Swan liqueur looks to raise €1m; betting firm back in the black; Citylink’s one million passengers; Ryanair’s dividend

Swan seeks firepower

COMPETING WITH the financial firepower of a Diageo or a Pernod Ricard makes it extremely tough for indigenous Irish spirits to gain a foothold in the drinks market.

Just ask John Teeling, who has toiled hard to gain traction for his Cooley Irish whiskey brands.

That isn’t putting off the backers of Coole Swan, the fledgling premium Irish cream liqueur. They are currently in the middle of a €1 million fundraising round to boost their marketing firepower. This would value the business at about €8 million.

You don’t have to have megabucks to invest, either. Share units of just €250 have been made available to the general public.

Coole Swan is aiming at the premium market, avoiding a head- to-head with Baileys, which hoovers up the mass market.

Its main backers are David Gluckman, who has worked on the Baileys brand, and Adrian Walker, formerly of Diageo.

Its executive chairman is Michael Nason, the former head of Arnotts and ex-Musgrave executive, while David Phelan of Boru Vodka vintage is also a director.

“The fundraising would help take us to another level, particularly in the US,” Nason told me this week. Coole Swan has received support from Enterprise Ireland and An Bord Bia, which has helped with research.

Nason argues that small Irish food brands should come together under the one umbrella, rather than flying solo. Co-opetition the Americans call it, and this suggestion features in a Harvard paper prepared recently for An Bord Bia. “Why can’t Coole Swan and other products become part of an Irish-owned entity, rather than being sold off to a Diageo or whoever?” he asked.

Food for thought, you might say.

Global Betting Exchange enjoys profitable year

ACCOUNTS JUST filed for Global Betting Exchange UK Ltd, a business set up by Dermot Desmond in 2000, show that it enjoyed a profitable year in 2008.

Its accumulated losses declined to €149,321 at the end of that year from €778,161 in 2007. This indicates a profit for the period of more than €629,000.

Global Betting Exchange operates in Ireland and Britain. As with many of Desmond’s companies, the IFSC-based entity here is unlimited and does not have to file its financial statements for public scrutiny.

Its website states that the company has invested more than $30 million (€25 million) in its platform, which allows sports bets to be traded.

This platform is used by a number of gambling groups, including Betdaq (another Desmond company), Betchronicle.com and poker business PKR.

It matches nearly 50 million sports bets with a value in excess of $7 billion annually.

Chief executive Brian O’Sullivan, who worked with Desmond on the acquisition of the Sandy Lane resort in Barbados and also runs Betdaq, declined to comment on the 2008 results.

However he said 2009 was “a good year for us” although “business is challenging” in the prevailing economic climate.

Citylink a driving force in transport sector

THESE ARE difficult times for transport operators in Ireland but independent Galway-based bus group Citylink continues to motor on. Citylink, which is owned by Singapore-based ComfortDelGro, made a loss of €260,000 on turnover of €6.2 million in 2008.

Managing director Cathy Cullen told me this week that the coach operator was “marginally profitable” in 2009 on turnover of about €6 million.

Not bad, all things considered.

Cullen said Citylink’s four routes carried about one million passengers during the year, roughly in line with 2008. It operates out of Galway to Dublin, Cork (via Limerick), Shannon Airport and to Connemara/ Clifden.

“We’d hope to double that within five years, both by launching new routes and through acquisition,” Cullen says.

Citylink already has a handful of route licence applications with the Department of Transport. Future growth could include Northern Ireland – Cullen is from Tyrone. She was coy about acquisitions but Citylink’s parent has the financial muscle – it made a net profit of $54 million in the first quarter of 2010 – for a deal.

Why though would one of the world’s biggest ground transportation groups be bothered investing in a “marginally profitable” business in recession-hit Ireland?

“They see a future in Ireland,” she says. “They are pretty confident that the market will open up . . . not overnight, but over time.”

O'Leary bets on more sweet deals with Boeing

THE ANNOUNCEMENT this week by Ryanair that it plans to pay a €500 million dividend to shareholders in October was welcome news to its investors.

But it could also be interpreted as a timely reminder to Chicago- based aircraft manufacturer Boeing about a deal for 200 new 737s. Many thought Michael O’Leary was bluffing last December when he declared that talks with Boeing were over and Ryanair would put the brakes on its growth from 2013 and return surplus cash to shareholders.

O’Leary proved his doubters wrong this week and indicated that an additional €500 million could be returned in dividends by the end of its 2013 financial year.

It is sure to have reminded Boeing of what it might have had.

Informed sources tell that me Ryanair has paid about $30 million (€24.6 million) for its Boeing aircraft in recent deals. That’s about half the list price.

These were sweet deals negotiated in the slipstream of the 9/11 terrorist attacks when the commercial aviation sector was in turmoil. Clearly, €1 billion would buy a lot of new aircraft for Ryanair; it would also provide a substantial cash injection for Boeing. To date, Boeing has been reluctant to bow to Ryanair’s demands on price. It is still smarting from O’Leary’s public comments at the time of the last deal, which suggested that the aircraft maker had been royally shafted by the Irish airline.

There is a fly in the ointment, though. Analysts estimate that Boeing might have to cough up billions of dollars to compensate airlines and reimburse suppliers for a two-year delay in delivering the first 787 Dreamliner aircraft.

Against this backdrop, Boeing might be willing to review its position. In May, James Bell, Boeing’s chief financial officer, said it was three-quarters of the way through negotiations with suppliers and customers about reimbursing them for the 787 delay. These are expected to be concluded by the year end. This won’t have escaped the notice of O’Leary. Expanding Ryanair’s footprint is part of his DNA.

You wouldn’t bet against him landing a deal with Boeing.

Little things

HAVING SCORED a lucrative shirt sponsorship deal with Vodafone earlier this year, the Dublin GAA county board has started to sell corporate hospitality packages for games at Croke Park.

The move aims to “generate funds to service the needs and requirements of all” its football teams.

Project Blue offers 10 tickets for each of five football games at Croker, starting with the Dublin- Wexford Leinster match on June 13th.

The usual “gourmet meal” and free bar is thrown in too, along with a guest speaker – all of this for €17,500, plus VAT – a tasty sum in the current economic climate.

The matches include the Leinster final, an All-Ireland quarter-final, semi-final and the final itself.

Presuming Dublin beat Wexford, the Leinster semi- final against Meath is thrown in as a “bonus” match. It just remains to be seen if the Dublin footballers last the pace all the way to September.

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Brazilian aircraft maker Embraer has not given up on selling executive jets to Dómhnal Slattery’s JetBird.

The Irish airline cancelled an order for 50 Phenom light jets recently after failing to secure funding for take-off.

“The two companies are negotiating a new contract with a new delivery schedule,” said Claudio Camelier of Embraer Executive Aviation.

“We still support JetBird and believe in its business model. The world economic crisis has changed the whole business aviation scenario in Europe, so they had to revisit their business growth plans.

“This is what we are discussing at the moment.”