European equities climbed to a two-year high on Tuesday, with financial stocks gaining ground on mounting expectations of a possible US rate hike this year.
The European Banks index rose 1.8 per cent, the top sectoral gainer, helped by a 2.7 - 3.8 per cent rise in share prices of Deutsche Bank, ABN Amro, Natixis and Credit Suisse.
US stocks fell in early trading after stronger-than-expected consumer confidence data stoked worries about the potential rate hike this year.
The ruling that Apple must pay the Irish Government €13 billion in back taxes also impacted sharply on tech shares in the US with the company being the biggest drag on all the major stock indices.
DUBLIN
The Iseq index of leading shares closed marginally lower, down 11.59 points to 6,202.77.
IFG, the UK-focused financial services group, was the biggest faller of the day. The company, which last week reported a 31 per cent surge in adjusted operating profit for the first half of the year, was down nearly 7 per cent to €1.90 as investors reacted to a downgrade from Macquarie. Datalex, which announced its first half results on Tuesday, saw its stock close the day just shy of 1 per cent lower to €3.42 after it reduced its 2016 guidance by about 4 per cent as it seeks to scale the business. CRH was 0.6 per cent lower at €30.35 after its US peer USG Corporation sold a part of its business to ABC Supply.
Total Produce was one of the biggest gainers of the day, up 3.5 per cent to €1.61 after it reported first half revenues that were 10.6 per cent higher.
Elsewhere, Permanent TSB was up by just under 5 per cent to €2.05 after new figures showed mortgage approvals up 17.6 per cent in the year to July.
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Other movers of the day included Paddy Power Betfair, down 2 per cent to €107.65, and Bank of Ireland, up 2.5 per cent to 19 cents.
LONDON
London’s premier index struggled to make headway as falling copper prices took their toll on the mining giants. The FTSE 100 Index closed 17.26 points lower at 6820.79, as London-listed miners dominated the biggest fallers, with Fresnillo leading the market lower, down 100 pence to 1690 pence.
Copper prices sunk to two-month low during the session and were unable to mount a strong recovery, forcing Anglo American to drop 41 pence to 817.5 pence, and Glencore to slip 7.9 pence to 177.1 pence.
Penneys/ Primark owner Associated British Foods (ABF) was the biggest riser on the top tier after RBC Capital handed the firm a broker upgrade from sector perform to outperform. Shares were up more than 3 per cent to 3051 pence after RBC said ABF’s sugar business was benefiting from stronger sugar and euro prices, while Primark held an “attractive international rollout story”.
EUROPE
Banks helped the pan-European STOXX 600 to close 0.5 per cent higher, after rising earlier in the session to its highest level since mid-August. Among some sharp movers, Germany’s Wirecard jumped 3 per cent after Barclays raised its rating on the stock to “overweight” from “equal weight” and lifted its target price.
Belgian investment holding company Ackermans & Van Haaren dropped 6.6 per cent after reporting a weak set of first-half results.
NEW YORK
US stocks were lower in late morning trading as Apple dragged down technology shares after EU antitrust regulators ordered the company to pay €13 billion in back taxes to the Irish government.
The S&P 500 technology index fell 0.37 per cent, the biggest decline in nearly a week, hurt by a 0.9 per cent drop in Apple. Hershey dropped 10.6 per cent to $99.92 after Mondelez said on Monday it was no longer pursuing an acquisition. Mondelez rose 4.2 per cent and provided the biggest boost to the S&P and the Nasdaq.
Abercrombie & Fitch plunged 20 per cent after the apparel retailer said it no longer expects comparable sales to improve this year.
- Additional reporting: agencies

Financials help European shares hit a two-week high


IFG is biggest faller in Dublin while Total Produce, Permanent TSB and BoI all gain


Revenues at Total Produce rose 10.4 per cent to €1.9 billion in the first half of the year as the fresh food group got a boost from acquisitions and higher average prices.
In the six months to June 30th, total revenues rose 10.4 per cent, while adjusted EBITA was up 13.2 per cent and adjusted fully diluted earnings per share grew 11.6 per cent. Profit before tax rose 5.8 per cent to €25.6 million.
The fruit distributor spun out of Fyffes said it benefited from acquisitions completed in the period and a circa 5 per cent like-for-like growth in revenue on the back of both volume growth and higher average prices.
A strong operational performance was offset in part by a small negative impact on translation to euro of the results of foreign currency denominated operations.
Expansion
Chairman Carl McCann said the group delivered “a very strong performance” in the first six months of the year as the group continued its expansion in north America in 2016, acquiring 65 per cent of Progressive Produce, a company headquartered in Los Angeles, as well as a number of other investments.
“The group continues to actively pursue further investment opportunities,” Mr McCann said, adding that the interim dividend was up 10 per cent to 0.8096 cent per share.
“The group is now targeting increased full-year earnings at the top end of the previously announced range of 10.50 to 11.50 cent per share.”
On the UK’s decision to leave the EU, Total Produce said while it has “created some macroeconomic uncertainties, it is not expected to have a material impact on the group”.
In a note Davy Stockbrokers said it was a “strong” set of results, adding that the international segment represented “a significant growth opportunity” for the group. It reiterated its “outperform” rating.


Acquisitions and expansion in north America boosts fresh food group


Irish officials say they have had more than 35 concrete enquiries from London-based financial groups looking at setting up a base or expanding in Ireland following the Brexit vote.
Dublin is one of a handful of European cities trying to draw business away from Britain’s financial centre.
“Post-Brexit, it’s meant a lot more meetings, more phone calls and a lot more travel,” said Eoghan Murphy, Minister of State for Financial Services. “I’m in daily contact with different players in the industry.”
Ireland is trying to woo companies with the offer of a contracting entity, a legal toehold on the island that could be expanded when Britain leaves the EU, allowing them to keep the same access to the European market.
Businesses are being courted by other financial centres including Frankfurt and Paris as executives consider alternatives to London while British prime minister Theresa May weighs when to trigger two-year-long exit negotiations.
Some, particularly in fund management and insurance, say they are warming to Dublin.
Insurers Admiral and Beazley have said they are considering moving more business to Ireland while the funds arm of insurer Prudential is looking at expanding Dublin operations.
Mark Hemsley, the European head of pan-European stock exchange Bats, said that Ireland was “attractive because it’s the most similar to the UK structure”.
Two lawyers who advise financial services firms told Reuters that a group of fewer than a dozen executives would be enough to open an arm for an insurer or fund manager in Ireland. Moving part of a bank, however, would typically be a bigger task, requiring more capital and staff to be relocated.
‘Historic opportunity’
“Brexit represents a historic opportunity,” said Kieran Donoghue of IDA Ireland. “Over the next few weeks, our approach will be dialled up.”
Jim Stewart, an academic with Trinity College Dublin, said Ireland’s financial centre had hosted many of the vehicles involved in the financial crash and that it used “smoke and mirrors” to “camouflage” some activity.
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“It is not just the tax concession,” he said. “It’s regulatory as well. The concession is that there is sometimes no regulation.”
Stewart points to the extensive use of special purpose vehicles, including section 110 companies, allowing deductions to cut tax on profits to as little as zero.
Reliance on tax breaks may have spawned a financial sector with little real activity with Stewart saying investment funds are largely administrated rather than run from Dublin’s International Financial Services Centre.
‘Low skilled’
“A lot of the jobs in the IFSC are fairly low skilled,” he said. “The thinking is always done in a major financial centre.”
Such criticism is rejected by Irish authorities, including the Central Bank, which said licensing procedures are rigorous.
“It’s the opposite to a brass plate financial centre,” said Padraic White, a former head of the IDA agency. “Ireland has a transparent tax system. There is no such thing as a tax deal. There is an aspect of sheer jealousy and envy.”
After years of cutbacks, Ireland also has other problems. As construction of new homes lagged, rents in Dublin have risen above the peak at the height of the property boom.
Many in London are still biding their time, listening carefully to the campaigns from Ireland, Paris and Frankfurt as well as keeping an eye on Brexit progress in Britain.
“Most thought this would never happen,” said Simon Tilford of the Centre for European Reform, a London-based think tank. “The test will come when they realise that there’s no going back. Then the real reaction will kick in.”
– Reuters

More than 35 London financial firms eye Dublin switch


Ireland seen as attractive alternative post Brexit vote given similarities with UK structures


