Dublin viewed as finance haven

Dublin viewed as finance haven

As Brexit continues to take over almost all news sources, there has been some positive results occurring due to the uncertainty. Although very minor in the overall machine that is Brexit, Dublin has seen a huge influx of businesses and operations moving from London.

Both Tech and Finance firms have seen Dublin as a safe bastion in which to move and/or continue operations. This can only mean more business for Ireland and other finincial hubs throughout the EU.

The uncertainty of Brexit negotiations, Ireland’s favourable tax system and existing business relationships have all been positive markers for Dublin.

We have already seen policy changes in companies such as Aviva and positive feedback from numerous tech firms asserting Dublin’s vital position in operations throughout Europe.

Almost 300 companies have moved staff and assets to Dublin and other financial hubs within the EU. Most of this has occured in the past few months in preparation for Brexit.

A report by New Financial has shown the huge impact Brexit has had on the financial sector and of moves taken by companies to ensure a smooth transition no matter the political outcome of Brexit.

The Think Tank noted most of the firms were asset management firms, which would make sense as they would have international investors who may not deal solely with the UK. Other cities whcih also saw an influx of companies including Luxembourg and Amsterdam.

William Wright, founder of New Financial, said the hit to London was bigger than expected and would get worse.

“Business will continue to leak from London to the EU, with more activity being booked through local subsidiaries,” William Wright said.

“This will reduce the UK’s influence in European banking and finance, reduce tax receipts from the industry, and reduce financial services exports to the EU,” he added.

New Financial believe London will remain a key financial centre but that this may wan over time. This may occue due to more favorable operting proceduews in the EU or through neccesity.

Dublin emerged as the definitive winner from the Survey as over 100 companies have made efforts to relocate here. This is far above other centers such as Amsterdam and Luxembourg.

“The report finds that banks have moved, or are moving, about £800 billion (€934 billion) in assets from the UK to the EU, which represents nearly 10 per cent of the entire UK banking system” reported the Irish Times.

Big insurance firms including Aviva and Phoenix Life have also transferred significant chunks of business to Dublin, moving £30 billion in assets.

Aviva also recently had policy changes which have allowed it to move most of its HQ operations form the UK to Ireland so existing systems remain the same and operations continue as normal. Irish Times

Why Dublin?

With so many strong financial hubs within the EU, some people may be questioning why Dublin?

There are of course the pragmatic reasons such as strengthening existing companies ties to the city, common language and favourable tax systems.

Dublin is also an existing home to a large number of tech companies which operate out of Dublins silicon docks. There is also a talented workforce pool, continued residential and commercial development and a high quality of life compared to some other cities in the EU.

A recent survey by consulting group Mercer found Dublin in the top 50 for ‘Quality of Living’ placing it ahead of cities such as Paris. The survey looked at things such as public transport, housing availability, culture etc.

The Irish capital was the highest ranked city for quality of living in both Ireland and the UK, followed by London (41), Edinburgh (45), Glasgow (48), Birmingham (49), Aberdeen (57), and Belfast (64) recorded the Independent.

Dublin scored high in relation to political stability, the environment and cultural inclusion. There were some areas of improvement noted in transportation and education, however, these were deemed minor in comparison to the overall survey.

Commenting on the results, Noel O’Connor, a consultant for Mercer in Ireland said: “Dublin continues to score highly for quality of living and safety in this year’s rankings. As the potential effects of Brexit continue to evolve it’s important that Dublin sustains its position as an attractive location for multinational organisations” noted the Independent.

Although this survey has no direct impact upon financial firms setting up in Ireland, it is a good indicator of some reasons why Dublin has been chosen over other locations throughout the EU.

With so much negative news emitting form Brexit, such announces New Financial and Mercer are welcome.

Boeing model grounded

Boeing model grounded

The latest Boeing model 737 has been grounded throughout the EU and a host of other countries around the world. This is in the wake of two fatal crashes in the past six months.

The most recent crash claimed the lives of 157 people including one Irish passenger, 39-year-old Micheál Ryan, a married father-of-two from Co Clare. He worked for the United Nation’s World Food Programme and was among 19 UN employees on the flight.

As the new model 737 is seen as a trustworthy aircraft this move has come as a shock to airlines and Boeing itself.

Ryanair is one among many airlines set to take charge of the new model in the coming months. At the moment it is unclear how the grounding will affect airlines taking charge of pre-ordered planes.

