Who made money in 1983?
1983 was not a good year for most of us. Employment was down, prices were up. PRSI payments jumped and private savings plummetted. Workers lucky enough to have jobs found their unions hamstrung by tightfisted managements and themselves humbly accepting smaller pay rises. Home ownership, once the security of the working class, turned into a bad joke as Ireland's property market collapsed. St Vincent de Paul, once the helping hand to society's neediest, began receiving its first requests for help with home mortgages, from the very people who used to contribute to the charity. For most Irish people, 1983 was a very tough year.
For a handful, however. the past 12 months have been a bonanza. Several computer whizzes have turned into millionaires. A District Court Judge could retire on the profits from his race horse. A horse breeder was able to avail of Ireland's tax incentive for the horsey set which makes stallion fees tax free: he made over £1 million without paying a penny to the Revenue Commissioners.Several Irish Athletes (and amateurs at that) are living quite comfortably on the proceeds from their endorsements and prize money. Physical fitness fanatics have been able to capitalise on the public's desire to be thin by opening dance/exercise studios. Dozens of investors watched with delight as their gamb¬ling in the stock market paid off with the Irish Sea oil find and as Atlantic Resources shares shot from 80 pence to £9. In spite of the recession in the construction trade, some developers, especially those which last year expanded overseas, have made a bundle as has nearly every business with an American subsidiary. People being paid in dollars or sterling found themselves being treated to almost weekly pay rises as the punt fell in value. An Irishman won the Sweeps in October and suddenIy found himself wondering where one cashes a chequefor £125,000.
Then there are those who directly benefitted from the rest of society's misfortune. The professional receivers and liquidators who made a great deal of money wrapping up bankrupt businesses and legal aid lawyers who earned their living by representing the unemployed in court.
Most of the people who made money in 1983 did not work all that hard. Many had a good eye for horse flesh, others got lucky in the stock market. Some struck oil; others left the country.
The most sensational get-rich-quick story of the year was undoubtedly the Atlantic Resources find off the coast of Waterford. Unfortunately, news of the strike came too late for most people to buy in at bargain prices (shares were in the six pound range when the news broke in July). For those who regularly play the stock market, the Atlantic Resources shares were attractive when they were at rock bottom, below one pound.
Because nobody in Ireland was buying Atlantic Resources when the shares were going for 80p, the biggest winner in the oil find is reckoned to be an Arab named Suleiman lilyan, a director of Mobil Oil who runs his own petrochemical company called Competrol. Through contacts made with Tony O'Reilly, Olyan learned of the Atlantic Resources venture and decided to invest. It is believed he bought in for just under £1 million. His 1983 investment has multiplied 1,100% and he was undoubtedly uncorking a bottle or two when news of the oil find broke back in mid-June.
Other high rollers who made a bundle (at least on paper) when the Irish Sea oil was confirmed included Tony O'Reilly, Jim Stafford, Gerry McGuinness, Don Sheridan md Neil Collins.
One other company made headlines this year with its several financial coups and that was Allied Irish Banks, which took a commanding lead over its main competitor Bank of Ireland. The first aggressive step by the AIB was the takeover of the National Insurance Corporation. Then, in March, it announced the impending takeover of the First Maryland Bancorp, which cost the company $150 million. These two steps have given AIB a spectacular 1983 and leave its directors and shareholders wondering what to do next with the expected £90 million profits it is to make this year.
Another company which is expected to show seven figure returns for 1983 is McInerney Properties, which is being run by brothers Ambrose (chairman) and Dan (vice chairman and managing director). Like many Irish business¬men, the Mcinerney boys realised that to make money theywould have to move out of the stagnant Irish economy, so they took their development company to Britain, the Middle East and Houston, Texas, last year where they reputedly had one of the best years in the company's 34 year history.
Jefferson Smurfit Group, another enterprise run by brothers (Michael and Jeff) had a good year if Michael's purchase of an estimated £3 million Manhattan penthouse is any sort of yardstick. Again, it was the Smurfits' overseas subsidiary, Diamond Packaging of America which provided the profits, after floating off £40 million in loans. The Jefferson Smurfit Group is one company which is said to be grossly underestimated by Ireland's business community.provided the profits, after floating off £40 million in loans. The Jefferson Smurfit Group is one company which is said to be grossly underestimated by Ireland's business community.
