Mail order businessmen become multi-millionaires following sale

TWO businessmen who ran a major mail order business from Ireland serving the US market have become multi-millionaires.

Waterford Wedgwood in a strategic move, which gives them a new sales channel in the US, bought the mail order businesses off Fairway Investments for €22.04 million this week.

Cash's and Shannon catalogue mail order businesses remained below the radar screens in Ireland, but manages to sell €27 million worth of gifts a year from their warehouse based in Togher in Cork to the US 50% of it is Waterford Glass.

The deal puts the guts of the €22.04 million paid by Waterford Wedgwood into the pockets of the two main shareholders in Fairway, who retain all the company's other assets having sold the mail order businesses. Fairway was founded in April of 1989 to purchase the Cash's mail order business from Switzers, which ironically was once part of the Waterford Wedgwood stable.

Dermot O'Mahony, aged 61, from Carrignadoura, Ballingeary, Co Cork, who holds 77% of the of the company. Mr O'Mahony is also a director of Emerald Mail Order Ltd, Emerald Post Teo, Emerald Giftware Ltd, Atlantic Scaffolding Services Ltd, Atlantic Bridge Corporation Ltd, Optico Equipment Ltd and The £1 Shop Ltd.

Michael O'Driscoll, aged 43, Dunard House, Ballybrack, Carrignavar, Co Cork holds 23% of the company.

Mr O'Driscoll is to remain with Cash's and Shannon as chief executive following the buyout by Waterford. He is also a director of the Educational Company Limited.

The Educational Company is 99.98% owned by Fairway and received 413,000 in royalty payments from Fairway for use of a patented mail order patented process. Tax is not normally paid on patented royalty payments.

The last company accounts filed by Fairway with the Companies Registration Office and compiled by Horgan Barrett & Co shows the company to be in good financial order.

The accounts show Fairway had bank loans of just 1.74 million, but had net funds of 2.15m as of April 30, 2001.

Property and equity investments held by the company were not sold to Waterford Wedgwood.

Fairway held listed equity investments, which the end of April 2001 had a market value of 1.68 million. Fairway Investments held 3.5m worth of investment property on April 30 2001.

Security on bank borrowings indicate these investment properties were on Grand Parade and the South Mall in Cork, a house in Kilkenny and five apartments in Waterford.

In the year ending April 30, 2001 the company paid a dividend of 129,000 to shareholders.

The directors remuneration and other emoluments for the year ended April 2001 were 566,000 down from 1.05 million in 2000.

The company is also appealing the disallowment by the Revenue Commissions of an investment in Jack Doyle Productions Limited under the film investment section 35 of the Finance Act 1987.

If successful the company will recoup 92,500 from the revenue.

But the good news for Fairways is tempered by the fact that it has a foreign exchange contract to sell $33.25 million dollars between May 2001 and March of 2004. Depending on the hedging operation in place this could be bad news or good news for the company as the euro breaks parity with the dollar.