Business Month June 2014

INCISIVE, OBJECTIVE, INDEPENDENT

June 2014 ISSUE 44 PRICE £2.50 (Where sold) l

THE YANKS HAVE ARRIVED How US investors are snapping up our prime property assets

PAUL GOSLING ON NORTHERN IRELAND'S GROWING PROSPERITY GAP, NICK LEESON ON HISTORY REPEATING ITSELF PLUS: THE CHAIRMAN GETS OUT AND ABOUT

CONTENTS

48

COVER STORY

AMERICAN INVASION A wave of interest in Northern Ireland by US companies is helping lift the property market

Editor’s note Margaret Canning

m.canning@businessmonth.co.uk

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FEATURES

12 Analysis: What’s worse for an investor than losing money?

14 Analysis: Now there’s a far better game in town for landlords 20 Analysis: Winning the right to vary corporate tax is a dead cert, says the campaign chief 26 I’ll tell you another thing: Meet Philip Cassidy – a man with the right app-titude 28 SME: Discover why a cattle farmer on Divis Mountain is putting goat on the menu 32 Inside Report: Paul Gosling investigates a divisive issue creating a two-tier recovery

FOCUS

38 Diary farming: Global demand for milk powder is good news for our farmers 42 Legal sector: Jobs galore as Northern Ireland establishes itself as an international hub

OFFLINE

46 Out to lunch: Book shop owner David Torrens 48 Day in the life of: Meet dentist David Nelson 48 Seven-up: Jim McCauley reviews Citreon’s Grand C4 54 Wheel deal: Experience the thrill of exploring stunning New Zealand on two wheels 58 The Chairman: The inside track on business 62 Last Word: Nick Leeson on the power of choice BUSINESS MONTH 124-144 Royal Avenue, Belfast, BT11EB Editor - Margaret Canning

26 Sales manager - Jackie Reid Contact: +44 2890 264070 or email: j.reid@belfasttelegraph.co.uk

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Design and production: RE&D NI Business Month is an imprint of Independent News and Media (NI)

ELCOME to the June edition of Business Month, where we’re reporting on some of the unexpected outworkings of the economic recovery The trend for UK funds to snap up commercial properties here is nothing new.

However, the arrival of US giants like Cerberus, which has purchased Nama’s loan book in Northern Ireland, and Marathon Asset Management, new owners of The Obel and two retail parks, is a remarkable development and one which Rebecca Kincade pays close attention to in this month's cover story.

But not all the repercussions of recovery are working out in an entirely positive way. In his Inside Report, Paul Gosling considers whether the falling claimant count is evenly spread around the province, and whether the recent brace of jobs announcements are benefiting the areas hardest hit by the recession.

Clare Weir takes an in-depth look at the dairy sector, which has received a fillip from Dale Farm buying some of the Fivemiletown cheese brands.

And Simon Rowe looks at the last few years of job creation in big-name law firms setting up back offices in Northern Ireland.

Here’s hoping for more good news for the remainder of June — please enjoy the magazine in the meantime.

2 June 2014 BUSINESS MONTH 3

NEWS BITES

6.9%

Annual increase in quantity bought in the UK retail industry in April

1.3%

Monthly increase since March

6.3% Year-on-year growth in the food sector

6.2%

Year-on-year growth in the amount spent in the retail industry

13.3% Year-on-year growth in the amount spent online in April

2.6%

Monthly increase in the amount spent online

Source: Office for National Statistics

Germany’s Diehl ‘not interested’ in B/E THE boss of a leading German aviation supplier has said he is not interested in buying any part of B/E Aerospace, which has a base in Co Down.

Rainer von Borstel, chief executive of Diehl Aerosystems, told reporters at the ILA Berlin Air Show that the company was not going to make a move for B/E, which employs more than 800 people in Kilkeel making aircraft seating. Diehl makes cabin furniture for Boeing, Airbus and Bombardier.

B/E Aerospace has tasked its financial and legal advisers to look into a possible sale or restructuring to “increase shareholder value”. Rumoured suitors are German company Recaro Aircraft Seating, US firm Honeywell, French manufacturer Zodiac, United Technologies Corp and General Electric .

However, Mr von Borstel said Diehl was not entering into talks with the Florida-headquartered firm. “The only thing we're missing is seats, but that's not something we plan to go into,” he said.

Brothers in family firm add £100m to wealth TWO brothers behind a familyrun medical firm in Co Down have seen their wealth rocket by £100m in just a year.

The annual Sunday Times Rich List for Northern Ireland reveals the 20 richest people here are worth £4.224bn, and most on the list have seen their personal fortunes getting bigger year-on-year. According to the countdown, one of the biggest gains recorded in Northern Ireland during the past year was by third-placed Paul and Jeremy Eakin.

The TG Eakin medical supplies company, based in Comber and founded by their father Tom in the 1970s, specialises in the manufacture of products for use in stoma and wound care.

The list reveals that Northern Ireland still has only one billionaire: the wife and family of the late Lord Ballyedmond.

4 BUSINESS MONTH 2 June 2014

WELCOME VISITORS: Enterprise, Trade and Investment Minister Arlene Foster welcomed a delegation from the United Arab Emirates Businesswomen’s Council at a reception at Parliament Buildings. The group of 10 high-profile business women from Dubai and Abu Dhabi business women councils, was visiting Belfast as part of UK-wide business mission organised by UK Trade and Investment (UKTI) and the UAE-UK Business Council, which aims to build stronger relations at business and government levels.

UTV expecting to score big from World Cup

Agri-food sector set to keep feeding economy

BELFAST-based radio and television broadcaster UTV Media plc said it expects a big boost to its coffers later this year, thanks to advertising related to the World Cup. The company's interim management statement recorded growth across radio in Great Britain and Ireland, and in television. UTV Media said revenue rose 7% to £27.8m for the quarter ended March 31.