There is no Irish success story quite like the tale of Aidan McKenna and Pierce Mee who together founded Memory Computers, and are regarded as Ireland's new breed of millionaires. Once again, this is a case of a firm which was forced to go abroad in order to see the kind of phenomenal success which will most likely leave Memory showing a £1.7 million profit for the current year.
Memory deals in both hardware (with a successful new min-computer) and in software. Memory this year came out with a "Micron" software system which has been accepted by the vast Credit Union system in the US. Shares in Memory, which was introduced on the Unlisted Securities Market last year, are now about to receive a full listing on the London and Dublin Stock Exchange and may even appear on the New York Stock Exchange before the end of 1984. These shares are now selling for about £2.90 and branches of the company are now cropping up across America.
McKenna and Mee officially became millionaires last June when they placed 800,000 shares of Memory Computers (at £2.67 each) on the stock market. These joint managing directors have not abandoned Ireland, however. They acquired Bryan S. Ryan's Olivetti computer division this year which will give them an estimated 1,500 potential customers here.
While most companies have found it necessary to expand into the American and Japanese markets to make money this year, there is one industry which is purely Irish and purely profitable: horse breeding and racing. Irish tax laws are such that the covering fees for mares are tax free, so horse owners who put their stallions out to stud stand to make enormous profits. Even the kidnapping of Shergar does not seem to have significantly damaged the Irish bloodstock industry.
Take, for instance, the case of Tim Rogers at the AirJieStud in Lucan. Sources say he made more than £1 million - absolutely tax free - in stallion fees this year. Northern Ireland horse breeder, Paddy Burns, who now lives in Kilkenny, although not considered to be in the horsebreeding big leagues, sold one yearling this year for £1.5 million. That particular horse was born to one of Burns's own mares which he had covered for a fee of £15,500. For those with trouble at maths, that means that the sale of the yearling brought him 100 times what he paid for the nomination of the mother. And that's not all. After the yearling sold for such a tidy profit, Burns reportedly sold the dam to a group of Arabs. She went for an estima¬ted £1 million. Although it is frequently pointed out that a ,breeder like Burns must weather a number of spartan yearsbefore having the luck he had with his two horses this year,no one can say 1983 was not a good one for Paddy Burns.
Another "dabbler" in the world of horses District Court Judge Frank Roe, made a killing on a single horse, Carling¬ford Castle, in 1983. He bought the horse as a yearling for £7,400. The horse came in second in the Irish Derby and second in the Epsom Derby and second in the England's St Leger Race. Horses of this calibre usually sell for any¬thing in the region of £500,000 to £ 1.5 million.
But that isn't all. Carlingford Castle did not place in all these races for nothing. Prize money at the Epsom Derby alone amounted to £63,000 Sterling. It's a wonder Judge Roe bothers to come to court anymore.
Horse breedings' most successful pair, however, are Vincent O'Brien and Robert Sangster. These men earn so much money in Irish horse breeding that even experts decline to hazard a guess as to the extent of their fortunes. This year was a particularly good one for the pair who saw two great horses, Caerleon (which won the French Derby and the Benson and Hedges Race) and Lomond (which won the English 2,000 Guineas) syndicated and put out to stud. Fees for these horses with these records might be in the neighbourhood of £10,000 a nomination.o give some indication of the amounts of money O'Brien and Sangster have been turning over this year. The twosome bought £18-19 million worth of yearlings in America this year.
Two other Irishmen who will have fond memories of 1983 and horse breeding are Frank Dunne (of Dunnes Stores) and Jim Bolger. Dunne, who owns and trains 16 horses, is the proud owner of Stanerra, a horse which cost him £5000 and earlier this month won £200.000 in the Japan Stakes (the first Irish horse to win a race in Japan). That horse is now valued at well over £] million. Jim Bolger trained two valuable fillies this year, one called Give Thanks, which won the Irish Oaks, Linfield Oaks and the Musidora Stakes, and Flame of Tara which won the Coronation Stakes. Both of those horses are now worth an estimated £200,000.