Rachel Kavanagh is managing director of Glossybox UK and Ireland – an online beauty box business established in 2011, which is now one of the industry’s market leaders. Kavanagh lives in London with her husband and two children.
A native of Terenure in Dublin, Kavanagh originally had her own brand – Rockstar Tan – which she established when she graduated with a business, economics and social studies degree from Trinity College in 2007.
She had been in discussions with Glossybox to distribute her brand which was stocked in leading retailers such as Boots and Debenhams. Glossybox is an online beauty retailer that works by selecting five beauty products a month and sending them out to customers.
“I stayed in touch with the MD at Glossybox who then got in touch with me 10 days before my wedding to ask me to interview for her position.
“It was time for a new challenge and I had learnt everything I needed from my own brand. The market was so saturated and I really wanted a new chapter. The job in Glossybox offered me that and in a new country too. The first year was tough – we had an 18-month-old baby and it was a new job – but we are still here 3½ years later.”
Kavanagh and her husband now have two children and Kavanagh returned to work 5½ months after the birth of her second child.
“It’s more challenging with two children. I have a live-in nanny and a very supportive husband. I couldn’t do my job without them.
“In London you spend so much more time commuting. We moved house earlier this year so that we are right beside the Tube station. It shaves 20 minutes off my commute each day so it’s an extra 40 minutes a day with the children. Your life becomes worked into slots of work- and home-life and in trying to find the balance between the two.”
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The family live in Parsons Green. “In London, I think wherever you land you tend to stay. Your borough becomes your village. You crave that village mentality even though you give out about it when you live in Ireland,” she laughs.
Kavanagh gets to her office by about 8.15am. The creative, editorial, social and digital and sales departments are all under her remit.
“Sales is a major aspect,” she says. “Making sure the beauty boxes are full each month, that we’ve the correct mix of product... we are very editorial in the way we work so we have a product to produce with a very heavy theme each month. You’re only as good as your last issue, so my day is made up of fast decision-making, monitoring sales and customer reaction. As an online business, it is very sales target driven and very fast-paced – you’re never off.”
In an effort to make her schedule more efficient she attends external meetings either on the way to, or the way home, from the office.
“A lot of my meetings are with parent companies, brands such as Estée Lauder, L’Oréal, P&G or new niche brand founders, PR companies, distribution companies and so on. I do a lot of the networking and the brand pitching and story-telling.”
Kavanagh is a member of CEW (Cosmetic Executive Women) – a not-for-profit professional organisation that gives women a voice and a platform in the beauty industry.
“I got to know their president, Caroline Neville, early on and she has been a wonderful support to me since I joined Glossybox. She is such a force of nature in the beauty industry and a great inspiration.”
Kavanagh says that her academic background in no way prepared her for her working life.
“When I look back on it, the things I wish I’d been taught are things like excellent Powerpoint presentations, excellent Excel skills – basic business skills. It’s only when you get into the workforce that you become aware of what you want to develop and polish through your own learning and self-empowerment.”
The UK’s Brexit decision was “devastating”, she says. “Not to be dramatic but it was like time stood still. My children are Irish with Irish passports, they are European and they will be raised as such. Nothing changes in that respect, even if we remain in London.
“But it has massively dampened my love for the UK and the life we have made here. There is a sense the country is in freefall and I have friends whose jobs and businesses have already been dramatically affected by it.”
From a professional perspective, increased currency insecurity is something the brand needs to keep an even closer eye on, she says.
“With our HQ in Berlin we see ourselves as a European brand, so it was a sad day for us all when we got the news, as we are a very close global team. In general, it’s a matter of waiting it out to see the real implications.”
For now though, Kavanagh says that she has no plans to return to Ireland.
“It was a big commitment to move over and we feel settled and still excited by the city,” she says. “I have been with Glossybox for three years and we have matured from an entrepreneurial start-up into the leading beauty box in the industry. There is still so much more to achieve and I want to be part of that story.”
www.glossybox.ie

Wild Geese: ‘Glossybox offered me a new chapter and in a new country’


Rachel Kavanagh’s qualifications did not prepare her for London’s fast-paced beauty retail business


Independent News and Media (INM) chief executive, Robert Pitt, warned on Friday that online publishers need to be careful about the type of ads to which website users are exposed, or in some cases, subjected.
In recent weeks, visitors to Independent.ie have been confronted with a so-called interstitial ad – one that covers the whole screen and must be swiped away before you can look at the content you came to see – for Eir Sports, featuring Leicester City footballer Riyad Mahrez.
In the ad, Mahrez reached for the camera facing him and the screen of the viewer’s smartphone appeared to crack. If regular visitors to Independent’s homepage had to keep negotiating this form of annoying ad, one can imagine how the screen could be cracked in reality after the iPhone was flung against a wall in frustration.
Pitt quite rightly pointed out that interstitials – used by many publishers, and not just INM – and other intrusive ad types rub customers up the wrong way. “We need to find less intrusive ways; there had to be a balance,” he said.
Intrusive ads are the fuel for the ad-blocking fire. Hordes of customers annoyed by unwanted ads go on to install software that rebuffs all advertisements, which is a putative disaster for the online publishing industry. Pitt said the potential impact of ad-blocking software on the industry is overblown.
But what about network-level ad-blocking, where network operators such as mobile phone companies install software that weeds out all ads, all of the time? Three is testing this technology in the United Kingdom. Three is also the second biggest network in Ireland. Wouldn’t this be a disaster for Irish publishers?
“It would be very problematic,” said Pitt, with no little understatement.
Perhaps the most vocal proponent globally of network-level ad-blocking is Denis O’Brien, who has rolled it out across all of Digicel’s network, as part of his battle to get a slice of Google and Facebook’s advertising revenues.
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O’Brien is, of course, by far the biggest and most influential shareholder at INM. His right-hand man chairs the board. If the billionaire succeeds in his aim of rallying other mobile operators to install ad-blocking software, it may rebound on his Indo investment.

Cantillon: Intrusive ads fuel for the ad-blocking fire


INM chief Robert Pitt warns online publishers on use of annoying interstitial ads


Apple’s chief financial officer Luca Maestri said on Tuesday the iPhone maker’s investment plans in Ireland have not changed in the wake of the EU ruling that it must pay up to €13 billion in unpaid taxes to the Republic.
“We have an outstanding relationship over the years with the Irish Government and we are very committed to Ireland,” Mr Maestri said on a conference call with journalists. “We have recently made additional investments in the country and our plans to invest in Ireland have not changed.”
Apple, which set up a base in Ireland in 1980, said in November that it plans to add a further 1,000 jobs in its base in Cork by the middle of 2017, bringing its Irish workforce up to 6,000.
While accountancy firm Grant Thornton estimates that Apple faces an additional interest bill of €6 billion as Ireland is forced to recover back taxes from the company between 2003 and 2014, Mr Maestri said “we believe it is going to be a significantly lower number.”
Apple has come out fighting following the European Commission’s final decision, with chief executive Tim Cook posting an open letter, criticising the EU for “effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should be.”
The California-based group said it will be appealing the ruling with the Irish Government and that it is “confident” the order will be reversed in court.
“We’re trying to sound an alarm bell that what the Commission is doing has real consequences for property, for investment, for international trade,” Apple’s general counsel Bruce Sewell said on the conference call. The EU’s decision “casts a pall” over the ability of companies doing business in the bloc, throwing into questions the legitimacy of any deals they strike with member states.
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Mr Maestri said he believes that multinational companies will have concerns in future about making investments in Europe, based on the Commission’s ruling.

Apple insists it will continue to invest in Ireland


Technology giant’s chief financial officer comments following EU tax ruling


Bord na Móna has acquired a 50 per cent stake in smart-grid technology firm Electricity Exchange for an undisclosed sum.
The start-up, co-founded by entrepreneurs Paddy Finn and Duncan O’Toole, operates a virtual 24-hour power station from its base in Castletroy in Limerick.
Their technology allows them to remotely control back-up generators and reduce power consumption in large industries at specific times of power shortages on the grid.
Bord na Móna believes the technology will allow for greater penetration of renewables.
Ireland’s power system faces a challenge in delivering on its 2020 renewable-energy target, which commits the State to sourcing 40 per cent of its energy needs from renewables.
Vigilant management
Bord na Móna said the variable nature of wind, from which the State derives most of its renewable electricity generation, requires vigilant power-system management in order to maintain security of electricity supply.
“Bord na Móna Powergen has a significant development pipeline of renewable projects and we see the Electricity Exchange technology as an enabler to allow greater renewable penetration on to the Irish Electricity grid,” Bord na Móna chief executive Mike Quinn said.
“The power system is evolving at a fast pace and Electricity Exchange has a track record of constant innovation which allows them to stay ahead of the curve.”
He said working together with Electricity Exchange would allow it to deliver exciting new services to the company’s combined customer bases and create new opportunities.
Dr Finn, a University of Limerick engineering graduate, said: “This investment comes at an exciting time for the company and we are looking forward to accelerating our growth, expanding into other markets, and delivering the technologies necessary to make Ireland a smart-grid exemplar in partnership with Bord na Móna”.
He was a recent regional winner of the best start-up business category in the Best Young Entrepreneur competition.

Bord na Móna takes 50% stake in smart-grid technology firm


Semi-State eyes potential in Limerick-based Electricity Exchange


Fáilte Ireland has tendered for a company to help it develop a new tourism strategy for the swathe of land down running down the middle of Ireland that falls outside the Wild Atlantic Way and Ireland’s Ancient East, the two linchpins of the State’s tourism marketing strategy.
The area, generally referred to in tourism marketing circles as “Ireland’s Lakelands” district, takes in parts of east Galway, Roscommon, Leitrim, much of north Tipperary, and runs down as far as the northern reaches of Cork.
Marketing resources
While the Wild Atlantic Way and, latterly, the Ancient East are heavily backed with State marketing resources, local politicians in the midlands region complain their area is being neglected.
Orla Carroll, Fáilte Ireland’s director of strategic development, said she hopes to have appointed a company to do a feasibility study by the middle of October. It may take a further six months, she said, for a study to be completed, after which any extra State funding that is required will be sought.
Fáilte Ireland on Wednesday tendered for a company “to ascertain the potential for growth and the best mechanism to unlock those areas that lie between the Wild Atlantic Way and Ireland’s Ancient East”.
Lakelands moniker
The tender made no mention of the Lakelands moniker, but Ms Carroll confirmed it is area being targeted.
She said the Lakelands term, which is also used in the Programme for Government’s tourism strategy, may not end up being the final slogan that is used for the region.
“We purposely didn’t use the Lakelands term because that’s all open for now. We don’t want to be too proscriptive. We want to see first what the study tells us about the best [slogan] for that geography,” said Ms Carroll.
The study will consider the best way to market the region to foreign visitors, and also predict the possible economic impact of any boost in visitor numbers.