Recent incidents

Ethiopia

Ethiopia airline flight 302 Crashed just six minutes after takeoff from Addis Abba and was on route to Nairobi in Kenya recorded the Irish Times. On board were passengers and crew from 35 countries.

All that is known so far, is that the pilot radioed for permission to return to Addis abab just after takeoff but did not have time to complete the manoeuvre.

Investigators have recovered two black boxes and it is hoped that this will provide quick answers as to the cause of the crash.

Indonesia

The first crash involving the 737 model took place in October in Indonesia and claimed the lives of 189 people reported Euronews. The Lion Air flight has no survivors and the exact cause of the crash is still not known.

Grounding model 737

The decision to ground the model has come in the wake of both crashes.

The Irish Aviation Authority said, “This decision has been taken based on ensuring the continued safety of passengers and flight crew, which is the IAA’s number one priority” reported RTE.

They continued that although there is not sufficient evidence, this was a precautionary move “However, as we do not currently have sufficient information from the flight data recorder we have, as a precautionary measure, issued instructions to stop any flights on Boeing 737 MAX from any operator arriving, departing or overflying Irish airspace,” it stated.

The European Union’s aviation safety agency EASA has announced the suspension of all flights in the EU by Boeing’s 737 MAX aircraft this was then followed by the US.

China, Singapore, Australia, Malaysia and Oma are among other countries to suspend the aircraft. Turkish Airlines has halted flights of its 12 Boeing 737 MAX aircraft.

Norwegian Air and a number of carriers in the Carribean also announced they would halt scheduled flights involving the 737.

US

The US had an about turn in the past couple of days as the FAA has initially stated it would take no action in regards to the Boeing model.

Some commentators believe it was in respect to action taken by China and Indonesia two of Boeings biggest customers.

Although the ban like those in other areas is only temporary the move will still have a major negative impact for the company.

Ryanair

On a smaller sclae companies such as Ryaniar will be feeling the affects of the grounding also. This week Ryanair head Michael O’Leary had said no action will be taken in regards to the model but with the EU ban this will have to change.

The company is set to take charge of two new planes in April followed by more during the summer.

It is not known how this will affect production or orders at the moment.

Boeing

Boeing is the worlds largest aircraft provider and has seen its value drop drastically over the past week due to the second fatal plane crash in recent months.

A statement released by the company insisted on its confidence in the 737 model, however, it said they also understood the position of the EU and other countries in grounding the airline.

Teams have been sent to both crash sites in an effort to speed up investigations and find a root cause for both crashes. As of yet, there is no evidence linking both incidents besides the model of each aircraft.

The model 737 comprises almost half of all orders from Boeing in the last year and it is not yet known how the latest news will affect the production of the aircraft.

The company has lost billions over the past number of days as share prices continue to drop. The grounding of the planes across the globe were definitely a huge negative indicator for the stock market. The company fell 7% on Tuesday having lost 5% on Monday past reported the Irish Times.

Ryanair makes shareholder and Boeing announcement

Ryanair makes shareholder and Boeing announcement

Ryanair and Brexit changes

Ryanair has made a number of announcements this week which may affect the operating of the company in the near future. Restrictions in regards to buying and voting right for UK shareholders and the ordering of new Boeing planes may have adverse effects on the companies operating procedures in the coming months.

It was, however, the news regarding Brexit that has stirred the most controversy in the ever interesting Ryanair.

EU Regulations

Due to existing EU regulations regarding airlines operating within the EU, UK shareholders are set to lose voting rights and the ability to attend shareholder meetings following a meeting on Frida.

Current regulations stipulate that the majority of shares must be held by those within the EU block. This has forced a number of tough decisions in recent weeks as a no-deal Brexit looks more likely.

The new rules for shareholders will put them in line with shareholders from other non-EU jurisdictions. At the moment UK shareholders account for roughly 20% of total shareholders of the company noted RTE.

While it’s still unclear how a no deal Brexit will affect flights and laws in regards to travel, Michael O’Leary wanted to be clear that a no-deal will also affect shareholders. These announcements saw share prices drop by 2% in London during the week.

These changes to UK voting rights came about following a meeting on Friday. The rules are designed to ensure the airline stays majority owned within the EU and to limit the effects of a no-deal Brexit as noted in RTE.

The rules are set to come into effect on the 29th of March. Brexit day.

Among the rules are stipulations ensuring stocks can only be sold to EU entities and that shareholders cannot buy more stock.

