Irish Estates - A Niall McFadden play

The latest deal brokered by Dublin Wizz Kid Niall McFadden.

If it's solid management you want then this is your share.

( I will declutter the heading when people have had time to read the vitals ).



Admission to AIM and IEX

RNS Number:0138S
Irish Estates plc
30 September 2005

Irish Estates Plc


Admission to trading on AIM and IEX

Irish Estates Plc ('Irish Estates' or the 'Company'), the Irish property
management and facilities management group announces the commencement today of
dealings in its ordinary shares on the AIM market of the London Stock Exchange
('AIM') and the IEX market of Irish Stock Exchange ('IEX') ('Admission').



Niall McFadden, Chairman of Irish Estates said;

"The acquisition and merger of Ireland's largest Property Management and
Facilities Management companies has positioned us to become the market leader in
business support services in Ireland. The Admission is the next step in our
development and we look forward to growing the company and creating further
value for our shareholders"

Martin McMahon, a director of Irish Estates and Head of the Group's Facilities
Management arm, said;

"Irish Estates plc is Ireland's largest Property and Facilities Management
company with a highly skilled and committed workforce. Between them they have
generated year on year growth of 25% over the past five years and I believe this
established track record will underpin our future success"

For Further Information Contact:

Irish Estates plc

+353 1 7044100

Niall McFadden, Chairman

Declan Cassidy, Company Secretary



Davy Corporate Finance

+353 1 679 6363

Des Carville, Director

Brian Garrahy, Executive



Q4 Public Relations

+353 1 475 1444

Gerry O'Sullivan



Information on Irish Estates

Irish Estates provides a wide range of support services to property owners and
occupiers, primarily in Ireland. The Company was incorporated in December 2004
to acquire Irish Estates Management ('IEM') and Vector Workplace and Facility
Management Limited ('Vector') which are among the leading property management
and facilities management companies respectively in Ireland. The transaction
created a group with market leading positions in both property management and
facilities management in Ireland thereby facilitating a broader service offering
to a wider range of clients.



Background

IEM

IEM was incorporated in 1949 as a subsidiary of Irish Life Assurance Company
Limited now incorporated under the name Irish Life & Permanent plc ("ILP"). Over
almost 60 years, IEM has evolved into one of Ireland's leading property and
facilities management companies with a presence in Dublin, Cork, Belfast, Galway
and London, employing 114 full time staff (as at 31 December 2004). IEM's
customer base is broad and includes quoted companies, government departments and
agencies, semi-state companies, private investors and commercial investors in
Ireland. The Directors estimate that the current size of the portfolio
maintained on behalf of its clients is in excess of 21 million square feet. This
portfolio has an approximate value of Euro 11bn based on an approximate average
value of Euro 535 per square foot. In the year ended 31 December 2004, IEM
collected rental income on behalf of clients amounting to approximately Euro120
million and managed service charges amounting to approximately Euro 50 million.

IEM currently operates two businesses, namely property management and
professional services. In the property management business IEM provides services
to its clients including rent collection, lease management, service charge
management and budgeting. IEM provides an extensive range of professional
services including energy management, space planning, benchmarking, project
management and building start-up and commissioning services.




Vector

Vector was incorporated in 1999 to facilitate a management buyout of Hewlett
Packard's (''HP'') facilities management business by Martin McMahon who was at
that time HP's facilities engineering manager. This followed a decision by HP to
outsource that function. Focusing on a blue-chip client base, since then Vector
has grown both organically and by acquisition, with the purchase of Vector
Environmental Services Limited and the business of Spokesoft Components Limited
("Spokesoft"). Having grown from a single client operation, based in Dublin, the
Vector team has expanded the business to a broad based facilities services
provider, with a wide range of high profile multi-national customers based
throughout both the Republic of Ireland and Northern Ireland. With a substantial
presence in the technology, pharmaceutical and public sectors, this growth has
come about from customers new to the concept of facilities management as well as
the conversion of customers of other FM operators in the market.