First-quarter revenue from its Great Britain radio unit rose 10% for the quarter and talkSPORT's revenue was up 16%. talkSPORT had particularly strong growth, fuelled by the build-up to the FIFA World Cup, which will also be shown on UTV in Northern Ireland.

Revenue at UTV's television business, which accounted for about a third of sales last year, rose 4%, with London net advertising revenue up 3% and Irish net advertising revenue up 11%.

THE agri-food sector could become an even more important driver of the Northern Ireland economy in the future, according to the head of Ulster Bank.

The bank, which is the chief sponsor of the Balmoral Show, held an event attended by companies from the food and drink sector. Speakers included Dr Chris Brown, senior director of sustainable business at Asda, as the supermarket announced its biggest ever own-label deal in Northern Ireland.

Finnebrogue in Downpatrick is set to produce a new range of Asda sausages using meat supplied by Karro in Cookstown.

Dr Brown said the multimillion deal was “the biggest own-label contract to be won by any Northern Ireland Asda supplier”. Ellvena Graham, the head of Ulster Bank's operations in Northern Ireland, said the UK's trade deficit in food,

and growing global demand for produce like red meat and dairy products, all represented opportunities for the sector.

SDC Trailers secures £10m Hireco contract A CO Antrim manufacturing firm has secured a £10m contract to make 600 trailers for a major leasing company.

The vehicles will be manufactured across SDC Trailers' three facilities at Toomebridge, Antrim and Mansfield over the next six months for Hireco.

In just a year, SDC Trailers, which was founded in 1978, has created a total of 170 jobs, with more to follow before the end of the year.

Group turnover to the end of March 2014 was £130m, projected to rise to £150m by 2015, an increase of £20m.

Established in Dublin, Hireco now has seven outlets throughout the UK and Ireland and has already purchased over 5,000 SDC trailers before this order.

NEWS BITES

Invest NI helps create 18,000 jobs PAUL GOSLING

▲ HOTEL ROOMS Average bedroom occupancy rate in 2013 was 74.8%, compared to 73.2% in 2012 ▲ SHOPPING FOOTFALL Footfall in Northern Ireland rose by 12.8% in April, the highest recorded figure for Northern Ireland since December 2012 ▲ HOUSE PRICES House prices in Northern Ireland rose by 7% in the last year, according to Land & Property Services figures. ▲ INFLATION Inflation, as measured by the Consumer Prices Index, rose by 1.8% in the year to April, up from 1.6% in the year ending March. ▲ NEW CAR SALES A total of 55,700 new cars were registered in Northern Ireland in the 2013/14 year — a rise of 16% over 2012/13. ▼ UNEMPLOYMENT Unemployment in Northern Ireland is down 0.9% in the last year, according to the Labour Force Survey. It fell by 1.0% in the UK. ▼ HOUSE BUILDING House building in Northern Ireland is still falling. The number of new builds declined by 17% in the last quarter on the same period last year. ▼ ROI JOBLESSNESS The rate of joblessness in the south fell by 2% to 12% in the first quarter — a slower than expected fall ▼ EUROZONE ACTIVITY Business activity was steady in May in the eurozone but was down slightly from 54% in April to 53.9% 6 BUSINESS MONTH 2 June 2014

INVEST NI has announced that it has played a role in the creation of almost 18,000 jobs in the past three years. Of these, more than 6,000 were created in the 2013/14 financial year.

Chief executive Alastair Hamilton said that many more jobs are in the pipeline, with a time lag between the support provided by Invest NI and the related jobs actually becoming available.

“Projects typically take between three and five years — and for many larger projects up to 10 years — to create the jobs initially promoted at the outset,” he said.

“Therefore, meaningful data on the number of jobs created as a result of jobs promoted during this corporate plan period — 2011-12 to 2014-15 — will not be available for some time.

For example, for a job announcement made in 2013-14, it will be 2016-17 before we will begin to have meaningful data on the number of jobs actually created, depending on the conditions of the letter of offer.”

Enterprise Minister Arlene Foster congratulated Invest NI on the figures. She said: “Invest NI has recorded its best year-end performance to

The Invest NI building on Bedford Street date with these tremendously encouraging figures, which show that the total number of jobs promoted, businesses supported, salaries and investment planned are all at highest ever levels.

“Over £1bn of investment has been secured and 11,000 jobs promoted — this will have a real and positive impact on our local economy. A total of 5,249 offers of support have been

made to businesses, with 94% to locally owned companies” The annual report of Invest NI for the period 2013/14 will not be publicly available until after it has been presented to the Northern Ireland Assembly.

For the first time, the new annual report will provide figures for the jobs actually created, rather than the less precise ‘jobs promoted’.

Lords call to ‘get on with fracking’ PAUL GOSLING A HOUSE of Lords committee has urged the UK and devolved governments to take faster action to enable shale gas exploration and extraction to go ahead. There are substantial shale gas reserves in Northern Ireland, in Fermanagh, with other potential fields in Co Antrim and Co Londonderry.

The report from the House of Lords economic affairs committee concluded that there are multiple economic benefits from shale gas extraction.

These include reduced energy importation, improved energy security, the creation of jobs, the retention and development of the energy industry in the UK and significant tax revenues, said the committee.

Committee chairman Lord McGregor said: “The committee

strongly supports the government’s decision to go ‘all out for shale’. But here in the UK we have not yet left the starting gate. Developing a successful shale gas and oil industry in the UK must be an urgent national priority.”

He added that shale gas production could lead to a reduction in carbon emissions if its use substituted for coal and other types of higher carbon-emitting energy sources.