State seeks adviser to help boost midlands tourism


Fáilte Ireland tenders for company to help market ‘Ireland’s Lakelands’


The European Commission will in the morning find that Apple owes the Irish State “billions of euros” in back taxes when it rules that the technology giant’s tax arrangements in Ireland constituted a form of illegal state aid.
The ruling, to be announced in Brussels on Tuesday morning, will not stipulate a figure for the amount of tax owed, but will lay out a process and a formula by which the unpaid tax should be calculated.
It is expected that an indicative figure will be supplied by the commission later in the day. Sources who have been briefed on the matter say the amount of tax Apple will owe will be in the billions, rather than the hundreds of millions of euros that Dublin had hoped for.
However, the Government will appeal the commission’s finding, and says the money will not be available to spend, either now or in the future, Ministers have stressed. Depending on the terms of the decision, Apple may be required to pay the funds into an escrow account in the coming months.
Government Ministers will embark on an aggressive campaign to rebut the commission’s findings. “They are making up new rules for international tax,” said one Minister last night. “They are trying to make us tax Apple for stuff that doesn’t happen here. It’s nonsense.”
Strong defence
Apple is also certain to reject the finding and will launch a strong defence, while political sources said that they expect the US government to weigh in later in the week in support of Ireland and Apple.
The Apple tax ruling The European Commission is to issue a ruling in relation to the tax arrangements of Apple in Ireland, where the phone giant has its European HQ. It looks certain the EC will confirm a preliminary ruling that Ireland offers Apple illegal state aid in how it allows it to pay tax. It will then tell Ireland it must collect tax from Apple but Ireland is expected to appeal such a ruling fearing it will damage the drive to attract inward investment. Q&A: Cliff Taylor answers the key questions I found this helpful Yes No
However, the larger than expected size of the sum at stake will complicate the politics for the Irish Government, which is determined to avoid having to take the money.
While Fianna Fáil has supported the Government’s decision to appeal the decision, there was fierce criticism from other Opposition parties.
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“The Government is wrong to say they will appeal the decision no matter what,” said Pearse Doherty, Sinn Féin’s finance spokesman.
“They’ve been saying it’s a reputational issue. I think it’s more damaging to continue a fight that we will ultimately lose,” he said. The Government should accept the Apple money, he insisted.
People Before Profit TD Richard Boyd-Barrett said it was “outrageous” that the Government had already spent hundreds of thousands of euros on legal fees fighting the case.
Legal fees
Mr Boyd-Barrett discovered through a parliamentary question that the Revenue Commissioners and the Department of Finance have already spent some €670,000 on legal fees fighting the case. The Government should accept the money as it would unpaid tax from any taxpayer, he said.
“This is money that could resolve our housing problems and the crisis in our hospitals,” he said.
However, the Government insists that even if the money if eventually paid to the Irish authorities, they will not be able to use it to finance current or capital spending. Instead, under EU rules the money must be used to pay down debt.
The contentious investigation has been under way now for more than two years. It concerns two tax rulings which the Revenue gave to Apple in 1991 and 2007. Last week the US Treasury accused the commission of acting beyond its powers in its investigations of the tax affairs of US multinationals and in particular objected to the idea of tax being collected retrospectively.
However, despite this the commission has pushed ahead with its final decision, which will be that Ireland offered illegal state aid to the US multinational.
Early estimates were that Apple could be asked to repay up to €19 billion in tax. While the final figure is expected to be substantially lower, sources say that there is no question but that it will be appealed by both sides.
The decision is expected to attract huge international attention. The Government is expected to immediately challenge the decision, saying that the reasoning used was unprecedented.

EU to find Apple owes Ireland billions in back taxes


Government to embark on aggressive campaign to rebut the commission’s findings


Shares in Apple fell slightly in early trading in New York on Tuesday as investors largely shrugged off a European Commission ruling the company must pay up to €13 billion in unpaid taxes, plus interest, to Ireland.
Apple shares lost 0.3 per cent to $106.46 on the Nasdaq exchange within minutes of trading getting underway, giving it a market capitalisation of $573.5 billion (€514 billion).
Investors in the California-based group are likely to be “unconcerned on a relative basis” about the news, as the penalty, while large in absolute terms, “represents a small portion of Apple’s overall valuation,” according to Gene Munster, an analyst with US investment bank Piper Jaffray.
Apple and the Government in Dublin have strongly rejected the Commission’s findings that the iPhone maker secured selective tax advantages in this country under agreements with the Revenue Commissioners in 1991 and 2007. Both said on Tuesday they will appeal the ruling through the European Court of Justice.
“Given Apple’s cash pile of over $230 billion dollars, and the more than $53 billion in free cash flow expected this year, the company can easily afford to pay any potential bill,” Dublin-based Cantor Fitzgerald analyst David Donnelly said before the tax bill figure was unveiled by the EU on Tuesday.
“Long term, we remain positive on the stock given its highly cash-generative nature and its potential for acquisitions to bolster its services range, which we see as necessary given declining iPhone sales, on which Apple is reliant,” Mr Donnelly said.
Mr Donnelly said company’s launch of its iPhone 7 next week is unlikely to amount to much by way of “game-changing” technology in a way that would dramatically improve phone sales.

Apple shares cushioned after EU ruling by cash pile


iPhone maker’s market value stands at $573.5 billion; cash pile tops $230 billion


The European Commission will in the morning find that Apple owes the Irish state “billions of euros” in back taxes when it rules that the technology giant’s tax arrangements in Ireland constituted a form of illegal state aid.
The ruling, to be announced in Brussels on Tuesday morning, will not stipulate a figure for the amount of tax owed, but will lay out a process and a formula by which the unpaid tax should be calculated.
It is expected that an indicative figure will be supplied by the Commission later in the day. Sources who have been briefed on the matter say the amount of tax Apple will owe will be in the billions, rather than the hundreds of millions of euros that Dublin had hoped for.
However, the Government will appeal the Commission’s finding, and says the money will not be available to spend, either now or in the future, ministers have stressed. Depending on the terms of the decision, Apple may be required to pay the funds into an escrow account in the coming months.
Aggressive campaign
Government ministers will embark on an aggressive campaign to rebut the Commission’s findings. “They are making up new rules for international tax,” said one minister last night. “They are trying to make us tax Apple for stuff that doesn’t happen here. It’s nonsense.”
Apple is also certain to reject the finding and will launch a strong defence, while political sources said that they expect the US government to weigh in later in the week in support of Ireland and Apple.
The Apple tax ruling The European Commission is to issue a ruling in relation to the tax arrangements of Apple in Ireland, where the phone giant has its European HQ. It looks certain the EC will confirm a preliminary ruling that Ireland offers Apple illegal state aid in how it allows it to pay tax. It will then tell Ireland it must collect tax from Apple but Ireland is expected to appeal such a ruling fearing it will damage the drive to attract inward investment. Q&A: Cliff Taylor answers the key questions I found this helpful Yes No
However, the larger than expected size of the sum at stake will complicate the politics for the Irish Government, which is determined to avoid having to take the money.
Legal fees
While Fianna Fáil has supported the Government’s decision to appeal the decision, there was fierce criticism from other opposition parties.
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“The Government is wrong to say they will appeal the decision no matter what,” said Pearse Doherty, Sinn Fein’s finance spokesman.
“They’ve been saying it’s a reputational issue. I think it’s more damaging to continue a fight that we will ultimately lose,” he said. The Government should accept the Apple money, he insisted.
People Before Profit TD Richard Boyd-Barrett said it was “outrageous” that the Government had already spent hundreds of thousands of euros on legal fees fighting the case.
Deputy Boyd-Barrett discovered through a parliamentary question that the Revenue Commissioners and the Department of Finance have already spent some €670,000 on legal fees fighting the case. The Government should accept the money as it would unpaid tax from any taxpayer, he said.
“This is money that could resolve our housing problems and the crisis in our hospitals,” he said.
Pay down debt
However, the Government insists that even if the money if eventually paid to the Irish authorities,they will not be able to use it to finance current or capital spending. Instead, under EU rules the money must be used to pay down debt.
The contentious investigation has been underway now for more than two years. It concerns two tax rulings which the Revenue gave to Apple in 1991 and 2007. Last week the US Treasury accused the European Commission of acting beyond its powers in its investigations of the tax affairs of US multinationals and in particular objected to the idea of tax being collected retrospectively.
However despite this the European Commission has pushed ahead with its final decision, which will be that Ireland offered illegal state aid to the US multinational.
Early estimates were that Apple could be asked to repay up to €19 billion in tax. While the final figure is expected to be substantially lower, sources say that there is no question but that it will be appealed by both sides.
The decision is expected to attract huge international attention. The Government is expected to immediately challenge the decision, saying that the reasoning used was unprecedented.

