Forestry group Coillte wants to shift away from relying on one-off land sales for cash

STATE-OWNED FORESTRY group Coillte plans to rejig its business model over the next five years so it doesn’t have to depend as much on one-off land sales to generate cash.

Chief executive Fergal Leamy said in the company’s annual report today that the semi-state plans to move away from a business model that relies on large property transactions to one with “recurring income streams”.

Mark Foley, head of Coillte’s ‘land solutions’ division, said site transactions will “continue to play an important role” in terms of the company’s revenue stream.

However, he added that the company will focus more on “creating development opportunities in new sectors” such as wind energy. The group pumped €400 million into wind farm projects in 2016.

The state-backed firm completed 65 land sales in 2016, including a deal with UK-based holiday resort company Center Parcs for its €230 million holiday resort in County Longford.

Coillte CEO Fergal Leamy

Another high-profile sale was completed through IDA Ireland to facilitate Apple’s data centre build in Galway.

The tech colossus announced plans for an €850 million data centre campus in Athenry in 2015. However, the project has been bogged down by a series of objections made by three people.

There is widespread support for the build in the local area. In November 2016, 2,000 people marched in Athenry in support of Apple’s plan. Work is due to begin on the site this year but has been delayed by a Commercial Court appeal.

Record earnings

Coillte – which owns and manages 7% of all of Ireland’s land – reported an operating profit of just over €64 million for the financial year ended 31 December 2016, up nearly 7% on the previous 12-month period.

It generated sales of more than €287 million during the year, up from €282 million in 2015. The board approved a dividend of €6.2 million was to paid its shareholder, the Irish government.

Its workforce shrunk slightly during the year. It had 862 people on its books in 2016, down from 897 the year before.

Collite said despite economic uncertainties”, it is confident that it is well-positioned to continue to grow in “a more challenging operating environment”.

“Global demand for high-quality wood fibre, sustainable low-carbon building products and renewable energy is increasing and this creates a number of growth opportunities for our business,” chairman John Moloney said in the annual report.

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