Lord McGregor suggested safety worries had been overblown.

“Although some concerns such as earth tremors have been much exaggerated, the committee believes that legitimate concerns raised by opponents of fracking about possible harm to the environment and health should be

taken seriously. The committee concludes however that, with appropriate regulation, the risks are low.”

But David Elmes, an energy sector expert and professor of energy practice at the Warwick Business School, urged ministers to take a cautious approach.

“We are still at an early stage of knowing what shale gas can be produced commercially in the UK,” he said. “Lessons have been learned from early US shale gas development to put the appropriate regulations in place for safe shale gas development. Proceeding with caution to understand what shale gas resources we actually have is part of understanding the choices we have for energy in the UK.” Decisions regarding shale gas development in Northern Ireland are devolved to the Northern Ireland Assembly.

NEWS BITES

Marine energy costs falling PAUL GOSLING THE cost of electricity generation from waves and tides is coming down, making marine energy more cost competitive, according to a study from the UK Energy Research Centre and the Energy Technologies Institute. The findings could have a significant economic impact on Northern Ireland and on the border counties in the Republic.

A pilot tidal electricity generation project is under way in Strangford Lough, while the north Antrim coast off Ballycastle is recognised as one of the most promising areas in the UK for tidal electricity generation. County Donegal has been highlighted as one of Ireland’s potential sites for using wave power to generate electricity. However, the study reports that tidal and wave generation need to become cheaper to compete with other energy technologies. The University of Edinburgh’s Henry Jeffrey, who was involved in the study, said: “The UK marine energy sector could be worth more than £70bn and support 68,000 jobs in 2050. But we are at a critical point in the development . . . decisions made now will determine whether marine energy will fulfil its potential as a significant source of energy by 2050.

“Over the next decade, innovation needs to be prioritised to support installation and recovery demonstration and potentially small-scale array trials — by doing this we will significantly reduce the cost of marine energy, enabling the UK to take advantage of its abundant wave and tidal resource.”

Richard Knight, deputy director of the Energy Technologies Institute, added: “There is huge potential to accelerate the development of new technology. The industry needs to build viable business propositions through cost reduction and reliability demonstration to help establish a viable UK market. We hope this report will help inform decision-making and help focus innovation investment.”

8 BUSINESS MONTH 2 June 2014

Northern Ireland self-employment falls PAUL GOSLING The number of people selfemployed in Northern Ireland has fallen, according to the latest labour market statistics.

This is despite the rise in selfemployment across the UK and the increased employment levels in Northern Ireland.

There were 107,900 people working as self-employed last year in Northern Ireland, a fall of 700 compared to 2013.

There was a rise of 9,100 in those who were self-employed last year in the agriculture and food sector and a rise of 1,600 in the construction sector. But

this was more than offset by a fall of 11,400 people working as self-employed in services.

By contrast, self-employment is continuing to rise substantially in the UK as a whole.

The latest figures from the Office for National Statistics show the number of people working full time self-employed in the UK rose by 238,000 in a year, with a further 138,000 who are part-time self-employed.

Angela McGowan, the chief economist at Danske Bank, said: “It appears that Northern Ireland still has significant scope for driving up local self-

employment levels and policy focus in this area could reap significant rewards for the economy going forward.”

Self-employed online platform Freelancer.co.uk said there is substantial evidence to show that people using the web to promote their services when going self-employed are far more likely to succeed.

It says that a survey of 2,000 self-employed people found those who use websites to promote their services and use a search engine optimiser to draw online traffic to their sites are four times more likely to survive in business.

New ‘super councils’ urged to back micro-enterprises PAUL GOSLING NORTHERN IRELAND’S newly elected 11 ‘super councils’ have been urged to use their economic development powers to support local micro-enterprises.

A report from sector body Co-operatives UK says that evidence from the United States shows that locally owned businesses keep three times more income within the local economy than do large companies.

Report author David Boyle said: “Large-scale development is often an expensive white elephant that lacks any connection to the people it is supposed to help. More needs to be done to encourage the growth of local enterprises, including cooperatives.

“We need a patient and dedicated approach to growing social capital that underpins thriving local businesses in a ‘virtuous cycle’ that is sustainable for the long term.”

The report argues that too often support for economic development is disconnected from local social and economic need, with the result that growth does little to counter deprivation.

More effective approaches are possible, concludes the report, when economic development is led locally. Northern Ireland’s new councils will have much greater levels of responsibility than their predecessor district

Research shows that locally owned businesses tend to keep three times more income within the local economy than large companies councils, which will cease to exist in a year’s time.

“We hope that more will be done by our newly elected politicians to explore ways of putting ultra-micro approaches at the heart of economic strategy,” said

James Wright, policy officer for Co-operatives UK. “We need to see more hands on experimentation at a local level and this is something that the cooperative and mutual sector not only excels at, but leads the way.”

NEWS BITES

One in five graduates is now a millionaire, compared to one in ten non-graduates

Wannabe millionaires should get a degree PAUL GOSLING UNIVERSITY graduates are twice as likely to become millionaires as those who do not hold a degree, according to the latest data from the Office for National Statistics.

One in five graduates is now a millionaire, compared to one in ten nongraduates. Of those who do not achieve any formal educational qualifications, a mere 3% become millionaires.

Although the statistics were compiled solely from the population base in Great Britain, they have a special relevance to Northern Ireland as the UK region with the smallest university sector, per capita.

While personal wealth has fallen for the majority of the population during the financial crisis, the number of millionaires in Great Britain has risen by 50% in the last four years.

The super rich have benefited in particular from quantitative easing — increasing the supply of money, which has assisted in rising values of some asset classes, including shares and central London properties.

There has also been an increased concentration of wealth in recent years.

The most wealthy 10% of British households now own 44% of total wealth.

