Irish-owned private companies registered in Cork comprise our annual ranking of the county’s largest indigenous enterprises. Nick Mulcahy reports on how some of them fared through Covid lockdowns and trading restrictions.
The financial year-end for Musgrave Group (No.1. on the Business Plus Cork Top 50 list) used to be December 28. For the most recent filed accounts, the reporting period end date was January 2. The reason for this odd state of affairs is that the group’s reporting period ends on the Saturday closest to December 31, which makes sense as Saturday is the busiest grocery shopping day of the week.
The year to January 2 2021 took in the worst of the pandemic lockdowns, which were certainly good for trading at SuperValu and Centra stores that Musgrave sells into. Turnover advanced 13.7% year-on-year, though the net profit was only ahead by €4m at €81m. The net margin of 1.8% suggests that the supermarket grocery sector is still competitive, and the family business rewarded shareholders with €18m in dividends, the same as the year before.
Dairygold (No.2) improved turnover by 15% to €1.2bn in 2021 on the back of low global milk supply growth in the main exporting regions and strong international demand, in particular from China. EBITDA came in at €58m, an increase of €4m, reflecting the increased level of profitability in the core business, according to the company.
Dairygold collected and processed 1.49 billion litres of milk in 2021, a 4.2% increase on 2020, and chief executive Conor Galvin says the company’s focus has shifted from milk expansion to creating more value per litre of milk. The co-op established a Health and Nutrition unit which has developed premium canned milk powders for the Asian market, and the company expects to make acquisitions to bolster this side of the business.
Trading this year may not be so buoyant. In the results statement the company told member shareholders: “The ongoing Ukraine invasion and the resulting disruption to supply chains will significantly affect both the availability and the cost of a large range of inputs including fertiliser, energy, packaging and raw materials. The resulting inflation, which is already being felt at farm and factory level, will create challenges for profitability in the entire value chain.”
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Elementum Capital (No.4) had a good pandemic, with net worth increasing by 17% to over the €100m level. Elementum is the investment vehicle for Sean Murphy, who made a fortune from HR software. The company’s accounts disclose the bare minimum, but from somewhere Elementum recorded a profit of €15m. The company’s cash resources declined to €18m from €26m in the year to
June 2021.
Brian Acheson’s Dornan (No.6) continues to go from strength to strength. The principal activities of the group comprise mechanical, electrical and instrumentation contracting in Ireland, the UK, the Netherlands, Belgium, Denmark and Sweden. In 2020 turnover advanced 47% to €488m, with net profit advancing 60% to €16m. Period-end debtors were €124m, up from €84m, and balance sheet cash was €47m. Despite the expansion in activity, average group employment through the year declined to 884 from 994, though the payroll overhead edged upwards.
EPS (No.8) is another enterprise that proved immune to Covid trading restrictions, with turnover improving by 22% in the year to March 2021. EPS manufactures domestic and industrial pumps, and designs and installs water and sewage treatment systems. Net profit was ahead by 40% at €6.2m, and shareholders received dividends of €550,000. Cash generated from operations was an impressive €10.8m, and period-end balance sheet cash was €19.5m, up from €13.8m a year earlier.
Lucey Transport Logistics (No.15) came into being in March 2020 when Kevin, Ronan, Juan and Bryan Lucey established this new holding company for the family firm. This was effected by LTL acquiring the family’s existing trading companies, resulting in a €23m intangible asset in the balance sheet, which accounts for c.75% of shareholders’ funds. As the initial LTL accounts were for five months, on an annual basis the Lucey family firm is generating an annual profit of c.€3m.
Stephen McCarthy’s housebuilder Astra Construction Services (No.17) saw turnover decline by 20% over the Covid lockdown period, though in the year to June 2021 the company still booked a net profit of €3.3m, a margin of 20%. Utilisation of tax losses reduced the effective corporation tax charge to 1.7%.
Chesway (No.18), the holding company for the Whelehan family’s hospitality interests, felt the full force of trading restrictions in 2020, with turnover halving to €5.2m. The company booked a small loss but on a cashflow basis the company was ahead, with cash generated from operations of €1.7m compared with €1.2m the prior year. In 2019 the company booked a net profit of €10.7m due to value adjustments in respect of investments held as current assets
MRBP Motors (No.22) is the holding company for various companies in Kearys Motor Group. The largest family-run dealer group in Ireland represents BMW, Dacia, Hyundai, Mini, Nissan, and Renault, as well as the complete range of motorcycles from BMW Motorrad. Its dealerships are located in Cork, Midleton and Mallow, and though turnover declined 8% due to pandemic restrictions in 2020, the group pushed up net profit by a factor of five to €5m. This was partly due to €2.1m in wages and other subsidies received. The accounts report that in 2021 the company agreed updated terms in respect of its €3.7m bank loan, which extended the repayment term and amended the repayment plan and covenants.