EU set to find Apple owes Ireland billions in back taxes


Government to embark on aggressive campaign to rebut the Commission’s findings


It may still be summer, but that isn’t stopping putative home buyers from seeking mortgage approvals, new figures from the Banking & Payments Federation Ireland (BPFI) show. In the year to July 2016, the number mortgage approvals jumped by 17.6 per cent to 3,274 , while the value of mortgages approved rose by 28.5 per cent to €659 million. This was the highest volume of mortgage approvals since the series began in January 2011.
There was strong growth in the number of first-time buyers (FTB) seeking approval (+14.7%) and they now account for 48.7 per cent of the total market. Trader uppers reported a similar growth in approvals, and they account for about a third of the mortgage market. While switchers are still a relatively small component of the market (7.5%), approvals for those looking to switch their mortgage soared by 90 per cent in the year to July, albeit above a low base, with just 245 approvals in total during the year.
The figures point to an uptick in mortgage activity since May 2016, after a slow start. Year-to-date (January to July), based on the three-month moving average, show that activity has changed little since 2015, with volumes down 2.6 per cent year-on-year and values up 1.2 per cent, reflecting the increase in the average FTB mortgage approval value.
However Philip O’Sullivan, economist with Investec, is targeting total mortgage drawdowns of € 5.5 billion for 2016, up by 10 per cent on 2015, and says that based on first half drawdowns (€ 2.3bn) and the aforementioned approvals data, “this target looks achievable”.
Mortgage competition
Competition in the mortgage market continues to heat up, with Bank of Ireland announcing on Monday that it is to give home buyers or switchers up to 3 per cent back on the value of their mortgage, if they also have a current account with the bank. This is more than the 2 per cent offered by both Permanent TSB and EBS, although homeowners should also consider the impact of interest rates when making a mortgage decision.

Mortgage approvals jump 17.6% in year to July


Home buyers prepare for autumn selling season by getting pre-approved in the summer; switchers continue to seek out the best deals to save money


Goodbody Stockbrokers is setting up a new investment banking division as it plots to win more business in the UK, where it has poached a senior executive from financial services group Canaccord Genuity.
The Irish brokerage, led by managing director Roy Barrett, set up a London office last year under a plan to move from being a local Irish broker to a sector specialist. The company has expanded its research coverage in recent years to include overseas companies in the gaming and leisure, construction materials, airlines and financial services sectors.
Its rival, Davy, has engaged in a similar strategy to lower its dependence on the Irish market as a series of companies have moved their main stock market listing to London from Dublin.
Under a plan communicated to staff on Tuesday, Goodbody has decided to merge its corporate finance and capital markets divisions into a new unit, called investment banking. This will be run by two co-heads, Stephen Donovan, currently head of capital markets, and Brian O’Kelly, head of corporate finance.
Goodbody has also hired Piers Coombs, currently head of Canaccord’s European equity capital markets, to take up a leading position by the end of the year in its London office as head of corporate business in the UK.
The appointment, together with the creation of an investment banking unit, is designed to position Goodbody to pitch for UK corporate brokerships and equity capital market mandates in future, Mr Barrett said.
A spokesman for Goodbody confirmed the contents of the email.
Recent transactions under Mr Coombs’ role at Canaccord include a £230 million (€270 million) equity raise by UK gambling software development company Playtech and online payments company Paysafe’s £450 million share sale last year.
Subsidiary
Meanwhile, Finbarr Griffin is set to become the new head of corporate finance at Goodbody. It is understood that Goodbody intends to wind up its incorporated subsidiary, Goodbody Corporate Finance, as the business is subsumed into the group.
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Following the overhaul, the group, which is 51 per cent owned by Kerry-based financial services group Fexco, will comprise three divisions: investment banking, wealth management and asset management.
The move comes a month after Mr Barrett told staff that there was no substance to industry speculation that Goodbody could be taken over by Investec.
Fexco acquired control of Goodbody in January 2011 from AIB, as the bank was selling off non-core assets in the wake of its Government bailout. At the time, Fexco took a 75 per cent stake, leaving staff and management at Goodbody with a 25 per cent holding. Staff and executives at the brokerage have since almost doubled their stake, after reaching incentive targets set at the time of the deal.

Goodbody plots UK assault with new investment banking unit


Brokerage poaches Canaccord’s head of European equity capital markets, Piers Coombs


Medical devices firm VistaMed is to create 200 jobs in Co Leitrim as part of a new €10 million investment programme.
The announcement was made as the company, which produces catheter and extrusion devices, officially opened a new research and development facility in Carrick-on-Shannon.
The company already employs 325 people in Co Leitrim where it is also in the process of expanding its current manufacturing facility in Rooskey, Co Leitrim, by 45,000 square foot.
Recruitment for the new roles is already underway with 37 jobs already filled. The company said it expected all positions to be filled by the end of 2019.
The company, which was founded in 1999, said it had seen increased demand in the global medical device market for the services it provided.

VistaMed to create 200 new jobs in Co Leitrim


Jobs come as part of a new€10m investment programme by the medical devices firm


Revenues at Total Produce rose by 10.4 per cent to €1.9 billion in the first half of the year, as the fresh food group got a boost from acquisitions and higher average prices.
In the six months to June 30th, total revenues rose by 10.4 per cent, while adjusted EBITA was up by 13.2 per cent and adjusted fully diluted earnings per share grew by 11.6 per cent. Profit before tax rose by 5.8 per cent to €25.6 million. The fruit distributor spun out of Fyffes said it benefited from acquisitions completed in the period and a circa 5 per cent like-for-like growth in revenue on the back of both volume growth and higher average prices. A strong operational performance was offset in part by a small negative impact on translation to Euro of the results of foreign currency denominated operations.
Chairman Carl McCann said the group delivered “a very strong performance” in the first six months of the year, as the group continued its expansion in north America in 2016, acquiring 65 per cent of Progressive Produce, a company headquartered in Los Angeles, as well as a number of other investments.
“ The group continues to actively pursue further investment opportunities,” Mr McCann said, adding that the interim dividend is up 10 per cent to 0.8096 cent per share.
“The group is now targeting increased full year earnings at the top end of the previously announced range of 10.50 to 11.50 cent per share,” he said.
On the UK’s decision to leave the European Union, Total Produce said while it has “created some macroeconomic uncertainties, it is not expected to have a material impact on the group”.
In a note, Davy Stockbrokers said it was a “strong” set of results, adding that the international segment represents “a significant growth opportunity” for the group, as it reiterated its “outperform” rating.


Acquisitions and expansion in north America boosts fresh food group as pre-tax profits jump 5.8%; Davy reiterates ‘outperform’ rating


A shop with four apartments overhead at 57 Francis Street in Dublin 8 is on the market at €695,000 through DNG Advisory.
Should it sell for its guide price, this would represent a gross investment yield of 8.6 per cent.
The ground-floor retail space is occupied by an antiques trader while the apartments are set out as three studio units and one two-bed.
These fully-let apartments and shop are producing an annual rent roll of €59,700 – but the agent says this could be increased “through active management”.
Francis Street, the heart of the antiques business in the city, has a big student population due to its proximity to the NCAD, Trinity College, St James’s Hospital and the DIT campuses at Aungier Street and Kevin Street.
The area is well serviced by public transport, including the Luas which is close by, while the city centre is within walking distance.

Apartments and shop in Dublin 8 for €695,000


Mixed-use property on Francis Street producing annual rent roll of nearly €60,000


A record number of military personnel have failed drug tests carried out by the Defence Forces.
According to the Department of Defence, 17 members failed random drug tests in 2015 – more than triple the five members who failed in 2014. A total of 13 personnel failed drug tests in 2013 and 16 in 2012.
According to the department, the Defence Forces drug testing team last year carried out 13 drug testing operations and tested a total of 1,184 personnel. Of these tests, 98.56 per cent proved negative.
The Defence Forces is committed to testing 10 per cent of the force each year.
Of the 1,184 drug tests in 2915, 51 were made at Defence Forces HQ, 76 in the Naval Service and 230 in the Air Corps. The largest proportion of tests – 773 – were carried out in Army brigades.
The drug testing programme was introduced in 2003. Since then, 105 personnel have tested positive.
A spokesman for the Defence Forces representative organisation, the PDFORA, said yesterday: “We take the issue of drug taking seriously and recognise the need to have drug testing procedures in place.”
The spokesman wouldn’t be drawn on the increase in positive tests last year.
Three options
Those who test positive face three options: they can retire; be discharged or face withdrawal of a cadetship; or continue in service if they can make a case that taking the drug was inadvertent or the result of some circumstance, such as a spiked drink.
Those who test positive for a controlled drug, as specified in the Misuse of Drugs Act 1977, are subject to an administrative process, including the testing of a “B” sample if so requested by that individual.
In the past, some of those disciplined as a result of testing positive have challenged the decision through the courts.