10 BUSINESS MONTH 2 June 2014

Skills Exchange NI provides employers with free access to professional advice across a variety of sectors and types of organisation

Hubs seeks to balance peaks and troughs of skills demand PAUL GOSLING THE UK’s first online skills hub has gone live in Belfast. Skill Exchange NI is an employer-toemployer network that shares skills, knowledge and staff.

The network provides employers with free access to professional advice across a variety of sectors and types of organisation. It also enables employers to borrow staff from each other, for example to deal with seasonal surges in demand. Employers can use the network to share knowledge, engage in skill development programmes,

obtain advice on recruitment and retention, share resources and to access training, skill development and business mentoring resources.

There will also be support for work experience and role placement programmes through the network.

Robert Cooper, chief executive of Harland and Wolff, said: “Skill Exchange NI is an excellent way for companies to balance the peaks and troughs of demand without losing vital skills. It is a win-win for both employer and employee.”

Employment Minister Stephen

Farry added: “This initiative will help to retain and develop our highly valuable skilled workers.

“This is better for both local companies and individuals, as staff can be placed into meaningful alternative work instead of facing unemployment.”

There are hubs in Belfast, Ballymena, Craigavon and Londonderry.

Skill Exchange NI is supported with finance from Dunbia, Harland and Wolff, JTI, Michelin, Moy Park, Northern Regional College, Ulster Bank and Wright Bus.

NEWS BITES

Eyes glisten as Ford boss bids farewell MARK LEFTLY THE man who saved Ford claimed the eyes of his British staff were “glistening” as he said farewell ahead of retiring — even though he had made hundreds of their colleagues redundant.

Alan Mulally, the car maker's chief executive, is on a whistlestop tour of Europe before he retires in July. Within 90 days of joining Ford in 2006 he in effect mortgaged the company's assets for $23.6bn (£14bn) in what was considered a desperate pitch to banks to help him save the group.

Mr Mulally admitted that Ford had gone “all in” after he joined from the plane maker Boeing. But those loans were negotiated before the credit

crunch, so Ford averted the threat of bankruptcy.

By moving early, Ford did not have to ask for bailout funds, unlike its rivals General Motors and Chrysler. It was back in the black by 2009 for the first time since 2005 and Mr Mulally's cultural changes, which included demanding that senior managers help each other out rather than hide problems, have been

was closed as work was transferred to Turkey. A plant in Dagenham also shut down.

After visiting staff in Essex, including 3,500 at Ford's flagship European research and development facility in Dunton, Mr Mulally said of British factory closures: “We did the right thing.

We now have production of the size [that matches] to the real demand. We're about the right size now — actually,

widely hailed.

However, the restructuring meant operations were overhauled worldwide, including in the UK. Last year, 500 workers took voluntary redundancy or early retirement when a transit van factory in Southampton

growing.”

In January, Ford sold 21,792 cars in the UK, up 11% on the start of 2013, and its market share hit 14.1%, 4.5% ahead of its nearest rival.

“First I said to [the UK staff ] thank you, then I said congratulations, then I said thank you

again and congratulations,” he said. “Eyes were glistening… they ought to feel proud.”

However, Mr Mulally warned that there was still “overcapacity in Europe”, suggesting that some motor companies will either go out of business or be swallowed by rivals unless they go through their own cuts.

Mr Mulally will be succeeded

by Mark Fields, the chief operating officer. Mr Fields impressed Mr Mulally as he was the first executive to identify the areas of his own business unit that were going wrong when Ford was spiralling towards a $12.7bn loss in 2007.

Mr Mulally said he applauded when Mr Fields flagged up the problems. Other executives then realised they could help.

“That was a defining moment, when I knew we'd be okay,” he added. “Ford had become a house of brands, very regionalised. They weren't the best in class… Every vehicle from 2008 was best in class.”

He also said Ford was benefiting from the best-planned management transition in its history.

2 June 2014 BUSINESS MONTH 11

NEWS ANALYSIS

Upside of losing money

So you think the worst an investor can do is lose their money? Best think again, writes Alan Watts, director of Halo, the NI Science Park-based business angels

I

OFTEN hear investors talk in terms of downside risk versus upside gain.

What they mean is if it all goes wrong, how much might I lose weighed up against how much might I make if this venture is successful.

This is a fairly natural equation to try to work out before you write that cheque — unless of course you have some other reason for investing. This might be knowing or being related to the entrepreneur or caring about the area of operation, eg a company investigating improvements in cancer care.

But for the most part the calculation is a financial one.

The upside part is pretty easy.

You look at the claims made by the company, divide them by some number (such as your shoe size or how many cups of coffee you have had today) and then see if this feel ‘about right’.

12 BUSINESS MONTH 2 June 2014

For the bad news scenario, there are often tax advantages to be had. Two thirds of UK angel investments are made using various forms of Enterprise Investment Scheme tax relief. And this allows you to offset your loss again tax at your highest rate. So you might be able to only lose 60% of your money with the 40% coming back in tax. And that’s how far most investors think.

But they are wrong. Because this is a perfect loss situation.

Believe it or not this is the best case when you only lose your money. It can get a lot worse.

Suppose your investment has got into real financial trouble.

It might not even have the money to close down properly and you, as an investor, might now be a director. So you could end up shouldering some of the costs of winding down the business, as well as all the time and hassle involved in doing it.

And there’s more… What if

the close down is messy? Say someone goes to court, perhaps trying to win control of the intellectual property behind the company? Or a creditor claims mismanagement or illegal trading. Now you are into litigation, blank cheques to lawyers, even more of your time and long timescales.

And then there’s the really messy close down — litigation plus reputational damage as the media pick up on the story and have a field day with your name. Your co-investors might well get involved, and not necessarily on your side.

