
I-Res Irish CEO Margaret Sweeney
IRELAND’S HOUSING crisis has provided opportunities for certain players, notably Irish Residential Properties Reit (I-Res), where the Canadian founders have been doing very well for themselves, not least courtesy of lucrative management service contracts.
Read more in the latest issue.
And if that’s not enough, you can read even more about I-Res here free of charge.
ALBERT MANIFOLD’S €8 MILLION
NOT TOO surprising to see former Bank of Ireland boss Richie Boucher defending the whopping €8m remuneration package of CRH’s chief executive, Albert Manifold. This is an eye-watering sum, especially for a CEO who has just delivered an annual report that features a number of negatives for 2018, a year during which the share price dropped 25%.
Although Manifold’s record in CRH has been impressive, particularly in terms of divestments and acquisitions, the latest results show problems in Asia, where CRH’s only major wholly-owned operations are in The Philippines. The returns here have been awful, even dropping into losses (€14m) last year.
The big problem, however, has been in the European distribution division, which had been doing well, but last year suffered a significant collapse in adjusted operating profits of 46%. CRH now appears to have placed this division quietly on the market (still unconfirmed) and business hacks have been briefed with a €2bn price tag based on earnings. This is at least €1/2bn more than it might actually be worth, given that last year’s earnings included the Benelux DIY division that was sold off last July.
Happily for Manifold, the head of the remuneration committee, Boucher, was more than impressed with the CEO’s performance, describing him as “very good”. And, it is not only Manifold who is doing alright for himself at CRH. Chairman Nicky Hartery earned almost €600,000 in 2018, which must look very tempting to Boucher – a strong contender to take over from Hartery, who has been on the board for 15 years.
And you can read more about Manifold and CRH here for free.
DATALEX’S TURBULENCE SHOULD NOT SHOCK
PIC: Datalex CEO Aidan Brogan
Fans of Goldhawk will not be surprised by the news that shares in the company plummeted by 20% yesterday. The Phoenix raised questions about Datalex’s accounts 16 months ago.
Read January 2018’s Moneybags analysis here to find out more.
Fans of Goldhawk will not have been too surprised by the €600,000-plus fall in remuneration for the loaded boss of Irish Continental Group boss Eamonn Rothwell, whose performance on the bridge has been far from assured over the last year.
As our profile noted, “the Rottweiler needs good news to justify his extraordinary remuneration,” but the shares today are down 18% on their high of €6 in 2018. For the record, the performance-related aspect of Rothwell’s pay was €1.6m in shares.
Read our profile of the ICG moneybags here for free.
KENMARE RESOURCES INCREASINGLY TEMPTING AS TAKEOVER TARGET
PIC: Mick Carvill
Things are looking good for Kenmare Resources with outturn last year of $262m in sales and ebitda of $93m.
Read the full article in the latest issue out now. And you can read Goldhawk’s prediction from last year that Kenmare Resources “should manage to hit sales of nearly $250m in the current year. This increased revenue would drop straight to the bottom line and increase Kenmare’s ebitda to $100m” here for free.
O’BRIEN COULD GET €100M IN INM TAKE-OUT
IT IS hard to believe the news emerging of a pending takeover bid for Independent News & Media (INM). With Denis O’Brien sitting on a 30% shareholding and his pal, Dermot Desmond (invited in at a hefty discounted 7c a share five years ago), sitting on a further 15%, these two will have a very big say in any potential deal.
Read more in the latest issue out now.
And you can read all about ‘Whose afraid of Denis O’Brien’ here for free.
BIG REWARDS BUT SMALL RESULTS AT GREEN REIT
PIC: Stephen Vernon
Green Reit has been put up for sale causing a long overdue spike in its share price.
Read Goldhawk’s previous analysis of the company’s underperformance and the very generous rewards on offer to the principal’s.
WILL GRAFTON TAKE OUT CRH’S EUROPEAN BUSINESS?
SINCE TAKING over as CEO at Grafton Group in 2011, Gavin Slark has too partially fulfilled former boss Mike Chadwick’s ambition to lessen the company’s dependence on the British Isles by expanding into mainland Europe, building up significant footprints in Belgium and The Netherlands. Now though he needs to pull off a deal of serious scale to push the group on to the next phase. That deal could very well involve CRH.
Read all about it in the latest issue of The Phoenix.
You can also read about Gavin Slark’s appointment as Grafton chief back in 2011 for free here.
PADDY POWER’S US BET MAY NOT PAY OFF
Will Paddy Power’s US bet pay off? Read Goldhawk’s analysis in the latest issue to find out more.
You can also scan through this previous article that explores the betting giants pursuit of the “Yankee Dollar.”