17 Defence Forces personnel failed random drug test in 2015


Number testing positive is more than tripple the number for 2014, and higher than 2013


US consumer spending increased for a fourth straight month in July amid strong demand for automobiles, pointing to a pickup in economic growth that could allow the Federal Reserve to raise interest rates this year.
The Commerce Department said on Monday that consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.3 per cent last month after an upwardly revised 0.5 per cent gain in June.
July’s increase was in line with economists’ expectations. Spending was previously reported to have risen 0.4 per cent in June. When adjusted for inflation, consumer spending also gained 0.3 per cent in July after advancing 0.4 per cent in June.
Consumer spending appears to have retained some of its momentum from the second quarter, when it grew at a 4.4 per cent annual rate, the fastest in nearly two years. That jump helped to mitigate some of the impact of a sharp inventory drop and prolonged business investment downturn.
The economy grew at a lackluster 1.1 per cent growth rate in the second quarter.
July’s consumer spending data added to reports on the goods trade deficit, industrial production, durable goods orders and residential construction that have pointed to an acceleration in economic growth early in the third quarter.
The Atlanta Fed is currently estimating third-quarter GDP growth rising at a 3.4 per cent annual pace.
Consumer spending is being driven by a tightening labour market, which is steadily lifting wages. Rising home values and stock market prices, which are boosting household wealth, are also supporting consumption.
Fed chair Janet Yellen told a gathering of global central bankers on Friday that she believed the case for raising interest rates had been strengthened in recent months by the “solid performance of the labor market and our outlook for economic activity and inflation.”
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Last month, there was little sign of inflation pressures even as consumer spending firmed.
The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, edged up 0.1 per cent after a similar gain in June.
In the 12 months through July the core PCE increased 1.6 per cent. It has risen by the same margin every month since March. The core PCE is the Fed’s preferred inflation measure and is running below its 2 per cent target.
Consumer spending last month was lifted by a 1.6 per cent surge in purchases of long-lasting manufactured goods such as automobiles. Spending on services rose 0.4 per cent, but outlays on non-durable goods slipped 0.5 per cent.
Personal income increased 0.4 per cent in July after rising 0.3 per cent in June. Wages and salaries advanced 0.5 per cent. Savings rose to $794.7 billion from $776.2 billion in June.
Reuters

US consumer spending rises in July; inflation remains tame


Demand for automobiles lifts spending, paves way for Fed interest rate rise this year


It’s confirmed: Apple is holding an event on September 7th.
Invites for the product launch, presumed to be that of the company’s latest iPhone, went out yesterday evening, telling attendees “See you on the 7th”, on a background of out of focus multicoloured lights.
Although it hasn’t confirmed the details, Apple is expected to unveil the iPhone 7 at the San Francisco launch. A new version of the Apple Watch, with GPS location tracking, and updated MacBook Pro machines may also feature at the product showcase.
Although the design of the new phones are expected to remain largely the same - a move that would push Apple out of its tick/tock product upgrade cycle - a number of new features are expected, including the removal of the headphone jack in favour of using the lightning connection, dual cameras and potentially ditching the Home button.
Those analysing the invitation for hints about Apple’s plans seem to think it implies a dual camera for the new phone and better low light photography.
“The real point to make is how little chance of a surprise there is,” said Colin Gillis, an analyst at BGC Partners LP, adding that two white spots of light in the invitation were indicative of the dual lens, while the event’s date hints at the likely iPhone 7 name. “The company doesn’t seem to be able to generate surprises anymore.”
The new handset will be an important addition for Apple, with the iPhone generating about two-thirds of the company’s sales. However, as people upgrade their handsets less frequently, Apple is facing a revenue decline this year.
Additional reporting: Bloomberg

Apple readies September launch of new iPhone


Company confirms event will be held next week


As corporate statements in this digital-first data hungry advertising environment go, WhatsApp’s reassuringly smug media primer, “remember, when advertising is involved, you the user are the end product”, was always likely to come back to bite.
Published by the free messaging app in 2012 in a blog post entitled “Why we don’t sell ads”, its advertising-free “hey we won’t sell out to the man” ambitions were lofty. And then, last Thursday, WhatsApp users learned there is no such thing as a free phone call: the company announced it is to share user data with its parent company, Facebook.
In a change to its terms and conditions WhatsApp quietly told its billion-plus users they have just 30 days to opt out before their phone numbers, online status and other information such as, for example, their software choice, will be handed over to Facebook. The social network with its 1.7 billion users, which has long been trying to winkle phone number and address books out of its own users, will then use WhatsApp numbers to improve its “friend suggestions” – which might sound vaguely friendly but more importantly it’s to offer better targeting to its advertising.
The new terms and conditions invite users to “Share my WhatsApp account information with Facebook to improve my Facebook ads and products experiences”.
WhatsApp, which has been admirably uncluttered in terms of advertising, says the change will not mean that banner ads will be appearing on its platform – so technically it will still not carry advertising – but that the “move will explore ways for you to communicate with businesses that matter to you”, a curious inversion of the dynamic of what happens in the real world of marketing communications where it’s not so much you that sets out to communicate with businesses but vice versa.
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Encrypted
The messages sent by WhatsApp users will still be encrypted end-to-end, meaning neither social media giants will be reading them so there is, so far anyway, no chance that the contents of a message might be data-mined and targeted by advertisers: that WhatsApp message you had with your friend wondering about the best drill to buy won’t result in a bombardment of ads for home improvement gadgets on your Facebook feed.
The new change, though, will permit business accounts who currently communicate through SMS, such as airlines advising of delayed flight or banks notifying of large withdrawals to communicate via WhatsApp – a move that users may fear will herald a slow drip, drip of advertising, or spam, into the app.
That Facebook should seek to leverage the WhatsApp user base for advertising purposes is hardly surprising. The company bought the mobile messaging service for $19 billion (€17 billion) in 2014 and while at the time WhatsApp said there would be no significant changes to its terms and conditions that seemed unlikely given the enormous number of customers and their data it was bringing the table.
While WhatsApp customers can opt out from their information being used for ad targeting by Facebook – by unticking the data sharing box having scrolled down the very many pages of terms and conditions – they will not be able to stop their data being shared by WhatsApp to its owner Facebook.
Bone of contention
The fact that users have to actively opt out (as opposed to the more transparent consumer-friendly opt-in mode) is already a bone of contention as are the obvious data protection issues that arise with such a transfer of personal information – suddenly WhatsApp which publicly prided itself on its emphasis on privacy doesn’t seem so private anymore.
With 25 days to go, it is difficult to gauge how many WhatsApp users will seek to limit the use of their data by Facebook for advertising purposes by opting out, or how many will delete the free app and change over to one of its competitors such as Telegram. Or, as is most likely, will passively accept that as Facebook has so much information on them anyway, it may as well have their numbers.
Last year, media planning agency MediaVest in a survey of 1,000 Irish online users found that while a vast majority said they were concerned about privacy issues in the online space, only 15 per cent could be bothered to even read the terms and conditions. Inertia is the advertiser’s friend.

WhatsApp changes the rules and hopes for opt-out inertia


User data will be shared with Facebook but most of us won’t do anything about it


Davy has hiked its pre-tax profit forecast for FBD by 70 per cent for next year as the insurer continues to turn around its business and raise coverage rates.
The move comes after Ireland’s only publicly-quoted insurer reported earlier this month that its first-half loss narrowed by 96 per cent to €3.65 million as it hiked premiums by an average 7 per cent and avoided having to set aside further reserves for claims from previous years.
The company, which aims to return to underwriting insurance at a profit by the end of this year, having been loss-making since 2014, may post a full-year pretax loss of €157,000 for 2016, according to Davy. FBD reported a €85 million last year.
Davy now sees FBD turning in a pre-tax profit of €16.1 million next year, up 70 per cent from its previous estimate, before earnings almost double the in 2018 to €30.6 million.
Motor claims have soared in recent years as more cars take to the roads in a recovering economy, court awards have been increasing, and insurers have been less able to rely on investment income to cushion the blow, as they grapple with record-low global bond yields.
The Government and various industry initiatives are currently underway to identify and tackle the cause of insurance claims and cost inflation.
FBD chief executive Fiona Muldoon has said that the Personal Injuries Assessment Board legislation needs to be strengthened in the first instance to give PIAB powers to compel co-operation from both sides of a claim “so that every settlement is not adversarial, with two sets of lawyers and two sets of experts”.

Davy hikes insurer FBD’s 2017 forecast by 70%


Insurance group targets return to underwriting profit in fourth quarter


The skyline of New York is being transformed by the biggest real estate development ever in the US.
The project, called Hudson Yards, will see new skyscrapers tip the clouds and cover an area of 28 acres of midtown Manhattan between 10th and 12th Avenues and from 30th-33rd Streets. The site is bounded to the west by an elevated parkway, the Highline.
The $20 billion development by privately owned US Related Companies and Toronto-headquartered Oxford Properties will include more than 17 million sq ft of commercial and residential space.
Ambitious scheme
It will include 100-plus shops, a collection of restaurants and food outlets, 4,000 residences, a 750-pupil public school, a 200-room hotel, a cultural space called the Shed and 14 acres of public parks. The extension of the No 7 Subway line will also serve Hudson Yards.
The yards refer to the rail yards of the Metropolitan Transport Authority, Amtrak, New Jersey Transit and the Long Island Rail Road where the development is happening. The massive construction project is being built on two platforms over the existing 30 active tracks where the trains are stored.
There are 23,000 working on the construction phase, and when completed in 2024, 125,000 people will work in, visit and call Hudson Yards home.
Manhattan stands on bedrock and 300 caissons are being drilled 20-80ft into the rock to form the platforms for the development. The trains will be cooled by massive fans similar to aircraft engines. The platforms are engineered to support large scale planting and act as a reservoir for storm-water management.
The first phase of the project, 10 Hudson, a 52-storey block, opened on July 1st, and the initial tenants are Coach and L’Oreal. Space has also been rented by SAP, The Boston Consulting Group and Sidewalk Labs, a subsidiary of Alphabet.
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The tallest block will be 30 Hudson Yards at the southwest corner of 33rd Street and 10th Avenue. The 1,296ft tall building will be 90 storeys, and the second tallest in the city with 2.6 million sq ft. Designed by Bill Pedersen of Kohn Pedersen Fox Associates, it will have the highest outdoor observation desk in Manhattan. The One World Observatory stands at 102 storeys high.
Early movers
Time Warner has already acquired 1.5 million sq ft of office space and plans to move 5,000 employees from its corporate operations as well as CNN, Turner Broadcasting and Warner Bros entities under one roof for the first time. KKR, a global investment firm, has acquired the top 10 office floors of 343,000sq ft, and Wells Fargo has taken 500,000sq ft. Both firms are relocating their corporate offices to the tower.
The first residential building to open will be 15 Hudson Yards at 30th Street and 11th Avenue. The 910ft tall block will offer 391 units for sale and for rent. It will be adjacent to the Highline and have access to the Shed. The Shed cultural space will be a multi-purpose venue and is expected to be ready for New York Fashion week in 2019.
Residents will have unobstructed views of the city and the Hudson River. There will also be a fitness centre by Equinox, concierge lobby, garage, valet parking and pet-friendly services. The building is expected to be completed in 2018.
The other two towers will be 35 Hudson Yards, a mixture of residential, Equinox Hotel, Equinox Fitness, offices and retail, and 55 Hudson Yards, at 780ft block which will have 1.3 million sq ft of offices. It was designed by A. Eugene Kohn of KPF Associates and Irish-born Kevin Roche, a Pritzer Prize winning architect, and will have a dramatic outdoor terrace on the 10th floor.
A one million square foot seven-storey mall will house the shops and restaurants at Hudson Yards. There will be the first Nieman Marcus luxury department store in New York City and more than 100 retail units.
Six acres of gardens and public plazas in the Eastern Yard will have a major piece of public art designed by English sculptor Thomas Heatherwick and costing more than €150 million to develop. The design is being kept secret for the moment but is expected that it will be to Manhattan what the Eiffel Tower is to Paris.

