Lessons from the month of August

From brat summer to Chris Martin busking in Dún Laoghaire, the month of August has brought in several big news stories. Here’s the best of the bunch.

1. Finally, a drop in inflation.

Late in the month, the news recorded that inflation in the Irish economy had fallen to a fresh low of just 1.1%. This, according to the latest flash estimate for the harmonised index of consumer prices (HICP), was driven by falling energy prices internationally. According to the Irish Times, the 1.1% annual rate recorded for August compares with a rate of 1.5% in July and 2.6% for the euro area as a whole. (The last time the HICP was this low was April 2021.)

The Central Statistics Office said energy prices had fallen by a further 0.6% in August and were down by 9.5% over the previous 12 months. As for those of you who don’t believe this by way of your food shopping bill, you’re onto something; food prices were estimated to have risen by 0.1% in the last month and by 2% in the last 12 months.

2. Intel announces plans to lay off 15% of its workforce to reduce operating costs.

Intel announced in early August it would be laying off some 15% of its workforce to “resize and refocus” following what CEO Pat Gelsinger described as a “disappointing” financial performance this year. Reuters reports that Gelsinger and leading Intel executives will present cost-cutting plans to the board in a meeting scheduled to take place in mid-September. The plan will allegedly include suggestions on how to cut costs, including selling businesses – like Altera, its programmable logic device manufacturing unit. Intel’s factory expansions could also suffer, with Reuters reporting that its $32 billion fab project in Germany could be delayed or shelved entirely. Not included, however, are plans to sell off its foundry unit.

Intel’s foundry business manufactures chips for external partners. It reported a $7 billion operating loss last year.

3. Multiple restaurant closures.

Earlier this month, in the space of just one week, three popular and long-standing Dublin restaurants closed their doors; Rustic Stone; Brasserie Sixty6 and Ukiyo Bar. On the closures, including one of his own, restauranteur and Michelin star chef Dylan McGrath said running a restaurant in the city centre was “simply not sustainable”, while the owners of Ukiyo warned the margins were “so meagre there is no future for us and so many more of our fellow businesses”.

Some 577 restaurants across Ireland shut down between September 2023 and July 2024, meaning an average of two closures each day. Why? Growing food prices, a cost of living crisis, and, largely, the current VAT rate of 13.5%.

If nothing changes, more will shut. That is a promise. But with the Budget coming around the corner, will politicians listen and remove barriers for those in food and drink? Only time will tell.

4. M&As.

Speaking of food… Chocolate giant Mars is to buy Pringles in a £28bn (€32.75bn) mega-deal that brings two of the world’s biggest food companies together. The US conglomerate behind snacks such as Snickers and Skittles will pay £64.96 a share for Kellanova (a multinational formed when Kellogs was split into three last year; brands include Pringles, Carrs and Special K) in an all-cash offer deemed the largest-ever acquisition in the packaged food industry and the biggest takeover of 2024 so far.

Closer to home, GoChallenge, an employee engagement platform focused on promoting health and wellness, has announced significant investment from former Manchester United and Republic of Ireland star John O’Shea. The Waterford start-up offers a range of interactive challenges and activities designed to motivate employees to stay healthy and connected. O’Shea reportedly shares their vision to transform workplace culture by encouraging physical activity and social interaction among employees.

Xenon Building Technology has also announced its acquisition of Park 100 Fire and Security following its recent management buyout. The Leinster-based safety and security technologies firm has completed the takeover in order to “enhance safety, reliability and innovation in building technology solutions”. Xenon said the acquisition would allow the company to offer a more comprehensive range of products and services to meet the evolving needs of its clients. Our corporate finance team led by Noel Winters had the privilege of advising on the Financial Due Diligence (FDD) and Tax Due Diligence (TDD) for the successful management of the transaction. We wish Dermot Ryan and Justin Owens well in their new chapter!

This all happened despite VC funding for Irish businesses falling 22% year-on-year for the first half of 2024, according to the Irish Venture Capital Association (IVCA). Irish SMEs received €752.6m in venture capital funding in H1, down some €212.3m from approximately €964.9m during the same period in 2023. However, the €494m in VC funding received by Irish businesses during the second quarter was the second-highest amount on record and up 7% on the same period last year.

5. Pharmacies can now prescribe medication.

In news that will delight anyone who has ever had to attend an overcrowded GP, Irish pharmacists are now set to gain new prescribing roles following an expert report recommending they should prescribe for a range of common conditions. Earlier in the month, the Minister for Health, Stephen Donnelly, published the report of the Expert Taskforce to Support the Expansion of the Role of Pharmacy,’ which included a list setting out how pharmacists working in a community pharmacy will provide treatment to patients for an initial list of eight conditions. The list includes allergic rhinitis, cold sores, conjunctivitis, impetigo, oral thrush, shingles, uncomplicated UTO / cystitis, and vulvovaginal thrush – he said the range of conditions can be extended over time as the service evolves.

The Irish Pharmacy Union (IPU) said it welcomed the recommendations of the Expert Taskforce, stating that these recommendations when implemented could have a transformative effect on community healthcare.

6. The greatest show on Earth.

The Olympics were here! And boy what a show they were. A record one for Team Ireland we’ve been told, in terms of participants and medals. A similar record is currently taking place for the Paralympic Team Ireland, too – a group of people wowing us with our skills daily as we eat mediocre sandwiches between meetings.

In local news, one of our most exciting athletes has recently popped up in Waterford. A mural of Irish Olympian Rhasidat Adeleke was recently unveiled in Waterford City, a large-scale piece on Jenkins Lane created by muralist JEKS, who is usually based in North Carolina. Completed during Waterford Walls, Ireland’s largest international street art festival – and an event close to our hearts at Fitzgerald Power.

In summary:

If nothing else, Ireland has proven once again that A) Leaving Cert weather is real and B) we absolutely love the bit of sport. Team Ireland gave the country a real boost, one usually reserved for celebrities who tell us that Ireland is their favourite venue to play – even when we know they say that to everyone.

Speaking of, did you get an Oasis ticket, or did you too join the angry mob? Ticketmaster came under fire this month, as hundreds of thousands of people spent their Saturday mornings logged into the site to find tickets for less than €500. Sadly, few were found. It was the first time people have threatened to sue the ticket conglomerate since…. last year. Or the year before.

Despite missing out, we do have some things to look forward to: the Budget is a month out, which is basically like Christmas for accountants; our Paralympians are looking more impressive than ever and finally, Ireland has an over-35s nightclub – one that closes its doors at 10pm. Has a night out ever felt more approachable? In the meantime, may you feel a certain type of competency that whoever signed off on the  €335k Leinster House bike shed clearly doesn’t have. Worse comes to worst, at least you’re not being that ridiculous. Or so we hope.

See you next month!

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