12 Jan 2018 | 02.31 pm
Interview: Paddy Redmond, Amber Springs Hotel
Dynamic Wexford brothers Paddy and Tommy Redmond now have a portfolio spanning houses, hotels and offices
12 Jan 2018 | 02.31 pm
Paddy Redmond has a knack for understatement. “We have a good work ethic,” is all he says of himself and his brother Tommy when accounting for their entrepreneurial endeavours. The dynamic Wexford brothers have built something of a south-east business empire out of their work enthusiasm, spanning construction, hotels and agriculture.
The siblings left education early to join the working world. Starting out as blocklayers, Paddy (55) and Tommy (53) went on to form their own small business, building one-off houses in the Wexford area. The Redmonds are currently building three different housing developments in Wexford and Wicklow, while another 350 unit scheme is due to start in the coming months.
The brothers also built and run two four-star hotels in Gorey, and recently opened a business campus in the town, hoping to draw tenants down from Dublin. As if that wasn’t enough, the siblings rear around 1,000 head of Angus cattle every year on a 300-acre farm. Across the various activities, hundreds of people are employed. “We just like our staff to put the work in that we ourselves would do,” says Paddy, without a hint of irony.
Having grown up on a family farm in Craanfort, the Redmond boys had plenty of practice at the agricultural life. However, it was construction that attracted them in terms of career choice. “We went straight into the industry from school,” Paddy Redmond recalls. “I worked for a local builder in Gorey and my brother went to England to work on building sites, later moving to Australia.”
When Tommy returned to Ireland, Paddy partnered with him and they began building one-off houses around Gorey in the early 1990s. The business scaled up quickly, expanding into bigger housing and commercial construction projects. By 2000, the Redmonds were booking net profits north of €2m.
The brothers branched into hotels in 2001, building the Ashdown Park Hotel in Gorey, with sweeping staircases and crystal chandeliers. The 60-bedroom hotel has a full-sized swimming pool, a ‘skin gym’ beauty treatment facility, play areas for children and a busy restaurant. “The Ashdown Park is a traditional hotel, so the focus is on food, weddings and conferences,” says Redmond. “We get strong local business, as well as weddings and events from Dublin.”
The Redmonds built a second hotel, the Amber Springs, also in Gorey, which opened in 2006. This hotel has 80 rooms, a leisure centre, steakhouse and bars, and a pet farm. It was also named ‘Best Family Hotel in Ireland’ last year’s Irish Hotel Awards. “We’re currently developing a 50-bedroom extension to the Amber Springs,” says Redmond. “The rooms will be more like family suites for parents and children.”
The two hotels illustrate the importance of the Redmond brothers to employment in north Wexford – and the financial risks they have had to take. Accounts for the Ashdown Park Hotel show the hotel booked a net profit of €500,000 in 2016. The payroll overhead for the year was €2m, as employment expanded from 86 to 106 people.
The operating company ended the year with liabilities of €3m, with €776,000 in bank debt and €954,000 owed to the brothers’ partnership. Bank of Ireland has a personal guarantee from the Redmonds in relation to the hotel valued at €1m.
At the Amber Springs Hotel, the payroll overhead in 2016 was €2.6m as average headcount increased from 152 to 181 people. The operating company booked a net profit of €1m and the hotel generated €1.3m cash from operations. Year-end liabilities amounted to €3.9m, including €1.6m in bank debt. The two directors were owed €810,000 in December 2016, down from €1.9m two years earlier. The personal guarantee from the directors to the bank in this case is for €2m.
Both hotels know exactly where their Angus beef and vegetables come from – the Redmond farm. The brothers sell all the beef they produce on their Origin Green-rated farm to the restaurants in their hotels. “We felt we needed to do something different to promote our hotels, so we focused on the sustainable food production,” says Redmond. “We can hang our hats on the traceability of our food, which is a big plus these days.”
The pair inherited some of the 300 acres of land they now farm; the rest was bought piecemeal over the last 20 years.
The latest Redmond commercial property venture is located beside the Amber Springs. The four-storey 36,000 sq ft office block is the first of a possible three on their M11 Campus (the other two have planning permission) and it was launched in summer 2017. The main tenant is Wexford County Council, which has partnered with Bank of Ireland to set up an incubation and co-working space in the block, called Hatch Lab.
Gorey is an hour’s drive from Sandyford and with so many people commuting northwards every day, the M11 Campus could catch on. The hope is that the campus will tempt companies away from the high rental prices in Dublin – letting agent Lisney is quoting rent of €17.50 per sq. ft.
“We are working with the council, Enterprise Ireland and IDA Ireland to secure tenants for the campus,” Redmond explains. “We are confident that we’ll get businesses to come down to Gorey. It has a lot to offer, including good commercial activity, lots of schools and housing, and proximity to Dublin.”
The construction arm of the Redmonds’ empire has a complicated corporate set-up. With guidance from Gorey auditors Doyle Foley, everything revolves around the Tomas & Patrick Redmond Partnership, which has in and out funding arrangements with numerous Redmond-owned companies such as Fontex Developments, Gapwise and Robeco Construction.
Paddy Redmond says that the construction property implosion in 2009 didn’t surprise them, though the scale of it did. “We could see that the market was overheating before the crash happened,” he says. “We would try to purchase sites and come away shaking our heads at how expensive they’d become – it made no commercial sense.”
The brothers took pre-emptive action and sold off some sites before the crash. “Those sales helped us carry the cost of losses we incurred during the downturn,” says Redmond. “When the crash happened we had around 60 housing units in development and it took three or four years to sell them.”
Have lessons been learnt? “I don’t know. When people see things happening in the property market there’s a tendency to jump on the bandwagon again. Banks are more selective about who they lend money to this time around, and maybe that’s a good thing. People got into the property industry who didn’t really understand it.”
In Paddy Redmond’s view, the biggest challenge builders and developers face now is access to finance. “There is a lot of development in Dublin financed by Nama and out-of-country funds, who are creaming off developers doing the work. That needs to change if we want to keep money in Ireland. We’re lucky in that we’re financed with Bank of Ireland. Not many other developers are working with the main banks at the moment.”
There aren’t enough hours in the day for the Redmonds, who like to be hands-on when tending to their various construction projects, managing the farm and liaising daily with their hotel managers. According to Paddy, he and his brother are happy with their multifaceted business just as it is. “Sometimes when you see the money being paid for hotels, you’d be tempted to sell. However, selling up is not on our agenda.”
Caption: Paddy Redmond (left) and Tommy Redmond