Massive real estate development to alter New York skyline


Hudson Yards will see new skyscrapers and cover 28 acres of midtown Manhattan


Apple said it paid a total of $800 million (€718.6 million) of tax on European profits routed through its Irish entities in 2014, disputing a key element of the European Commission’s case that it received selective tax advantage in Ireland.
The Commission ordered Ireland to collect up to €13 billion in unpaid taxes, plus interest, from Apple for the period between 2003 and 2014, after ruling that the iPhone maker received special tax advantages in Ireland, amounting to state aid.
EU competition commissioner Margrethe Vestage said this allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2013, down to 0.005 per cent in 2014.
In a questions and answers document for investors, published on Apple’s website on Wednesday morning, the company said that the figure quoted by the Commission were “extremely misleading and deceptive”.
“We paid $400 million in taxes in Ireland in 2014 - considerably more than the Commission’s figure suggests,” Apple said. “We were certainly one of the largest corporate taxpayers in Ireland that year, if not the largest.”
In addition, Apple paid $400 million of current US taxes on those profits, bringing total current taxes paid to $800 million, it said.
“Most importantly, the Commission completely ignores the fact that the vast
majority of those profits was subject to US taxation,” Apple said.
While both Apple and the Irish Government plan to appeal the EU’s decision, the California-based group said it expects it will have to place “a small amount of cash in an escrow account”, pending the final outcome of the appeals process, which is likely to take several years.
Apple said it does not expect any near-term impact on its financial results or a restatement of previous earnings as a result of the decision.
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“We have previously accrued US taxes related to the income in question,” it said, adding that it does not currently expect the EU ruling to impact its tax rate in future.

Apple disputes EU sums as it paid $800m tax on European profits in 2014


iPhone maker posts questions and answers document for investors on Thursday


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Apple, the iPhone maker, said the EU’s ruling on Tuesday that it owes Ireland up to €13 billion in unpaid taxes “will have a profound and harmful effect on investment and job-creation in Europe”.
“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” the technology giant said in a statement.
The EU’s competition arm said that Apple had been granted selective treatment by Ireland through two tax rulings granted to the company in 1991 and 2007 by the Revenue Commissioners in Dublin.
That treatment allowed Apple to avoid taxation on almost all profits generated by sales of its products in the EU single market because Apple recorded the sales in Ireland rather than where products were sold, the commission said.
However, Apple said the EU’s case was not about how much Apple pays in taxes, it’s about which government collects the money.
“Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned,” it said.

Apple says EU ruling will hit investment, job-creation in Europe


iPhone maker says EU’s tax ruling ‘an effort to rewrite Apple’s history in Europe’


Shannon Foynes Port handles almost more than €7 billion in trade every year, according to a report commissioned by the State company that runs mid-western harbour.
Research by W2 Consulting, based on 2014 figures from the port itself and 31 companies using it, shows that it is worth €1.9 billion to the wider economy and handles €7.6 billion in trade annually.
It also shows that Shannon Foynes Port Company and its customers plan to spend €277 million between them over the five years to 2019, which will support 3,372 jobs in the region.
The port company intends spending €130 million on an expansion plan, dubbed Vision 2041 , that will exploit advantages such as its deep water and sheltered harbours to develop an international trade hub there.
Investment
Combined with private sector capital spending, investment there will total €1.8 billion over the plan’s lifetime.
Chief executive, Pat Keating, said that Shannon Foynes will fund its share of this investment from its own resources. “We are generating the cash flow to do this,” he said.
As the EU recognises it as a core European port, Brussels provided it with €3 million last year to aid development. Mr Keating said that it will be able to get more funding from this source as time goes on.
He explained that the company commissioned the study to demonstrate the port’s worth to the regional and national economies.
“We always knew that it had a huge impact, but we didn’t have the figures to back that up,” Mr Keating said. “These are hard figures, collated from at the primary source, there’s no extrapolation.”
Launching the report, Shannon Foynes chairman, Michael Collins, confirmed that business at the port has overtaken levels achieved at the height of the boom in the first decade of the century.
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“We have a clear vision for the company that envisages it doubling its trade over the lifetime of our masterplan and driving very significant employment growth across the region,” he said.
Ambition
He added the completion of the proposed Limerick-Foynes road, already included in Government spending plans, was essential to this ambition.
“The other key project is the regeneration of the disused Limerick to Foynes rail link and a major feasibility study is being advanced in relation to that,” Mr Collins said.
The report’s author, Mark O’Connell, pointed out that the port has already attracted significant investment since the masterplan’s launch in 2013.
“If you take the capital expenditure of €277 million planned by Shannon Foynes Port Company and its customers up to 2019, that’s almost seven times the investment in redeveloping Thomond Park, ” he said.
“ That’s an indication of the importance that the port authority and the estuary will have in the years ahead.”
The port company has statutory jurisdicction over all marine activities and port management on the Shannon Estuary, covering 500 sq km from Kerry and Loop in Co Clare to Limerick city.

Shannon Foynes Port handles €7.6bn a year in trade


Study supports State company’s expansion plans


The case for raising US interest rates in the United States has strengthened in recent months because of improvements in the labour market and expectations for moderate economic growth, Federal Reserve chair Janet Yellen said on Friday.
Ms Yellen did not indicate when the US central bank might raise rates, but her comments reinforced the view that such a move could come later this year. The Fed has policy meetings scheduled in September, November and December. Speaking at a three-day international gathering of central bankers in Jackson Hole, Wyoming, Ms Yellen said the “US economy was nearing the Federal Reserve’s statutory goals of maximum employment and price stability”.
“In light of the continued solid performance of the labour market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” Ms Yellen said in prepared remarks.
‘Gradual’ increases
She added that the Fed still thinks future rate increases should be “gradual”. The Fed raised rates in December, its first hike in nearly a decade, but it has held off further increases so far this year due to a global growth slowdown, financial market volatility and generally tepid US inflation data.
Investors currently see an 18 per cent probability the Fed will raise rates at its September policy meeting and a 53 per cent chance of an increase in December, according to CME Group’s FedWatch tool.
Ms Yellen’s comments, by failing to lay out a clear roadmap for what the Fed needs to see to raise rates, will likely not convince some investors that a rate increase is imminent, in part because Fed policymakers are seen as sharply divided over whether to increase rates soon or take a more cautious approach.
Ms Yellen was speaking on Friday at a Fed conference on designing new monetary policy frameworks, with central bankers eager to find new ways to stimulate economies even after they have cut rates to near zero and flooded banks with money.
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Future recessions
She devoted much of her speech to outlining how the Fed may deal with future recessions now that many economists and Fed officials believe that an aging population and other dynamics appear to be slowing US economic growth over the long term. Because slower growth means future US interest rates will likely also need to be lower on average, some analysts have suggested that the Fed will have less room to fight future recessions because there will be less room to cut rates.
Such a view is “exaggerated,” Ms Yellen said, because the Fed will be able to use bond purchases and forward guidance to ease conditions. It may also want to explore other options, including broadening the range of assets it can purchase, raising the inflation target, or targeting nominal GDP, she said.
– (Reuters)

Fed’s Janet Yellen says case for US rate hike has strengthened


Case bolstered by improving labour market conditions and economic growth expectations