In a statement to the stock market, Ryanair said: “These resolutions will remain in place until the board determines that the ownership and control of the company is no longer such that there is any risk to the airline licences held by the company’s subsidiaries.”

New Boeing models

Alongside the disruption caused by Brexit, there have been concerns raised over new planes the company plans to add to its fleet in the coming months.

Following the recent Ethiopian airlines crash, there has been concern over the Boeing model 737 Max 8s jet. As this is the second crash in recent months with this specific model.

At the moment Ryanair has said there are no plans to change the order. This may change once details of the crash and its causes emerge.

“We wouldn’t take any action at the moment,” said Ryanair head Michael O’Leary in an interview with the Irish Independent.

“We need to wait and see what the outcome of the investigation will be,” said he continue.

He added: “Our first delivery is at the end of April. Like all other airlines around the world, we will follow whatever guidance comes out from Boeing and EASA on the European side.”

Earlier this week chinese airlines grounded the model and a Varibbean operator suspended all flights using the plane. Although at the moemnt there has been no negative findings.

Both Norwegian and Ethipopian airlines have also suspended flights. Although most have said this is ajuts a precaustion and they will follow the reccomendations of the aviation aithorities.

Experts from Boeing have flown to Ethipopia to investigate the cause of the most recent crash.

The crash which occurred during the week claimed the lives of over 180 people form 30 different countries. This is the second crash invovling the same model aircraft with another having occurred in Indonesia with the company Lionair.

As Michael O Leary has stated the company will follow the recommendations of the aviation authority.

Irish Victim

There was one Irish passenger among the dead, Mick Ryan from Co.Clare. Mr Ryan had been working with the UN World Food programme and was among 19 UN personnel who were travelling on the flight reported the Irish Independent.

The plane crashed into a field six minutes after take-off with no known cause yet.

The plane was travelling to Nairobi in Kenya when it got into difficulty. Other passengers were from Britain, Germany, Slovakia, France and Italy.

It is Brexit which will have the most immediate impact on the fortunes of the company especially for those in the UK who once again will be feeling the brunt of the knock-on effects of Brexit.

Superdry faces board battle

Superdry faces board battle

Superdry is facing both job losses and a battle between its board and co-founder of the company Julian Dunkerton. Both issues have arisen in the wake of a dismal year for the company which saw share prices drop by almost 70% and a huge decline in sales reported the Financial Times. Both founders of the company blame the direction of the company as the reason for the decline and are attempting to gain control of the board once more.

The board released a statement in which it said the return of Mr Dunkerton would be a huge blow to the company. This issue should be settled on April 2nd when a meeting of the companies shareholders convenes.

Decline in Superdry

Superdry shares have collapsed from a peak of 1715p a year ago to 550p this week. In an effort to cut costs the company announced 200 job cuts from its HQ in Cheltenham revealed the Standard.

A spokeswoman for the company said: “As announced at our interim results in December, we have embarked on a cost transformation programme. As part of that, we have started a process of consultation with colleagues about how it will impact our central head office functions.”

The board announced plans to cut costs by £50 million by 2022 also revealed the Standard. Having announced a number of sales warnings last year and with December forecasts way below target the company has made efforts to shore up the decline of the brand.

There have also been some rumours that the company will look at its store portfolio. This may result in the closures or amalgamation of stores.

These are just some of the reasons for Mr Dunkertons moves and announcements in the past couple of weeks.

Plans for the future

Along with the announcement of job cuts the board also made plans for the future of the brand and the style of clothing they will stock.

There have been efforts to reduce the companies reliance on jackets and heavily branded goods, something which made the company a success. The board is hoping to stock more children wear and outdoor sports leisure wear.

Plans by Mr Dunkerton

Mr Dunkerton co-founded the company in 2004 with James Holder and they still control 18% and 11% respectively.

In recent months and due to Superdry performance and announcements Mr Dunkerton has voiced his disapproval of the direction the company has taken. He has made efforts to return to the board and halt some of the changes announced recently.

Mr Dunkerton plans involve installing Peter Williams as a non-executive director noted the Chronicle. Mr Williams is currently chairman of online fashion brand BooHoo.

Dunkerton and Holder also plan to return to designing clothes for the brand. They have voiced their disapproval of the introduction of childrenswear and the use of the brand logo on clothing.

It is here that most of the problems have arisen as the board feels Dunkerton and Holders designs and business strategies are too outdated.

Bust up with the board

Following Dunkerton stepping down from the board last march, there has been constant bickering between both sides as who is the blame for the companies poor performance in 2018.