I’ve even heard of a case where well intentioned investors were accused by a large company of providing funding aimed at fighting a court case against this large firm rather than just investing in the small company.

And so, they were named personally in a lawsuit

with such large figures attached to it that they could all have been forced into bankruptcy.

A perfect storm indeed!

So perhaps you can see that ‘only’ losing all your money could actually be a good result!

Going back to the perfect loss, there is an upside. The entrepreneur, management team and investors will all have learned lessons. And these will increase the likelihood of success in their next ventures.

In some countries, especially the USA, having failed in a venture is often seen by later investors as a good thing in that you will have learned from the experience and some people believe that you are now a better investment risk because of this.

So the storm may be, if not perfect, at least quite helpful.

NEWS ANALYSIS

New game for landlords The court ruling which deemed that the odds were unfairly stacked in favour of tenants when it came to administration is to be welcomed, says Julie Cathcart

T

HE ongoing economic downturn has placed increasing pressure on companies across the UK and there have been a number of highprofile retailers that have gone into administration.

Tenant insolvency can be a complex process involving numerous legal technicalities, and a lack of clarity in the law has also resulted in some companies choosing to use the process as a means of avoiding paying rent.

Until this year, a legal loophole, intended to help struggling businesses, meant that if a business filed a notice of intention to appoint administrators immediately after their quarterly rental date, and completed that appointment within 10 days, the business could continue trading in the premises rent-free.

While, of course, attempts to alleviate the pressure on hardpressed businesses are welcome, the loophole left open the possibility of abuse.

Landlords effectively joined the queue with other unsecured creditors, giving them little chance of getting paid while the administrator confirmed to run the business from the premises and some companies were choosing to play the system.

However, in a landmark test case in the Court of Appeal, common sense has finally prevailed.

This case has been rightly called a game changer — and not just because the legal action was taken against the administrator of the computer games retailer Game.

Game went into administration on March 26 2012, the day after the traditional deadline for quarterly advance payment of commercial property rent.

With roughly 600 leasehold retail units across the country, the company was due to pay approximately £10m in rent under the various leases.

Private investor OpCapita subsequently rescued the company and the new Game

14 BUSINESS MONTH 2 June 2014

experienced a significant turnaround in its financial performance. Roughly half of Game’s stores were closed, leaving the landlords of those stores to prove for their rent in the administration as unsecured creditors. Roughly £3m of the unpaid March 2012 quarter’s rent remained attributable to the stores that remained open and trading.

As matters stood, the administrators of the open stores were not liable to pay the March 2012 quarter rent as an expense of the administration because it had fallen due prior to the date of administration, despite the fact that the administrator was clearly occupying the properties for the purposes of the administration.

The troublesome issue came to a head when some of Britain’s biggest landlords — British Land, Intu, Hammerson and Land Securities — went to court to challenge the administrator and push for a change that would see landlords given priority in the process.

This loophole has now been closed off, thanks to the twoyear action taken by the quartet. Judges have ruled that the law was unfairly stacked in tenants’ favour.

The ruling allows landlords to collect rent from companies in administration — a move which will be widely welcomed by property industry professionals, but is unlikely to please tenants who feel under financial pressure.

We view this as a common sense approach that provides

The ability to manipulate the rent due date has been removed clarity on an contentious issue, giving an extra measure of protection to landlords as well as removing the potential for the abuse of the system by trying to gain an advantage through the timing of appointing an administrator.

In practice, this will mean that from now on rent will be payable on a pay-as-you-go basis. A caveat is that Game is considering an appeal to the Supreme Court.

In my view, where a tenant or administrator continues trading it is only fair that the landlord should receive rent properly due. In these circumstances the landlord cannot get the unit back and re-let it, so is

potentially in a worse position than if the tenant had vacated altogether.

In the case of a multiple store retailer, rental exemptions on this scale have a massive impact on landlords letting across large portfolios. It’s not just a single shop — it could be hundreds.

And the loss of income doesn’t stop at the rent, there’s also the service charge, insurance, etc.

This ruling is welcomed as it removes the ability to manipulate the rent due date, clarifying the law for both tenants and landlords.

Julie Cathcart is senior surveyor at CBRE commercial property agents, Belfast

ECONOMY WATCH

Double

Our economists take a look at trading partners to see how months will affect the trajectory

T

he single most important influence on the Northern Ireland economy concerns the performance and prospects of the UK economy (GB). Not only is Great Britain our largest trading partner, it is also the largest source of investment and visitor numbers.

While Northern Ireland’s recent recession was deeper and longer than the UK’s economy, and the recovery has been much weaker, the local economy traditionally follows the same economic cycle as the UK. This is due to the fact that Northern Ireland follows the same fiscal and monetary policy arrangements as the rest of the UK. In addition, given that Northern Ireland shares a common currency with the UK, the price of imports, the competitiveness of exports and the rate of inflation are all linked to the fortunes of sterling.

Therefore while Northern Ireland is exposed to other external influences, alongside its own economic micro-climate, the performance of the wider UK economy is the most significant factor that can move the needle on Northern Ireland’s economic dial. For this reason, local businesses and households alike should be taking a keen interest on the strength of the UK’s economic recovery.

The incoming news on this front is all pretty encouraging.

According to the Bank of England’s latest forecasts, the UK economy is expected to grow by 3.4% in 2014, double the rate posted last year. Furthermore, the UK is expected to be the fastest growing economy in the G7 in 2014. However, it should be remembered that the UK recovery to date, as far as output is concerned, has been the weakest recovery in recent history. Indeed, the UK will only regain its pre-crisis level of output later this year. The recovery remains largely dependent on consumer spending with export

16 BUSINESS MONTH 2 June 2014

Great Britain

Richard Ramsey

Chief economist Ulster Bank growth yet to ignite. It is encouraging though that business investment has been increasing for the last five quarters, albeit it still remains some 8% below 2007’s peak.