It came, not quite at the last minute, but close enough that thousands of motorists have already switched their toll tag provider. From tomorrow, August 31st, drivers on motorways around the country were expected to face extra delays because their electronic tags, which allow them to fast-track the tollbooth, were no longer expected to work on certain roads controlled by the Celtic Roads Group (CRG), including the M7 and M8 (Portlaoise to Castletown, and Portlaoise to Cullahill).
It was thought that up to 80,000 drivers would have been affected by the disagreement between toll service provider eFlow and motorway operator CRG, which meant that their eFlow electronic tag would longer have worked on certain roads.
These eFlow customers would have had to pay cash at these toll plazas, while their tags would have continued to operate as normal on the following motorways: Dublin’s M50; M3 (Clonee-Kells); M4 (Kilcock-Enfield-Kinnegad); N6 (Galway-Ballinasloe); N8 (Rathcormac-Fermoy Bypass); East-Link Bridge; Dublin Port Tunnel; and Limerick Tunnel.
However, late on Friday agreement was finally reached, as CRG agreed to accept eFlow tags on the following roads: M1 from Gormanston to Monasterboice; the M7 and M8 (Portlaoise to Castletown, and Portlaoise to Cullahill) and the N25 (Waterford City bypass).
The dispute is understood to have arisen because of a failure to renew a contract between eFlow operator Transport Infrastructure Ireland (formerly the National Roads Authority) and roadbuilder Celtic Roads Group. It is understood that Celtic Roads Group was not happy with the level of charges and had delayed renewing a service agreement that expired earlier this year.
Minister for Transport Shane Ross welcomed the agreement, saying it was “good news for road users and it means eFlow tags will continue to be recognised at all toll points across the country”.
In the run-up to the agreement however, anxious motorists around the country had already started to make the switch, fearful of being stuck in tailbacks at the toll booth. If you’re used to just driving through the “easy pass” lane on roads such as the M7, taking the time to pay at a booth will likely frustrate you, while some drivers who try to use their tag in the “easy pass” lane may find that they have to turn around, potentially causing further delays.
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Indeed, alternative tag provider Easytrip says that visits to its website soared by 400 per cent in recent weeks, with some 20,000 eFlow customers having made the move by August 24th.
But, while the onus on motorists to switch has now been removed, could there still be a case to check out your options and save money by switching? And if you’ve never had a tag, is it worthwhile getting one to make savings of as much as 33 per cent?
Should I
get another tag?
If you have never had a tag and are considering getting one, it may be worth your while if you’re a user – even infrequent – of roads such as the M50, which charge tag users less. For example, if you pay as you go, you’ll be charged €3.10 each time. If you sign up for either a video account, where the toll is debited from your account and you don’t pay a monthly service fee, the toll drops to €2.60, or €2.10 if you have a tag.
Another factor is late payments. If you use the M50 but forget to settle the payment before 8pm the day after you have travelled, either online or at a Payzone outlet, it’s likely that you will receive a penalty letter.
These can quickly add up. If you miss the first deadline, you’ll be liable for €3; should you leave it more than 14 days to settle up, you’ll face a fine of €41; and if the fine isn’t paid within 56 days, the penalty soars to €150 (€41+€103+€3+€3.10) and you may face legal proceedings.
However, infrequent users should note that they will face costs in either buying, or renting a tag, and this may mean they could be better off simply paying as they go, provided they remember to always settle their bill on time.
What are my options?
There are four providers of tag accounts in Ireland, including eFlow.
Deciding whether to use a tag depends on how often you use a motorway. If you use the M50 just twice in a year, for example, it’s hardly worth paying the monthly administration charge of about €1.25 most providers charge.
Pay-as-you-toll options require you to pre-fund your account, while those that charge a monthly administration fee typically automatically top up your account without you having to do anything.
But you can also pay upfront for a tag, with a provider such as ParkMagic. It charges €30 for its tag, and the only additional charges arise when you use the tag, at a cost of 10 per cent of the toll. It’s convenient but costly.
Another option is a tag from Easytrip, which costs €25, but its actual cost works out at about the same as ParkMagic, as you will also pay a monthly fee of €0.62 for the tag, which makes a total of €32.44 a year.
On the other hand, if you’re a frequent user the frustration of queuing will likely mean that you’ll pay this fee for the ease of using the fast lane. This generally means “renting” a tag by paying a monthly administration fee. Easytrip, for example, charges €1.23 a month, as does eFlow, while DirectRoute charges €1.25. This is about an extra €14 a year.
While it’s a difficult thing to do, considering you’ll likely have it stuck to the inside of your car, beware of losing your tag. Easytrip, for example, charges €15.25 to replace a tag, and it charges €8.61 if a direct debit is returned unpaid.
Some providers, such as DirectRoute and ParkMagic, seek a €20 deposit, which is typically fully refundable but still leaves you out of pocket by that amount while you use the tag.
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Another option for M50 users is a video account, which saves €0.50 each time. While the savings may not be as great as with a tag account, no monthly administration fee applies. So, for example, if you use the M50 10 times a year, you will pay €26 with a video account, compared with €31 if your car is not registered. For light to medium users, then, a video account can make sense.

Taking its toll: how motorists can cut the toll of road tag costs


Regular users of toll roads should consider their tag options


Mondelez International, the maker of Oreo cookies and Cadbury chocolates, said it was no longer pursuing the acquisition of Hershey Co, two months after the US chocolate company turned down its $23 billion cash-and-stock bid.
The abandoned deal, which would have created the world’s largest confectioner, underscores the grip that a charitable trust has on the maker of Hershey’s Kisses and Reese’s Peanut Butter Cups. The trust which controls Hershey was set up by the company’s founder over a century ago to fund and run a school for underprivileged children.
Hershey rejected a $107 per share acquisition offer from Mondelez at the end of June.
An unrelated row between the trust and the Pennsylvania Attorney General’s office ensued over the trust’s governance, which resulted in a reform agreement being announced at the end of July. The agreement calls for the trust’s board to be expanded from 10 members to 13, and for five members to resign in order for 10-year terms to be enforced. One trustee resigned last month, leaving a total of nine openings.
Mondelez’s chief executive Irene Rosenfeld approached Hershey chief executive John Bilbrey again last week, and indicated that Mondelez would be willing to offer up to $115 per share for Hershey, according to a source familiar with the discussions who asked not to be identified because they were confidential.
Hershey responded that the trust would not be able to consider an offer until it is reconstituted next year, the source said. Even then, Hershey would not be willing to enter into deal negotiations for an offer of less than $125 per share, the source added. Hershey did not respond to a request for comment.
Its shares fell 11.4 per cent in after hours trading in New York on Monday to $99.00. “Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement,” Rosenfeld said in a statement. The Hershey trust holds 81 per cent of the company’s voting stock, and so a sale is not possible without its approval. About two-thirds of its $12 billion in assets are in Hershey stock.
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Mondelez’s offer was half in cash and half in stock, sources have said. This means new board members of the trust, which must approve any sale of Hershey, could use such a transaction to substantially reduce its exposure in Hershey by partially cashing out on its stake. “While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions,” Rosenfeld said on Monday.

Mondelez abandons pursuit of US chocolate maker Hershey


Maker of Cadbury chocolates shelves deal two months after Hershey turned down its $23 bn bid


The scale of the Apple tax bill has suddenly complicated the politics of the matter for the Government.
Even though there is no prospect of the Irish Government getting its hands on the money immediately – it will be placed into an escrow account pending the outcome of an appeals process likely to take years – the Government will certainly take a lot more flak for seeking to use all the legal and political tools at its disposal to avoid receiving the Apple windfall in the future.
Bombshell
“There would be no problem in appealing it if it was only a couple of hundred million euros,” one Minister said this morning. “But €13 billion? Jesus . . . .”
In recent days, Government sources suggested at first that the number was likely to be in the hundreds of millions; yesterday that estimate had risen into the billions. Today’s bombshell was a lot nearer to the “worst case” scenario for Apple, estimated by JP Morgan at €19 billion.
That’s worst case for Apple – but is this worst case for Ireland? Given its determination to avoid actually taking the money, it’s certainly a much bigger problem for the Government.
Minister for Finance Michael Noonan has already issued an extremely strongly worded statement rejecting the commission’s decision and outlining his intention to appeal it. A Cabinet meeting may be held as early as tomorrow to formally decide on an appeal.
Appeal
This assumes that the independent Ministers, including the Independent Alliance, are happy to proceed with the appeal. Minister for Finance Michael Noonan met the Alliance Ministers yesterday afternoon to brief them on the issue and outline his plans to appeal, but nobody was aware of the quantum at that stage. Noonan seemed to be indicating a few billion at that stage, according to sources briefed on the encounter. Not thirteen though.
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The Independent Alliance Ministers are meeting this afternoon again to consider the matter, it is understood. If they object to the Government’s appeal and prevent a unified Cabinet decision, then the coalition is probably over, though there is no indication from any of them at this stage that they are preparing to do that.
What is clear though is that they, like everyone else, realises how the context is changed by the vastness of the sum which Apple will now have to pay to Ireland.
The €13 billion figure will turn up the political noise several notches. Wait for Liveline, wait for the social media tsunami, wait for the infographics on what you could get for €13 billion. Wait for the opposition assault on the notion of a Government trying desperately to avoid the biggest windfall in the history of the state.
As well as presenting Ireland with a large cheque, the commission has also presented the Irish Government with a very tricky problem.