The board believes Mr Dunkerton hasn’t been honest with shareholders as they state his most recent position was that of creative director. This would have put him in the prime position for the brands stock and designs for 2018 making him one of the most responsible for sales figures in 2018.

Superdry said of Dunkertons position- “prime executive responsibility for the design direction, range selection and range build of the autumn/winter 2018 range, which contributed to the company’s underperformance” as noted in the Guardian.

Meanwhile, Dunkerton has been critical of the lead taken by Euan Sutherland. He attacked the lack of innovation in the comapnies clothing ranges and management.

The chain’s strategy of cutting the number of lines it sells has been criticised by Dunkerton. Superdry, in turn, said it has been too reliant in the past on the hoodies and jackets that were Dunkerton’s staple designs.

In the wake of these issues and the others written about in this article Dunkerton has urged shareholders to vote him back into a position of power along with Mr Williams.

However, Superdry has stated Dunkerton has not been clear about his position in the company. They say he was “nominated as a non-executive director – requiring approval from more than 50% of investors – even though he had confirmed to the board that he wanted an executive role responsible for product, brand and marketing, which would require approval from at least 75% of shareholders” recorded the Guardian.

However this plays out shall be interesting to see in the coming weeks. Will a return be possible and if so what can be changed to help Superdrys performance,

Aviva makes profit and Brexit announcements

Aviva makes profit and Brexit announcements

Aviva one of Ireland leading insurance companies have announced an increase in operating profits of almost 15% even in what it calls a difficult climate. A key sponsor of several leading Irish sports teams and stadiums, Aviva is synovitis in Ireland as one of the Irelands leading insurance companies, so this will be welcome news for those with a stake in the company.

Aviva employs almost 1300 staff in Ireland spread across centres in Getaways, Cook and Dublin. They are part of the global Aviva group which operates in 16 markets providing life insurance, general insurance and asset management services.

They are also the primary sponsor of Aviva stadium home to Irish soccer and Rugby.  They also support several grassroots organisations throughout Ireland.

Operating profits

All three primary sectors of Aviva saw an increase in their profits on the previous year as announced by their media department.

There was a 14% rise in business premiums in its Life Insurance sector, going up from €1.197bn in 2017 to €1.367bn last year.

Its pensions and protection sector rose by 31% bring its profits up from €38m to €50m.

Meanwhile, its general sector went up 4% to €63 million.

John Quinlan, Aviva Ireland Chief Executive Officer said:

“Today, Aviva Ireland reports Operating Profits of €113 million. This is an increase of 15% on our prior year result (2017: €99 million) and is the fourth consecutive year of double-digit percentage growth across our Life and General Insurance businesses.

Friends first purchase

The Purchase of Friends first has definitely helped bolster profits for the company. The acquisition took its share of life insurance premiums in the state up to 15%, the same stake it has in its general insurance sector.

“The integration of the two businesses is progressing well,” said Aviva Ireland chief executive John Quinlan. 

The media department also stated ” Aviva’s acquisition of Friends First completed on 1st June 2018. The integration of the two businesses is progressing well with Friends First contributing significantly to Life Operating Profits in 2018″.

This positive news also came in a week of announcements regarding Brexit and planned by Aviva to avert any major impact on its customers.

Post-Brexit plans for Ireland

With headquarters in London, it was also apparent that Aviva has made contingency plans post Brexit. This includes the movement of an asset to Dublin and the merging of legal entities to ensure the smooth transition of its operations post-Brexit.

Its insurance sectors will now be regulated from Ireland so there are no conflicting interests.

On February 14th, A London court approved the transfer of about €9 billion of assets from the company’s UK parent, Aviva plc, to the Irish business.

Personal injuries claims

During his statement to the company Mr Quinlan also called for further government-led progress in reducing personal injury claims costs. He said that this will allow Aviva and other insurance companies to reduce premiums for drivers. But that large claim payments are one of the main factors stopping this possibility.

“The high levels of personal injury awards have also been a factor in the increased cost of commercial insurance for our business customers and further reforms are required here to reduce claims costs,” he added.

Post- Brexit uncertainty

Given the Uks current positon on Brexit there was also a number in the company who voiced concern over the companies future plans.

“Given current uncertainties, including the unknown future impacts of Brexit on the economies of the United Kingdom and Europe, our near-term outlook entering 2019 is more muted than our outlook a year ago,” said chief financial officer Thomas Stoddard. As reported in RTE.