Vector offers a full range of outsourced facilities management services to
companies who decide to outsource their non-core support services. These
services fall into three main categories - facilities services, technical &
engineering services and environmental, health & safety. In the year ended 31
December 2004, Vector and Vector NI had a combined average of 64 employees.


Following the acquisition of Vector Environmental Services Limited, ("VES"), in
Northern Ireland, the company moved into the provision of Energy and
Environmental Services, a market which was increasing rapidly due to legislative
changes and a new emphasis on corporate citizenship.


Spokesoft is a software business based in Cork which specialises in the
provision of facilities management and related software systems. This is an
on-line, internet workflow and help desk system, designed as a set of components
which allows for rapid and low cost customisation of the product to enable the
systems be tailored to the needs of the individual customers.


This combination enables Vector to provide a full range of facilities and
infrastructure services to a growing international and public sector, matching
the demand for high quality services delivered in an integrated manner by a
single supplier.

Business Strategy

The Group's principal strategic objective is to become a single point of contact
for its customer base in the supply of support services. This strategy
necessitates an investment in people and infrastructure which, together with
improved economies of scale due to the Group's size, should, in the view of the
Directors, ensure that the Group delivers a quality service to both new and
existing clients. Initiatives and teams are in place to maximise cross-selling
opportunities and win new business.


In the medium term, the Group intends to expand, both organically and through
acquisitions, in related service areas. It is anticipated that such acquisitions
will be financed through a combination of debt, equity (issued as consideration
or issued to raise additional cash resources) and internal cash resources as
appropriate.



Information on the Business

Irish Estates provides a wide range of support services to owners and occupiers
of buildings primarily in Ireland. The service offering is comprised of three
distinct components, namely property management, facilities management and
professional services.



Property Management

Property management is the provision of services to landlords/property owners
who elect not to have any day-to-day involvement with their properties but are
conscious of ensuring that the asset value of their property is maintained.
Services include, inter alia, rent collection, lease management, compliance with
lease agreements, regular property inspections and service charge management.
The Group's property management business is typically conducted as a fee-based
arrangement whereby the Group, as agent, charges a fee for support services
provided.


The Irish property management market has increased significantly over recent
years due to the growth in the Irish economy. This has led to a higher number of
more sophisticated buildings being constructed which require a greater level of
day-to-day management.


The Company's objective is to enter into long-term arrangements with its clients
to provide an efficient and effective property management service.



Facilities Management

Facilities management is the provision of a broad range of services to occupiers
of a building. Services include, inter alia, general repairs, maintenance of air
conditioning and heating systems, maintenance of production lines, mail room
facilities, reception and telephone facilities, energy management, health &
safety consultation, environmental consultancy, security and cleaning. The
Group's facilities management business is typically conducted on a contracted
fixed fee basis where, in addition to the provision of certain services from
internal resources, the Group manage and co-ordinate a range of sub-contractors.


In Ireland, facilities management is a fragmented market with no single dominant
service provider and estimates vary as to the size and composition of the Irish
market. The Directors estimate that the FM market in which Irish Estates
operates is currently worth in excess of Euro 220 million per annum and that the
potential market, assuming penetration rates similar to those in the UK, could
be worth as much as Euro 500 million. On that basis, the Directors' estimate that
Irish Estates has a market share in excess of 9%. In addition, the Directors
believe that penetration rates in Ireland are lower than the penetration rates
in the UK which they estimate at 35%.

The Group provides reactive and planned maintenance to the Group's property and
facilities management client base. The Group has a computerised helpdesk, which
is available 24 hours a day, 365 days a year. The Group's service team is ISO
2002 accredited and operates to strict quality control and safety standards.