The UK’s unemployment rate dropped to 6.8% in Q1 2014 — a

Labour market figures are encouraging in terms of employment five-year low. Meanwhile the UK’s spectacular employment recovery, which is largely due to a surge in self-employment, continues. The rate of employment growth accelerated in Q1 with an additional 283,000 individuals engaged in work in some shape or form. This represented the biggest quarterly in-

crease since records began.

Self-employment accounted for two-thirds of this rise and propelled the UK employment figures to a record high. Some 700,000 more people are in work in the UK today than there were a year ago.

Overall, the labour market figures are encouraging as far as rising employment and falling unemployment is concerned. However, the recovery in real earnings (inflation adjusted) remains in its infancy.

Following a sustained period of above target inflation, which severely eroded households’ disposable income, the annual rate of consumer price inflation has finally fallen below the MPC’s 2% target since the start of the year. Average earnings are expected to outpace inflation later this year as consumers begin to claw back their lost purchasing power. It should be noted that since the credit crunch officially began back in August 2007, the cumulative rise in consumer price inflation has been over 22%. This

is more than double the cumulative rise in average earnings.

Meanwhile UK house prices are already 5% above their precrisis peak — though this is largely due to London and the South East. London prices are 27% higher than they were six years ago. The Bank of England Governor, Mark Carney, has highlighted that the housing market is the biggest single risk to the UK economy. Northern Ireland will be hoping that region specific measures will be applied to address this problem rather than a blunt UK wide instrument that could harm the local housing market recovery.

The ongoing improvement in the UK economy has been accompanied by a 10% appreciation in sterling since last summer. This again is a mixed blessing. Imports will become cheaper and exports will lose some of their price competitiveness. For an economy that wants to rebalance away from consumer spending towards exports, this exchange rate is not ideal. Although those of us holidaying abroad this summer will welcome the additional purchasing power that a stronger pound buys.

Sterling has also strengthened due to rising interest rate expectations. Despite the economic recovery, the Bank of England’s Bank Rate remains at its 320-year low of 0.5%. Inevitably, in time, the UK economic recovery will lead to a return to more ‘normal’ interest rates with rises expected next year, potentially ahead of the next General Election.

Political uncertainty will be a feature until the 2015 General Election. However, whoever wins will have to continue to work towards a meaningful recovery in the public finances.

Therefore public expenditure cuts, tax rises and interest rate rises will all form part of the UK’s wider economic recovery and this will impact on the local economy’s recovery too.

trouble?

Northern Ireland’s two main their performance in the coming of our economic recovery

W

HEN assessing the performance of the Irish economy it is important to bear in mind that Irish data can quite often give confusing signals about the state of the economy. This is due in part to the large external trade sector, where exports constitute over 100% of GDP (105% in 2013).

The National Accounts data for 2013 are an apt example of this. They show that on a GDP basis, the economy contracted by 0.3% last year, following growth of just 0.2% in 2012.

Exports registered a very poor performance, growing by a meagre 0.2% last year.

Although service exports grew by 4%, the volume of goods exports fell by close to 4%.

The decline was nearly all attributable to a sharp fall in pharmaceutical exports (drop of €4.7bn, equivalent to almost 3% of GDP) following the expiry of patents on a number of key products (known as the ‘Patent Cliff ’) manufactured in the country.

However, the contraction in pharma output and exports is having only a limited impact on the real economy. Indeed, the main effect seems to be on the profits of the multinationals concerned, as there was a marked decline in profit repatriations or outflows from Ireland in 2013.

Therefore, Gross National Product (GNP), which strips out to a large extent the activity of multinationals, is a better indicator of underlying activity in the real economy.

The GNP data for 2013 show a strong performance, with growth of 3.4%. What is particularly encouraging is the clear evidence of a recovery in domestic demand, with domestic spending growing by close to 2.5% year-on-year in the second half of 2013.

These trends are in keeping with other data pointing to a

Ireland

John Fahy

Senior economist at AIB strong performance by the economy last year, in particular employment, which grew by 2.4%. The strong job growth contributed to a marked fall in unemployment during 2013. The jobless rate fell to 12.1% in the final quarter of 2014, down from 14.2% a year earlier. The more timely Live Register data show the rate down at 11.7% in April.

The figures published to date for 2014, including PMIs, consumer confidence, live register figures and retail sales data suggest that the

A growth rate of up to 3.5% is achievable for Ireland’s economy

improving trend in the economy is being maintained and the prospects are favourable for the Irish economy for the rest of 2014 and 2015.

Given the importance of exports to Ireland, the outlook for the global economy is a key factor, in particular for our three main export markets, namely the eurozone, UK and US. The consensus forecasts are for the growth in these economies to accelerate over the course of this year. This improvement in global growth forms a positive backdrop for Irish exports in 2014-15.

Meanwhile, on the home front, the adjustment in the domestic economy appears to be largely completed and therefore is no longer a drag on growth. Indeed, the strengthening of domestic spending last year occurred even though the government sector continued to contract, while there was no recovery in house building activity.

At the same time, house building needs to rise from its

current very depressed levels.

House completions are running at just 8,500 units per annum, whereas, demand for new housing is estimated at around 25,000 units per year.

Price developments over the last year are reflective of this mismatch between supply and demand, with upward pressure on prices, most notably in the main urban centres.

The scale of fiscal tightening required in 2014-15 is much less than in recent years, meaning the fiscal drag on the economy is now lessening appreciably. There is even speculation that there may be scope for income tax cuts in the next budget, while still meeting the 3% 2015 budget deficit target.

