Each year we invest in SME companies (small and medium-sized enterprises) with high growth potential under the Employment and Investment Scheme (EIIS). Through the scheme, we offer clients company-specific investment opportunities which allow investors to obtain income tax relief on that investment. In recent years we have been particularly active in the drinks industry which has proved attractive for our investors.
With the number of microbreweries on the rise in Ireland and a positive trajectory in demand for craft beer, we worked with Carlow Craft Brewery Limited, trading as O’Hara’s Craft Beer and raised €2.5m in EIIS capital for the company. The funds were used to expand the company’s brewing and packaging facilities, located in Bagenalstown, County Carlow and for working capital purposes. The expansion of the brewery will add capacity and operating efficiencies as well as creating new employment.
In late 2017, O’Hara’s opened Urban Brewing, a brewery, bar and restaurant in the CHQ Building, at the IFSC in Dublin 1. The venue is laid out over in excess of 10,000 sq. ft. The ground floor bar area (Taps & Tapas) has a large heated and covered terrace (The Hop Garden) opening onto Georges Dock waterfront. It is a vibrant space to enjoy a large selection of craft beers, wines, cocktails and spirits, along with an array of tapas style dishes. The Brewhouse, located on a mezzanine level overlooking the bar, brews an exciting range of exclusive beers, using O’Hara’s pioneering craft brewing expertise. Urban Brewing continues downstairs where the 250-seater restaurant, the Vault Bar and The Brewmasters Tasting Table are located, within the 19th century bonded warehouse. The unique vista of the vaulted alcoves is the perfect setting for a memorable experience, be it over a casual lunch, a more substantial dinner over wine or an event tailored to any occasion. Since it opened trading has been very strong, exceeding all expectations, with many more experiences being planned for 2018.
Irish whiskey is now one of the fastest growing brown spirits in the world, with compound annual growth rates at circa 10% in recent years. In 2014, Cantor Fitzgerald clients invested €2.5m in Great Northern Distillery Limited. The funds were used by John Teeling and his team to convert the former Harp Brewery in Dundalk, which was acquired from Diageo in 2014, into a large scale malt and grain distillery. Following the successful completion and fit out of the distillery, GND commenced distillation in July 2015. Cantor subsequently raised further EIIS funding for GND in 2015 and 2016 to finance the maturation of new fill stock being generated by the new distillery. The first of its two distilleries to be commissioned was the 30-million-bottle-a-year capacity, three-column still grain whiskey distillery. This was followed by the three pot-still malt distillery, capable of distilling 12 million bottles of single malt and pot still whiskey per year.
The company has enjoyed tremendous success and growth, delivering profitability each year since the distillery was commissioned and is now one of the largest producers of grain whiskey in the country. In February of this year the company bought back the 2014 EIIS shares. The share buyback delivered a 12% uplift for Cantor Fitzgerald clients, in addition to the tax relief obtained over the 3-year period which resulted in an overall Internal Rate of Return of 15%.
Cantor Fitzgerald has raised in excess of €48m in EIIS funding since 2011. EIIS is one of the few remaining sources of income tax relief which can be obtained from PAYE earnings, rental income from property held in a personal capacity and ARF distribution income. We will be announcing EIIS investment opportunities across a number of sectors in late 2018.
To speak with a Portfolio Manager or Account Executive today, please phone the Cantor Fitzgerald dealing desk on 01 633 3633.
Click here to download our March Investment Journal.