If you want to make money but cannot afford to buy and train a horse, why not train yourself? Athletes, even amateurs, find themselves availing of all sorts of free perks and payments for endorsements, in addition to receiving some payment which can be placed in trust funds until the athlete has "retired" from amateur athletics. Leading the pack of Irish athletes must be Alex "Hurricane" Higgins who, when united with his wife, seems to be unstoppable at a snooker table. Sources say Higgins's income for 1983 could hover around the half million mark when taking into account prize money, exhibition fees and appearance money. Higgins is not an amateur. Eamonn Coghlan, is an amateur, yet observers place his estimated income (some of it in trust) for 1983 at one half million dollars. Coghlan had a particularly good year as he warmed up for the Olympics. In February he broke the indoor mile with a time of 3:49.78 and in the summer he won the 5,000 metre race in Helsinki the World Cham¬pionships. Coghlan, like so many Irish businessmen found he also had to go to America to make his fortune. He lives in New York.
Soccer star Liam Brady, who left Arsenal three years ago for a professional team in Italy is rumoured to be earning about £100,000 a year. Surprisingly, bicycle racing can be lucrative when you're as good as Sean Kelly who was the points winner in the 1983 Tour de France and earned him the covetted green jersey. Kelly's earnings are a well-kept secret, but it is estimated that he brings in more than £100,000 annually.
Mark Kavanagh who owns Grundy's, Captain America's and Silk's in the Phoenix Park, appears to have had an extremely profitable year, opening a new Captain's in Dun Laoghaire and in successfully operating a string of office blocks around Dublin. Mark is the son of Mont Kavanagh who started developing office blocks years ago with a company called Hardwick Development, long before other developers saw the potential of such development.
As the Irish public becomes more and more fitness-minded, dance studios and fitness clubs have been springing up, especially in the Dublin area. The most successful to date is Pineapple Ireland Ltd, a dance and fitness club founded last winter by co-directors Vonnie Goulding and Meg Myerscough. With just a small personal savings these women approached their bank manager and walked away with a loan enabling them to open a studio in Rathmines. By allowing instructors to work as if they were self-employed, while requiring that all students join their Pineapple Club, these ladies find more than 1,000 students a month passing through their doors and their bank manager is delighted. Although they are not making money on the scale of most Irish tycoons, it is generally agreed they are onto a winner as they appear to have the most organised approach to fitness in the country.
In the world of Dublin property development and invest¬ment one name is mentioned almost immediately when you ask experts who made money in 1983: Finbarr Holland. Little is known about how much he has actually made this year but his takeover of H Williams and Co is seen as just one indication of how well he is doing. He is primarily an apartment developer and this move into supermarket chains is a sign of expansion.
There is a great deal of speculation in the business world about exactly how much money the flamboyant Paddy McGrath made in 1983. Observers note that McGrath spent a good part of the year selling things and therefore must have a great deal of cash - McGrath's fortune was started more than fifty years ago when his family founded the Irish Sweeps. Today he is one of the richest men in Ireland and controls a number of holding companies including Brown¬stone Trust, Crest Holdings, Hospital Trust and Avenue Investments. Last year Avenue Trust sold off its interest in Hibernian Insurance and its portion of Memory Ireland Ltd. In addition McGrath sold the valuable Brownstone Stud, leaving the man holding an estimated £8 million. Finanders are anxiously watching McGrath to see what he will do with all that money in 1984.
Other developers who had a successful 12 months, judging from the fact that they were able to find clients for their expensive office blocks, include brothers Frank and Tommy Woods (who own the Adelphi Centre in Dun Laoghaire), the Spollen Brothers who own a Dawson Street development, and Frank Kenny formerly of Dodder Proper¬ties, who is involved with the Harcourt Street development
For every businessman or woman who presided over a roaring success in 1983, there were dozens - perhaps hundreds – of entrepreneurs who failed. In those cases the business vultures known as liquidators and receivers are installed to sell off the concems while making a good deal of money for themselves. They work on a consultancy basis and demand up to £80 an hour. The biggest names in Irish liquidation are Lawrence Crowley (who handled the in¬famous Patrick Gallagher liquidation) and Coopers and Lybrand.
