Anglo’s decision to fall into line is hardly surprising, but is pointed nonetheless. The lack of surprise has to do with the fact that the big Irish banks have been to the fore in issuing trading updates. The reason why Anglo’s decision is pointed is not unconnected to the fate it suffered after the publication of its interim results earlier this year. The shares, not to put to fine a point on it, took a beating.
The stock fell the guts of 30% in the weeks after its interim statement, even though the bank had “made its numbers” almost on the money. But that wasn’t good enough for a market that had grown fat on the back of Anglo’s propensity to exceed, not just meet, expectations. There was also talk that growth would slow, leaving analysts focused more on the slow than the grow.
The pre-close statement will allow the Anglo chief executive, David Drumm, to massage expectations. The shares closed at €13.10 on Friday, almost back to where they were before the post-interims collapse, when they fell to as low as €10.74. With corporate lending now replacing home loans as the driver behind the nation’s rising debt levels, and at an all-time high, we expect some good news this week from the preferred banker of the new entrepreneurial elite.
Slattery’s style
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Wall Street will be wining and dining one of Ireland’s most seasoned airline executives this week — but it won’t be the stock market-bound Aer Lingus boss Dermot Mannion. The former GPA executive Domhnal Slattery will be a guest of the Brazilian aircraft maker Embraer on the New York exchange. The Brazilian firm is ringing the “opening bell” on Wall Street and asked Slattery, as a large customer, to come along.
JetBird, Slattery’s executive jet company, has placed an order for 100 of Embraer’s new Phenom 100 jets ahead of the airline’s launch in 2009.
Slattery will make presentations to a number of investment houses in the Big Apple, including Wachovia, JP Morgan and Citigroup. There is no fund-raising planned, but ultimately Slattery sees JetBird coming to the market.
With airport security alerts pushing executives into corporate jets, it seems Slattery has picked the perfect time to introduce himself to Wall Street.
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Eircom revamp
With Babcock & Brown at the reins at Eircom last month, senior members of the management team are expected to ride off into the sunset. Philip Nolan has already taken his leave as chief executive, while the commercial director, David McRedmond, has been linked to a number of posts, including the top job at An Post.
Another, more surprising candidate, however, could be the finance chief, Peter Lynch. Recent reports suggested that Lynch was staying put, but it seems the telco’s number cruncher has, in fact, yet to signal his intentions.
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After five years as finance director, Lynch is thought to be itching for something more hands on. He is believed to have coveted the top job at Eircom after the takeover, a position that has been given to Australian Rex Comb. He could get a top chief executive role if the Aussies were to follow through on an earlier proposal to split the business in two. ()
But with the trade unions seemingly opposed to such a move, that plan might never see the light of day and could well be a reason why Lynch is still pondering his future.
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Island gas cut
Island Oil & Gas’s announcement last week that it had abandoned one of its wells in the Donegal Basin off the west coast of Ireland will have come as no surprise to seasoned observers of the industry here.
Petroceltic and Lansdowne Oil & Gas also had an interest in the project, which was forecast by analysts to be a not insignificant 550 billion cubic feet (BCF) gas prospect.
The waters around Ireland have proved to be a graveyard for many companies down the years, most recenty Ramco, a Scottish group that lost its shirt drilling in the Celtic Sea.
Fortunately, for investors in Island, the company pulled the plug at an early stage to avoid racking up a large drilling bill.
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This was the third well drilled by Island off the coast of Ireland this year. The other two have produced gas discoveries, although it remains to be seen if they are economically viable.
While gas prices are sky high at present, the cost of labour here and planning and environmental problems make Ireland a less attractive place to explore than other parts of Europe and north Africa.
Just ask Shell, which is still waiting to bring its gas ashore off the west coast following a long-running battle with the residents of Rossport.
Investors have been drifting away from Island over the past few weeks. In early August the stock was worth 116p (172c). It closed on Friday at 82.5p, a fall of 29%.
Merrion’s past
Reports during the week that the Merrion hotel in Dublin made a post-tax profit of €1.4m in 2005 remind us of a story about when the former state-owned property was put up for sale in the early 1990s.
Diarmuid Hegarty was scouting for premises for what is now Griffith College and went to see the Merrion buildings, which housed the department of lands at the time and were in a run-down condition.
On the walkabout, Hegarty opened a cupboard only to discover a civil servant having 40 winks.
The mandarin leapt to his feet and matter-of-factly walked past the potential buyers and back to his duties. Working in the land registry was obviously a stressful job in those days.
The Merrion — it’s always been a good place to get a good rest.