The main risk to the economic recovery is from the fragility of the global economy, especially in the eurozone, given the importance of exports to the Irish economy.

There are also concerns about the slowdown in many of the emerging economies, most notably China, and the risk this could possess for the global economy as a whole.

Domestically, the high indebtedness and scale of balance sheet repair by households is a new phenomenon for Ireland and thus it is difficult to gauge the duration or extent of deleveraging in the economy and the headwind this poses to the recovery. However, it will slow the pace of recovery in consumer spending.

Overall, while risks remain from both the uncertain external environment and internal factors as the economy continues to rebalance, it appears that Ireland is moving onto a solid growth path. Therefore, we expect the economy to perform well over the next couple of years and believe that a growth rate of up to 3.5% is achievable, as long as the external environment remains reasonably favourable.

2 June 2014 BUSINESS MONTH 17

COVER STORY

POWER OF THE USA

The surge of interest in Northern Ireland properties by American companies is driving the market, writes Rebecca Kincade

T

HE early months of 2014 have brought a wave of interesting developments for the commercial property scene. Most notable was Nama’s sale of its entire Northern Ireland loan portfolio to New York-based Cerberus Capital Management in a transaction reportedly worth in excess of £1bn. This was soon followed by confirmation that a New York investment fund, Marathon Asset Management, had paid more than £20m for the Obel development in Belfast. Marathon also bought both Cityside Retail Park and Shane Retail Park.

So why is Northern Ireland suddenly on the radar in America? According to CBRE's bi-monthly research report, the property market has effectively been on hold as a result of Project Eagle — Nama’s recent sale. While this transaction was under way, the sale of several investment properties and portfolios were delayed as sellers and buyers alike tried to monitor the potential implications of this sale. Activity is expected to improve substantially over the course of the coming months, particularly as several large transactions have already moved ahead.

Brian Lavery, managing director, CBRE NI, was the selling agent for Marathon’s purchase of Shane Retail Park and Cityside. He said above average returns on investment are attracting US companies: “Firms such as Marathon are looking for 7%-8% returns and in prime markets such as London at the moment they will only get 4%. Northern Ireland is in a section of its property lifecycle which makes it an ap-

18 BUSINESS MONTH 2 June 2014

pealing opportunity. Sovereign wealth funds will continue to go to places such as London and Paris because Northern Ireland is too small for them but American funds can see the advantages of investing here.

“This interest has come purely because we offer good value for money and as long as have stability, it will keep these firms in the market.”

Mr Lavery described a fiercely competitive bidding landscape, with many commercial sales closing well above the asking price: “We are likely to see this trend of American funds entering the market last for approximately 12 months. The funds like to place their money in large chunks on higher value portfolios because they have a lot to spend. We are expecting there to be more competition from mainstream institutions in the UK. However, they will usually bid at a lower level, up to approximately £50m.”

The entrance of these big spenders into the market is bringing renewed investment into stock which hasn’t been upgraded for the past six or seven years and this is a fact that Mr Lavery welcomes: “When major institutions invest in a certain location, it attracts others to do so and we anticipate that more will follow suit. We are likely to see standards in these developments rise as investment is made to improve facilities. Banks still have to recapitalise quite a bit and we think that there will be enough stock to fuel this trend for the next year.”

Jim Houston, director of property at Cleaver Fulton Rankin, has been dealing with

various high-profile investors coming into Northern Ireland over the last year, including the £30m purchase last year

by Scottish Widows Investment Partnership of Tesco Extra in Newry.

He said: “We are noticing an increase in activity particularly since last summer with the sale and purchase of investment properties gathering pace. US investors are coming to the market because of the value for money available and this is beginning to attract more attention. In fact they are now surprised to find that in common with other external investors they face competition and properties are going for over the asking price. For the last couple of years they have been purchasing both assets and loan books, and an increase in their interest is great for the market.”

US investors don’t face any barriers when coming into this market. They only have to be advised of the various property taxes they will have to pay. Despite the increase in US firms, the main interest in the market remains that coming from UK-based pension and investment funds that are self-financing.

Mr Houston added: “These firms don’t need bank loans to purchase large developments and typically they will be assigned money to spend outside of London. It is inevitable that they should look at Belfast, given the returns on investment that are on offer.

These transactions ultimately come down to value for money. Investors want to know what the opportunity is and what the return will be.

>> Turn to page 20

The Obel building in Belfast which has been bought by New York investment fund, Marathon Asset Management

2 June 2014 BUSINESS MONTH 19

COVER STORY >> From page 19 We hope that this trend will continue as it is helping to sustain an investor-led recovery.

The property and construction industry is very important and this increase in activity will offer a great general boost for the economy.”

In May it was confirmed that Savills had been appointed to sell Forestside, Foyleside and the Abbey Centre, with five other UK-based shopping centres included in the portfolio.

Ben Turtle, director, Savills, sold the Obel to Marathon, dealing directly with the American firm to secure the transaction.

He said: “Of the 13 interested parties in that transaction, three of them were from America. If we look back to September 2013 there were no US funds expressing interest. This is a relatively new development that has come about because of a pick-up in the Republic of Ireland commercial property scene. Many of these US firms have infrastructures in place to run assets on the island, so as Dublin has become more competitive they are naturally looking at opportunities in Belfast.”

Mr Turtle said the recent

20 BUSINESS MONTH 2 June 2014

New York-based Marathon Asset Management has acquired Cityside Retail Park, above, and Shane Retail Park activity is not confined solely to the American firms. He has attracted interested investors from Switzerland, Germany, Canada and UK pension funds for recent transactions.