Sheer size of Apple tax bill complicates things for Government


The €13bn figure means the political noise will be turned up to 11


Clothes retailer Abercrombie & Fitch Co posted a bigger-than-expected loss for the second quarter as efforts to win back shoppers through store remodelling and other measures failed to boost sales and are not expected to do so for the rest of the year.
The retailer’s about-turn from a forecast issued in May, when it said it expected results to improve in the second half of the year, sent its shares tumbling more than 14 per cent in premarket trading on Tuesday. Abercrombie’s sales dropped for the 14th straight quarter and comparable sales fell a slightly steeper-than-expected 4 per cent, mainly due to lower traffic, including from tourists, at its flagship stores.
“Comparable sales [will] remain challenging through the second half of the year, with a disproportionate effect from flagship and tourist locations,” the company said.
Abercrombie, like other teen apparel retailers, has posted a string of sales declines as it struggled to compete with the trendier and often cheaper products at fast-fashion retailers such as H&M and Inditex’s Zara. To win back shoppers, Abercrombie is investing heavily in remodelling its Hollister stores, has hired designers from top brands to keep up with trends and shifted away from the logo-centric designs that were once a big draw.
Abercrombie said its cost of sales dipped 0.6 per cent, stores and distribution expenses dropped 1.6 per cent, while marketing, general and administrative expenses fell 7.3 per cent in the quarter ended July 30th. But, that was not enough to offset a 4.2 per cent fall in net sales.
– Reuters

Abercrombie & Fitch no longer expects results to improve this year


Efforts to win back customers with store revamps and other measures does not work


Grafton Group posted a 12 per cent increase in adjusted operating profit in the first half as strengthening Irish and Dutch economies offset weakness in its UK builders merchanting business amid concerns about Brexit.
Adjusted operating profit rose to £68.4 million (€80.3 million) from £61.2 million for the same period last year, helped by the €91.5 million acquisition late last year of a Dutch took distributor, Isero.
However, the Dublin-based company said its trade-only Selco Builders Warehouse business continued to see its profits grow during the first half even as the group’s traditional UK merchanting businesses faced “more challenging markets”.
“Progressively weaker trading conditions were encountered during the period at a time of increased uncertainty in the lead-up to the UK’s EU referendum,” Grafton said on Wednesday.
The group had previously warned in mid-July that its UK merchanting sales had dipped in June and that Brexit is likely to dampen demand for new housing and home improvements for the remainder of the year in its most important market.
On Thursday, it said: “It is still too early to assess the likely impact on the UK economy of the vote to leave the European Union. Following weak trading in June, demand in the UK merchanting business was relatively flat during July and August with markets remaining very price competitive.”
Grafton said its Woodie’s DIY retailing business in Ireland performed well as a result of management actions combined with increased household spending in the sector.
The interim dividend approved by the board has been increased by 6 per cent to 4.75p, in line with its progressive dividend policy.

Grafton profits rise even as UK merchanting struggles


UK merchanting sales were ‘relatively flat’ in July and August after Brexit vote


Revenues at Total Produce rose by 10.4 per cent to €1.9 billion in the first half of the year, as the fresh food group got a boost from acquisitions and higher average prices.
In the six months to June 30th, total revenues rose by 10.4 per cent, while adjusted EBITA was up by 13.2 per cent and adjusted fully diluted earnings per share grew by 11.6 per cent. Profit before tax rose by 5.8 per cent to €25.6 million. The fruit distributor spun out of Fyffes said it benefited from acquisitions completed in the period and a circa 5 per cent like-for-like growth in revenue on the back of both volume growth and higher average prices. A strong operational performance was offset in part by a small negative impact on translation to Euro of the results of foreign currency denominated operations.
Chairman Carl McCann said the group delivered “a very strong performance” in the first six months of the year, as the group continued its expansion in north America in 2016, acquiring 65 per cent of Progressive Produce, a company headquartered in Los Angeles, as well as a number of other investments.
“ The group continues to actively pursue further investment opportunities,” Mr McCann said, adding that the interim dividend is up 10 per cent to 0.8096 cent per share.
“The group is now targeting increased full year earnings at the top end of the previously announced range of 10.50 to 11.50 cent per share,” he said.
On the UK’s decision to leave the European Union, Total Produce said while it has “created some macroeconomic uncertainties, it is not expected to have a material impact on the group”.
In a note, Davy Stockbrokers said it was a “strong” set of results, adding that the international segment represents “a significant growth opportunity” for the group, as it reiterated its “outperform” rating.


Acquisitions and expansion in north America boosts fresh food group as pre-tax profits jump 5.8%; Davy reiterates ‘outperform’ rating


Until such time as the Guinness Pro12 dips into the US gravy train, it’ll just have to make do with a cross-border competition from four different countries.
At last Tuesday’s seasonal launch in the Aviva Stadium, the ever-eloquent Gerald Davies, Pro12 Rugby chairman, called upon everyone to embrace the Pro12’s cross-border diversity, and having quoted William Shakespeare at last season’s launch, concluded his opening address by quoting Robert Browning this time.
“A man’s reach should exceed his grasp, Or what’s a heaven for?”
It’s doubtful that many of those even competing in the Pro12 would be quite so moved, but then again on reflection, Connacht’s stirring and stunning triumph – along with the decision to have the final in Murrayfield – was something of a boon for the competition, even if Leinster might not have seen it that way.
Wearying effects
From the moment the two sides met a week after the Six Nations at the Sportsground, Connacht’s unlikely rise gave the Pro12 a climax it hasn’t known in years, which was all the more welcome given the wearying effects of a World Cup season.
The organisers have ensured a climactic ending to the regular 22-game campaign this season with a manufactured conclusion on May 6th, which has, all too predictably, been entitled Super Saturday.
All six matches will kick off at the same time and will be parochial affairs: two Welsh and Irish derbies, with Glasgow facing Edinburgh and Zebre taking on Treviso. The playoffs will take place a fortnight later, with the final at the Aviva Stadium on May 27th.
So an interesting, localised finale is seemingly assured, as is usually the case, for the Pro12 has historically been illuminated with high-quality semi-finals and finals.
Last year was no exception, with Leinster and Connacht producing their best performances of the campaign in their home semi-finals, and Connacht going better again in the final.
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The organisers’ decision in advance to have the final in Murrayfield was not without its bad planning – clashing as it did with the Edinburgh marathon – but on balance the sense of occasion and record attendance for a final proved a benchmark for the often troubled competition.
Having the final at the Aviva appears the likeliest way to replicate that sale of 35,000 tickets last May, while there remains the forlorn hope that Dublin hoteliers won’t rip off customers on the same scale.
There must also be the hope that the Welsh RFU will pitch their bid for the 2017 final at the Principality Stadium in Cardiff.
Whether the Italians are yet ready to host a final is a moot point, but rotating the final at the main stadia in each participating country would ensure the competition’s growth, and certainly Italy retains the most potential, as yet untapped, for the tournament’s further development.
Priority
Of course, the league remains a particularly hard competition to sell in Wales.
The Pro12 chief executive, Martin Anayi, has said increasing the tournament’s fan base is their priority and with disgruntled Welsh fans specifically in mind, have thus decided to abandon Sunday matches in Wales. This will be well received in the other countries as well.
Even so, the Welsh have always seemed like reluctant participants having lost their much cherished Anglo-Welsh League. The clear signals from the English clubs are that they are doing just dandy for themselves.
So too, of course, are the French, whose impending €98 million a year deal with Canal+ for rights to the Top 14 and Pro D2 dwarf the undisclosed but relatively modest combined rights for the Pro12 of around €11 million. Securing increased TV rights is paramount.
Whatever about a climactic run-in and final few weekends, where – or more accurately when – the league struggles is from the November window through to the end of the Six Nations in mid-March. What with the December and January rounds of European matches, the league is left sucking the hind tit of the season. It just becomes very staccato and the league’s leading lights rarely feature.
The World Cup pretty much had the same effect on the first three months of last season’s campaign, so it’s little wonder that the Pro12 only caught fire from mid-March onwards. This season, therefore – with teams and players wanting to make an impression both in the opening six rounds of the league and the first forays into Europe – should be different.
Another difference, of course, is that Connacht are reigning champions.
From their opening day joust with Glasgow, they will be a target now, as John Muldoon admits. “The surprise factor is gone. I would imagine there won’t be too many teams coming to the Sportsground and resting players or leaving some of their international contingent behind. That in itself will pose a big challenge for us. The key last year was that our away form was so good. It will be difficult. It is not a Wold Cup year so there will be a tighter focus and we are also involved in the Champions Cup. It is a huge challenge.”
Yet they were deserving champions, and are capable of making hay again through the November and Six Nations windows. They won five of the first six before and during the World Cup, and four from four from the week before the Six Nations until the end.
Gregor Townsend, who coached Glasgow to their first title two seasons ago before Connacht wrenched it from their grasp on successive days at the Sportsground, does not believe Connacht will fade away.
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“No, they’ve got a formula that worked for them. I’m sure they’ve been doing that in pre-season. They always had that aggression, that passion playing at home; what Pat [Lam] has done is make them more ambitious and certainly improve their skills.
“The final was a great example of taking on one of the best defences in Europe and finding gaps and running the ball from your own 22. I think they’ll have the same approach and will be very tough to beat.
“In the first half of the season no one was tipping them to get to the playoffs. They had to build their confidence through their performances, and they should start the season with that confidence. I genuinely mean this – any one of seven or eight teams could win.”
Competitive
Facing into his last season as the Glasgow head coach before succeeding Vern Cotter at Scotland, Townsend said: “I see this Pro12 being more competitive than the last two, which were already pretty competitive with four or five teams pushing right to the wire. I can see seven or eight teams this year in the mix. We’ve all got our players from the beginning of the season, so you should see teams really competitive right at the beginning.”
Ulster, boosted by the arrival of Charles Piutau to add to their attacking riches and with the Kingspan such a fortress, should be one of those contenders. Without the same potency, Rassie Eramus will assuredly need time at Munster, and akin to the Welsh, the league does not seem to do it for their supporter base.
Indeed, perhaps more than any of the Irish teams, Munster’s history dictates their fanbase will judge them more by what they do in Europe.
Asked if he was glad that there would be no World Cup this season, as there was in his first, trying campaign as Leinster head coach, Leo Cullen quipped that he’d miss watching such a high-quality tournament. But his answer was laden with sarcasm.
Leinster and Glasgow have been the league’s most consistent sides in recent years and having supplied over 20 players apiece to the World Cup, they were assuredly hardest hit last season and thus should be less affected this. Even then, they still finished first and third.
So by rights, they should be there or thereabouts again.

Guinness Pro12 has lots of promise - even if it’s crying out for a little love


It may lack glamour but the competition’s structure should ensure an exciting climax