Professional Services

The Group provides a wide range of property related consultancy services to both
property owners and occupiers. Professional property services has become a more
complex area which requires an in-depth understanding of landlord/tenant
legislation, buildings surveys, lease renewals, energy management, schedules of
dilapidation, and environmental (waste management) legislation.


Through the provision of professional services to tenants, the Group assists
them in ensuring that their rental costs are benchmarked in line with industry
norms and in negotiating the most favourable lease terms. This is achieved
through negotiating rent reviews, advising on how to minimise costs on the
expiration of existing leases, how to negotiate the best future arrangements,
advising on how to structure sub-lettings and how best to apply for ''property
change of use'' and project management of internal building projects.

Professional services provided to buildings owners' can help them to maintain or
increase the value of their asset. This is achieved by advising on rent reviews
with a view to maximising returns on the property asset, handling lease
assignments, advising on subletting arrangements and managing building projects
such as refurbishment of common areas and building upgrades.


The Group is currently in the process of establishing an additional professional
service offering relating to the acquisition of property which the Directors'
believe will complement the existing suite of property related professional
services offered.



Historical Financial Information


In the financial year ended 31 December 2004, Vector and IEM generated a
combined operating profit before operating exceptional items of approximately Euro
3.83 million. The table below shows a summary of the combined profit and loss
account of the two entities for the last three years;

Year ended 31 December Year ended 31 December Year ended 31 December
2002 2003 2004
Euro'm Euro'm Euro'm
Turnover 27.9 28.7 27.1
EBITDA 3.3 3.3 3.8
Profit after Tax 3.1 3.0 1.6




During the year ended 31 December 2004 the Combined Entity incurred operating
exceptional charges relating to asset write-downs, account reconciliation's,
employee expenses and other associated costs amounting to Euro 1.96m.



Reasons for Admission to IEX and AIM

The Directors believe that the benefits associated with Admission include:


i. Corporate Profile

The Directors believe that the Company will benefit from the perceived
status and stature of being a publicly traded entity, which will help
enhance its status with potential customers and suppliers.


ii. Access to capital markets

The Directors believe that capital of publicly traded companies'
carries a lower cost and is more freely available than that of private
companies not quoted on an exchange or trading facility.


iii. Incentivising key staff

The Directors believe that the acquisition and retention of key staff,
which is fundamental to the Company's success will be enhanced through,
where appropriate, service contracts, bonus entitlements and a share option
scheme.


iv. Rationale for Admission to IEX


The Directors have decided that, in addition to an AIM listing, it
would be appropriate to seek admission to the Irish Stock Exchange's IEX
market. It is expected that liquidity in Irish Estates' shares will be
enhanced by the provision of a Euro denominated quote and trading facility.
The incremental costs are not expected to be material as the regulatory
regime and continuing obligations of IEX are similar to those of AIM.




Current Trading & Prospects

For the six months ended 30 June 2005, the Group's revenue amounted to Euro 11.96m
which generated an operating profit of Euro 1.22m after deducting goodwill
amortisation of Euro 0.96m. The Group has won a number of tenders during this
period which are expected to make a contribution to financial performance in the
second half of the year. The Directors expect that the trend in increased
outsourcing of non-core business activities will increase in Ireland as
companies focus on their main business activities. Accordingly the Directors
believe that the Group is well positioned for 2005.



Restrictions on Disposals of Shares

Pursuant to lock-in agreements, certain Shareholders in the Company have
undertaken, subject to certain exceptions, not to sell, transfer or otherwise
dispose of any Ordinary Shares or any interest in Ordinary Shares which they
hold immediately following Admission or which they subsequently acquire.
Shareholders representing 30.94% of the Ordinary Shares in issue at the date of
this document are subject to such lock-in arrangements for a period of 12 months
from the date of Admission. Shareholders representing a further 11.38% of the
Ordinary Shares in issue at the date of Admission are subject to such lock-in
arrangements until and including 31 March 2007. In certain cases this
undertaking can be waived with the agreement of Davy and the Company.