'Kedco's finances were in dire straits until FBD arrived on the scene'

ENTREPRENEURS
shoulders of Donal Buckley, a native of
Castletownshend. He po<strong>in</strong>ts out that
regulatory requirements to reduce
landfill waste and boost green energy
will <strong>in</strong>crease demand for the type of
small power plants be<strong>in</strong>g promoted by
Kedco Power.
Buckley’s ma<strong>in</strong> sales focus is on
the UK, where there are better
<strong>in</strong>centives than <strong>in</strong> Ireland to produce
electricity from waste. Buckley believes
Kedco enjoys “early mover advantage”
<strong>in</strong> the UK. While there is no shortage of
technology providers try<strong>in</strong>g to sell
green plants to waste operators,
companies such as Kedco that want to
partner with them and operate on a
jo<strong>in</strong>t venture basis are th<strong>in</strong> on the
ground, he said.
Such is Kedco’s vision. But br<strong>in</strong>g<strong>in</strong>g it
to life will require capital fund<strong>in</strong>g. Each
plant costs <strong>in</strong> the region of €8m to
build, and <strong>in</strong> a jo<strong>in</strong>t venture Kedco
would have to source debt f<strong>in</strong>ance and
pony up some cash itself. That’s money
that Kedco doesn’t have, which is where
the AIM list<strong>in</strong>g comes <strong>in</strong>.
Accord<strong>in</strong>g to Kealan Doyle of Lewis
Charles, the stockbroker which
<strong>in</strong>troduced Kedco to AIM, there is
considerable <strong>in</strong>vestor appetite for
renewable energy projects given the
long-term momentum beh<strong>in</strong>d the
sector. He said: “With Kedco, you’re
talk<strong>in</strong>g about a bus<strong>in</strong>ess that can grow
<strong>in</strong>credibly quickly <strong>in</strong> the next few years.
So I do th<strong>in</strong>k there will be money
available for someth<strong>in</strong>g like that,
barr<strong>in</strong>g some extreme event,” he said.
Ian Hunter, equity analyst <strong>in</strong>
renewable energy at Goodbody
Stockbrokers, agreed that there are
specialist <strong>in</strong>vestors who take a longterm
view of the renewable energy
sector and are will<strong>in</strong>g to <strong>in</strong>vest <strong>in</strong> green
energy projects. Accord<strong>in</strong>g to Hunter:
“You’re look<strong>in</strong>g at long lead-<strong>in</strong> times
before revenues start to accrue.
Ord<strong>in</strong>ary <strong>in</strong>vestors wouldn’t be <strong>in</strong>cl<strong>in</strong>ed
to <strong>in</strong>vest <strong>in</strong> that type of company,
especially at the moment. But there are
specialist funds that would take the view
that alternative energy is on a growth
curve.”
Buckley, who has an 8% stake <strong>in</strong>
Kedco and is on a salary of €200,000,
Kedco Pr<strong>in</strong>cipals
● William K<strong>in</strong>gston, 37, nonexecutive
chairman. One of the four
orig<strong>in</strong>al founders. His Cork dairy
farm is one of the largest <strong>in</strong> Ireland.
Owns 8% of Kedco.
● Diarmuid Lynch, 43, non-executive
<strong>dire</strong>ctor. Co-founder who also has a
big dairy farm <strong>in</strong> Cork. Owns 10%.
● Donal Buckley, 33, chief executive.
He was also <strong>in</strong> at the start <strong>in</strong> March
2005. Buckley was a divisional
manager with SWS Farm Services, a
w<strong>in</strong>d energy firm. Graduated from
UCD 1997 with a degree <strong>in</strong>
Agricultural Science. Owns 8%.
● Gerry Madden, 49, f<strong>in</strong>ance
<strong>dire</strong>ctor. Chartered accountant who
jo<strong>in</strong>ed Kedco <strong>in</strong> May 2007.
● Edward Barrett, 41, non-executive
<strong>dire</strong>ctor. Co-founder of Kedco. His
firm International Livestock Genetics
distributes bov<strong>in</strong>e genetics and
Barrett is also a <strong>dire</strong>ctor of Plat<strong>in</strong>um
Asset Management. Owns 6%.
● Donal O’Sullivan, 64, nonexecutive
<strong>dire</strong>ctor. Jo<strong>in</strong>ed the board
<strong>in</strong> August 2007. He was the
chairman of Esso Ireland <strong>until</strong> 2001
and then manag<strong>in</strong>g <strong>dire</strong>ctor of
Hoyer.
● Alf Smiddy, 46, non-executive
<strong>dire</strong>ctor. Jo<strong>in</strong>ed the board <strong>in</strong> May
2007. Smiddy was <strong>in</strong> charge of Cork
brewer Beamish & Crawford for 20
years <strong>until</strong> its recent takeover by
He<strong>in</strong>eken.
observed: “People always ask me if
green is go<strong>in</strong>g to be like the dot com
bubble - is it go<strong>in</strong>g to burst The
difference is that with green there is
someth<strong>in</strong>g very tangible, renewable
energy replac<strong>in</strong>g oil imports. This is
someth<strong>in</strong>g that even the average punter
can understand.”
The green energy sector is young,
and so is Buckley, but he’s not fazed by
his relative youth. “It’s someth<strong>in</strong>g I
don’t th<strong>in</strong>k about it too much to be
honest,” he said. “The only way to ga<strong>in</strong>
credibility is to deliver. The one th<strong>in</strong>g
you can’t be when you’re young is
cocky, because if you’re young and
arrogant you’ll get pulled to the ground
very fast.”
Kedco’s other executive <strong>dire</strong>ctor is
longer <strong>in</strong> the tooth. F<strong>in</strong>ance <strong>dire</strong>ctor
Gerry Madden, 49, jo<strong>in</strong>ed Kedco last
year on a salary of €250,000
per annum. Madden previously
operated his own consultancy practice
advis<strong>in</strong>g companies on mergers and
acquisitions, and he is a non-executive
<strong>dire</strong>ctor of Ecom Interaction Services, a
‘There’s a lot of
legwork and legal
agreement
<strong>in</strong>volved’
subsidiary of Newcourt plc.
Kedco’s admission price on AIM was
17.5 cents per share, giv<strong>in</strong>g the
company a notional value of €35m. The
list<strong>in</strong>g process began last June and
Kedco put together a heavy-weight
professional services team to make the
list<strong>in</strong>g happen: Arthur Cox <strong>in</strong> Dubl<strong>in</strong> to
handle the legal side, Deloitte <strong>in</strong> Cork
for the full f<strong>in</strong>ancial audit and then
Deloitte Corporate F<strong>in</strong>ance <strong>in</strong> London
as its nom<strong>in</strong>ated adviser.
Despite the punish<strong>in</strong>g due diligence,
Buckley feels that Kedco has benefited
greatly from the process. He said:
“List<strong>in</strong>g is very good for a bus<strong>in</strong>ess. You
have to go through everyth<strong>in</strong>g <strong>in</strong> great
detail. You’re asked the same th<strong>in</strong>g five
different times by five different people.
I’m glad it’s f<strong>in</strong>ished but it was well
worth do<strong>in</strong>g.” However all that hard
work, and the large expense <strong>in</strong>volved,
will only be worthwhile if Buckley,
Madden and chairman Bill K<strong>in</strong>gston can
persuade <strong>in</strong>stitutions that Kedco has the
ability to deliver on its ambitious
bus<strong>in</strong>ess model.
38 Bus<strong>in</strong>ess Plus January 2009