“Uncertainty in the political and economic backdrop intensified during the year and this was reflected in a difficult year for investment market performance across most asset classes,” said Chairman Adrian Montague.

“In our home market, the UK, the prolonged and fraught process of negotiating Britain’s exit from the European Union has weighed down on growth in the economy.

“But Aviva is well placed to deal with this; our locally incorporated and locally regulated businesses in Europe have prepared to minimise the potential operational impact,” he added.

As with many of our reports over the last week and from many other news sources Brexit is still the main factor for 2019. Of course, the movement of business to Ireland is promising at the moment but the long term impact of Brexit may change that.

Like many companies, Aviva is doing its utmost to ensure a smooth transition as political manoeuvring seems to be forcing many companies to take the initiative in terms of sharing up uncertainty among its customers.

US Investment Set To Continue

US Investment Set To Continue

US investment has continued to increase as Ireland’s economy continues to show all the right signals. Investment has been seen across the board but primarily in the commercial and residential building and of course through tech companies which continue to dominate the docklands of Dublin.

The American chamber of commerce commented on this increased investment and hopes for the future during a recent conference which was attended by the Taoiseach.

American chamber of commerce

The American Chamber of Commerce hosted its inaugural ‘US Ireland Business Conference – At the Heart of the Transatlantic Economy’ in which speakers voiced their welcome of the news.

There was a new president Mark Gantly and also the announcement of the 2019 US Ireland business report. It was from this that most of the findings for the increase in investment were noted. The report detailed some of the companies which operate in both countries, the number of employees and plans for progression in the future, some of these details are noted below.

The primary focus of the conference is to explore ideas that are central to both countries and companies success. Some of the themes of the conference include:

1. Ireland – an island of opportunity at the centre of the world

2. The State of Play – Two Way Investment, Trade Relations and the current Geo Political Climate

3. Ireland – an island of innovation at the heart of the transatlantic relationship

4. Regulating for a Digital Economy – Trust and Security

This was recorded by Businessworld.ie.

POSITIVE NEWS

The American chamber of commerce said that invest in Ireland is at an all-time high and is likely set to continue as firms choose to business here post-Brexit.

The chamber said that investment there exceeds that of South America, Africa and the middle east combined.

Over 700 US companies employ 155,000 people directly in Ireland and support a further 100,000 jobs indirectly. These include tech giants such as Facebook, Youtube and Twitter and a host of investment and banking firms.

Mark Redmond, CEO of the American Chamber, said Ireland is an “absolute location of choice for US investment”, and it is a two-way story.

Irish investment in the US is also at an all-time high and exceeds that of Australia, China and India. “Around 800 Irish companies are employing 100,000 people across the US,” he said.

Some of the reasons for this continued trust in the Irish market include Irelands favourable corporate tax rate, English language, access to the European market among others. Although Mr Redmond said the tax rate is only a small reason.

US companies are more concerned about creating and attracting new talent, he said.

“For sure, the 12.5% rate is really important but quite frankly the top five priorities of US companies in Ireland is all talent-related, such as the STEM talent pipeline, and encouraging girls to pursue STEM subjects and careers.” as noted by RTE.

KENNEDY WILSON

One US property giant which has announced a continued interest in Ireland with plans to spend more than €530 million between now and 2022 is Kennedy Wilson. This investment is part of residential and office projects being completed by the company and a number of partners.

The company is part of a consortium and has a large stake in the so-called city block 3 site in Dublin. This site is developing [ed at the moment along with its partners Axa investment managers and Cain capital recorded the Independent.

These details have been released in an annual report released this week. The block 3 sites were purchased from Nama and the consortium is developing office and apartment spaces along sheriff street upper and Mayor street upper.

The company also plans to develop a site in Stillorgan south county Dublin which is still in the planning stage.

“Last year, Kennedy Wilson paid €160m for 274 of 507 completed apartments on a four-acre site in Stillorgan, called Grange. The property group notes in its annual report that it expects to build an additional 235 apartments at the site, for a development cost of roughly $47m (€41m)” noted the Independent.

Kennedy Wilson has acquired at least €1.5bn worth of assets in Ireland since the downturn. It currently has $16bn (€14bn) of assets under management.

CONCERNS

Of course, there has been some concern from experts especially in relation to residential properties. Some have viewed the increased difficulty first-time homeowners face as corporations snap up entire projects making it difficult for people to save and be able to afford properties throughout Dublin.

This, however, may only continue as restrictions remain light on the actions of these corporations.