General contractor and housing developer Cumnor Construction (No.23) also rode out the Covid impact, raising turnover and profit through 2020. The O’Mahony family’s Blarney company swung to a net profit of €1.6m from a loss of €630,000 the year before, on a profit margin of 4.9%. Net cash generated from operating activities was €1.5m and the two shareholders drew down modest dividends of €48,000.
Directors Michael and Edmond O’Mahony noted in Cumnor’s accounts filing: “While the first lockdown as a result of Covid-19 was very difficult, as an unanticipated event, the company is now more prepared to effectively manage the associated challenges related to employee safety, materials, cost and logistics arising from any further disruption caused by the pandemic.”
GPS Food Group (No.24) is more active in the UK than in Ireland, but its origins are in Cork and the company is registered in Cork too. The venture is owned by Brian Perkins, Padraig McCarthy and Fergus Quinn Smith, and is involved in exporting beef, poultry, lamb and seafood around the world. Turnover improved by 13% to €267m in the year to June 2021, delivering a net profit of €8m, more than double the outcome the previous year.
In the accounts filing the directors reported that the sales increase was driven primarily by higher exports to customers in China and other Asia markets. Its brands are more familiar to foodservice buyers than consumers — Butchers Hook, Lazy Cow, Natures Reserve — and group activity extends to South Africa and Norway. The focus on ‘meat protein supply chain’ includes sausage production and cold storage and warehousing facilities. The company says that it sells 100 to 125 containers of meat products every week. HSBC provides loan finance for the venture, which amounted to €12.6m in June 2021.
Bart J Arnold Communications (No.32), which trades as Television Mobiles (TVM), provides outside broadcasting services for sports and other events, and supplies cameras to racecourses throughout Ireland. Based in Bartlemy, Co. Cork, and established by Bart and Helen Arnold in 1986, TVM has developed into a one-stop broadcast facilities company.
The pandemic wasn’t favourable for the company, when most sporting events were prohibited or scaled back from March 2020. Though turnover is not disclosed, gross profit reduced by 40% to €8.1m, and the company swung from a €2m profit to a small loss. Despite the trading pressure, the Arnolds’ company increased its balance sheet cash pile to €8.4m. Investment in OB equipment and units over the years has amounted to €26m, and company assets include investment properties valued at €2m, and listed and unlisted investment valued at €2.7m in September 2020.
P.&A. Herlihy (No.34) is controlled by Patrick and Anna Herlihy, whose retail interests include The Loft Superstore and Square Deal Carpets. The company had €33m in financial assets in June 2021, made up of €31m in listed investments and €2m in unlisted investments. The accounts filing records a €6.6m gain on those investments in 2020/21, and the company, with two employees, booked a net profit of €4m. Period-end liabilities included €7m owed to Bank Julius Baer Europe, secured against the investment portfolio of the company up to a maximum value of €9m. The borrowing attracts an interest rate of LIBOR plus 2% payable monthly for the duration of the credit agreement.
On a P&L basis, West Cork Distillers (No.38) appeared to have run into Covid turbulence in 2020, with net profit declining to €1.2m from €4.2m the year before. However, the reduction in reported profit was partly due to a higher depreciation charge of €3.6m versus €1.9m in 2019. Cash generated from operating activities of €7.2m was double the outcome the previous year. The annual accounts filing discloses €2.2m investment in freehold property in 2020, and €6.6m investment in plant and machinery. This level of outlay may highlight to all the craft distillery wannabes that playing in the spirits major league isn’t for the fainthearted.
The Blarney Woollen Mills Group (No.41) spans hospitality and retail, and it was severely tested by Covid trading restrictions in 2020, with annual turnover plummeting from €43m to €25m. In the circumstances, net profit only halving to €1.3m was a pleasing outcome for the directors. This was achieved by shaving €8.2m off operating expenses, a reduction of 40%, with average headcount cut from 488 to 262. Working capital management was highly efficient too, with a €7m swing in net cash from operating activities from the previous year. Period-end unpaid taxes were €3.6m as the company, presumably, took advantage of the tax warehouse scheme.
Billy Horgan’s Dexgreen (No.43) had a Covid hiccup in the year to July 2020, with turnover declining 16% to €14.9m. The net profit came in at €2.9m, for a nice margin of 20%. The company makes and markets all the kit that telco teams laying fibre optic cables around the country need to ply their trade. With massive investment in fibre rollout, Dexgreen has been doing well in recent years, with retained earnings in the balance sheet amounting to €15.8m. That figure would have been higher except for the €4m dividend drawn down by the company’s two shareholders.
The Atkins (No.46) operating company John Atkins & Co was incorporated in 1903, and the company is a good example of how if you survive long enough in business, growth can suddenly pick up. Annual turnover was €13m in 2013 and this had risen to €31m in the year to October 2021, with a year-on-year improvement of 19%. The firm, controlled by Mark Wolfe, is a distributor of farm and grass machinery and parts to wholesale and retail customers and operates from four locations in Co. Cork as well as in Birr.