One of the biggest individuals in liquidation is Kevin Kelly who was recently sent in to PMPA to sort that one out. He is guaranteed to make a neat sum out of the mess at PMPA.
A smaller liquidator, Michael McNulty of Reynolds, Cooper, McCarron, got his first big client one and a half years ago when the Government closed the National Film Studios in Ardmore, Bray. He has been busily working away for the past 18 months, trying to find a buyer for the ill-fated studios while taking home a healthy pay packet each week.
Another group of people who made money precisely because the economy is in a recession are the solicitors and barristers who defend the poor and unemployed in court. Figures for 1983 are not yet available, but sources say that applications for counsel under the Criminal Legal Aid Scheme are expected to reach an all time high in '83. In 1982 a total of 369 solicitors and 142 barristers were paid rees under the free legal aid scheme. The biggest winner in that plan was undoubtedly Dublin solicitor Pat McCartan, who made £44,310.76 under tlle programme. Running a not-very close second place was Dublin solicitor Michael Staines who earned £22,221.46. Barristers who earn a considerable amount through legal aid are Seamus Sorohan, who made £19,188.62 in 1982 and Gregory Murphy who made £18,565.66 in 1982. All of these lawyers are expected to increase their salaries when the 1983 figures are tallied.
It should be pointed out, however, that although these attorneys made a great deal of money through the legal aid scheme, they could have made much more had they con¬fined their practices to wealthy private clients. The very fact that there is a burgeoning need for free legal aid is indicative of the growing social and criminal problems associated with unemployment and poverty.
Most of those who made sizeable amounts of money in 1983 were not what would technically be called working people. Most made money in businesses established by their fathers, they struck oil or happened to own a horse which ran fast. The exception to that is John McGreal a garage foreman from Walking stown. McGreal won the Sweeps on October 14, making himself, his wife and six month old son £125,000 richer. Unlike most potential Sweeps winners, McGreal (who doesn't even like horses) was not cooperating with any bookies, so he got to keep the entire sum himself. Speculating immediately after his stroke of good fortune, McGreal said he had no plans to leave his job as foreman of Smith's Garage in Dolphins Barn but that he would probably buy a new car and take a short holiday with his family.
A great many people in Ireland found themselves receiving automatic pay boosts this year because they were paid regularly in American Dollars, Sterling or other currencies which are strong against the Punt.
The American Ambassador Peter Dailey for instance, received a pay hike of 22.6% without even asking for it as the dollar climbed to record levels against Irish currency. Assuming Dailey earned the minimum salary for American ambassadors (which he didn't - he earned considerably more, but no one seems to know how much) he would have received $ 60,000 annually. Divided by 52 weeks his weekIy pay cheque would come to $ 1,154.
During the first week in January of 1983 that translated into £826.35. During the second week of December, when the dollar reached its strongest point ever against the Punt, Dailey's imaginery pay packet had swelled to £1,018.61. Every other employee in the American Embassy is in a similar situation, as are those at the British post, but to a lesser degree. In the world of entertainment there were just two really spectacular success stories: the international fame of Ireland rock band U2 and Clannad. Both suddenly catapulted to the top of the rock scene in America and Britain. U2's album sold 800,000 copies in the US and Clannad recorded the soundtrack for the ITV series Robin Hood. Christy Moore, out on his own for the duration of the year, is reputed to be enjoying phenomenal success and insiders say he demands more than £1,000 per night. (A survey of the papers shows that Moore is playing around the country three or four nights a week so figure it out for yourself). In fairness, Moore is always anxious to donate his talents for worthy causes and has helped numerous organisations raise funds. On the other side of the coin Belfast promoter Jim Aiken, who brought Simon and Garfunkel to Dublin this year, is talking about giving up the promotion game until the Punt gains against the dollar. He did not have a particularly good year. When you are talking about making money in 1983, there is no point in omitting the crowd who literally did just that, the counterfeiters who manufactured an estimated £1.5 million in Irish fivers. Gardai believe this was the work of paramilitaries and not businessmen who had a bad year.