He added: “Last year the yield would have been 100-150 basis points away from what a similar asset would reach in Great Britain. Now this is down to 5075 basis points for prime assets because of the competition in the market. It is still appealing

to invest in Northern Ireland, but the yield gap has narrowed significantly. Investors will still reach a higher return here than they would in Dublin.”

Mr Turtle described American money as “opportunistic”. “These investors will try to get into markets at the optimal time, before they turn and rise again. I feel that there could be a £500m-ayear investment market here, but a lot of our stock is in the control of the banks at the moment.

Cerberus will have a large part to play in the future of this trend.”

While demand for prime investment opportunities continues to come mainly from UK institutions, the introduction of high-level investors from American and elsewhere is helping to drive forwards confidence in the local market. What remains to be seen is how long our stock levels will sustain this trend and how growing competition will impact on the interested parties.

NEWS ANALYSIS

Tax rights ‘inevitable’

Even if Scotland opts to remain in the UK it seems likely that Northern Ireland will be granted the power to set its own corporation tax rate, says Eamonn Donaghy, KPMG Belfast

O

N September 18 this year, the people of Scotland will go to the polls to decide whether they remain in the UK or become an independent country. Clearly, this is a momentous decision for our Caledonian cousins but the outcome of the referendum will have significant implications for Northern Ireland.

While it is uncertain what the constitutional issues will be for Northern Ireland arising from the outcome of the referendum, one matter which has been inextricably linked with the Scottish Referendum is the decision on whether corporation tax rate varying powers will be devolved to the Northern Ireland Assembly.

In June 2013, the Prime Minister made a commitment that the decision to devolve corporation tax rate varying powers to the Assembly would be taken after the Scottish referendum. Indeed, David Cameron confirmed that if it was decided to devolve corporation tax rate varying powers, a special purpose bill would be introduced at Westminster so as to facilitate the passing the necessary legislation prior to the next General Election in the spring of 2015. This in turn would then give the Assembly the power to reduce the rate of corporation tax for businesses located and operating in Northern Ireland.

So will the outcome of the Scottish referendum impact on the final decision on whether to devolve corporation tax rate varying powers to Northern Ireland?

If the people of Scotland vote for independence, then there could be significant constitutional consequences. However, with Scotland no longer forming part of the UK, it is hard to see why the Westminster government would deny the devolution of corporation tax rate varying powers to the Northern Ireland Assembly. The five main political parties, all of the main

All of the main business organisations are in favour of the Assembly having the right of set the corporation tax rate business organisations and a considerable number of other organisations have clearly indicated that devolving corporation tax rate varying powers to the Northern Ireland Assembly is vital to help grow our private sector, attract foreign direct investment and create thousands of long-term well-paid jobs.

It is difficult to envisage why the Prime Minister would ignore the wishes of a majority of the people in Northern Ireland, especially if the cost associated with reducing the corporation tax rate would have to be paid for by the Northern Ireland Assembly.

Alternatively, if the people of Scotland vote to remain within

the UK, it is once again difficult to see how the Prime Minister could justify not following through on the devolution of corporation tax rate varying powers.

Indeed, this could be further enhanced if, following a close referendum result, it is decided that ‘devo max’ be granted to the Scottish parliament. The more powers which are devolved to the Scottish parliament, the easier it should be for the Northern Ireland Assembly to claim its entitlement to corporation tax rate varying powers. Once again, the full support of the five biggest political parties in Northern Ireland and the backing of all of the main business

organisations’ support will make it difficult for the prime minister to ignore the case for devolving corporation tax rate varying powers.

The outcome of the Scottish referendum will indeed have a significant impact on both the future of Scotland and the other countries of the UK. However, it is possible to conclude that corporation tax rate varying powers are likely to be granted to the Northern Ireland Assembly irrespective of how the people in Scotland vote.

Eamonn Donaghy is head of tax at KPMG, Belfast, and has led the campaign for a cut in corporation tax

2 June 2014 BUSINESS MONTH 21

THE NEW BREED

Sweet sound of success Music’s always been in John Walls’ blood so heading up a sound studio comes as no surprise to the entrepreneur. There have, however, been some unexpected challenges

John Walls is owner of creative business Giga Training which is located in east Belfast. The business has recently expanded to include a new service called Strandtown Studios — a recording studio located in The Strand Arts Centre. Giga Training has been collaborating with East Belfast Partnership on a project called ‘Eastside Sessions’, a music film production showcasing established musicians in iconic locations across the east of the city.

Name: John Walls Company: Giga Training, east Belfast

I

I got into business because...

always knew that I wanted to work in the music industry in some capacity but it took me bit of time to decide which area.

From an early age I was promoting gigs and DJing, sound mixing films and building PA systems.

When I decided to focus on digital media I knew that working for others wouldn’t be the right route for me as I wouldn’t be able to reach my full potential.

This was a big deciding factor for starting my own business. Running my own business allows me the freedom and flexibility to deliver and produce projects in areas I was interested in.

I didn’t always do this...

I’ve worked as a music promoter,

24 BUSINESS MONTH 2 June 2014

events manager and DJ. I also worked for a number of years in the catering industry, which was challenging but is was great training for learning how to work under pressure and to be part of a team.

The best thing about my work is...

From a Giga Training perspective our primary output is to deliver youth-related projects for and on behalf of organisations.

Watching how young people develop, whether that’s through our training programmes or on our placement scheme, really gives me a sense of achievement. It’s great to see young people developing skills and meeting their potential.

The person I take inspiration from when it comes to business is...

My job role is always evolving

especially as I the business grows. I am constantly developing new skills on the job.

Changing job roles has been probably the most challenging thing I’ve had to do in my working life. I really admire people in business who have the ability to delegate — it is a cliche but it is a real skill.

It’s something that I am aware of everyday.

The biggest obstacles we’ve come up against in business are...

Learning to let go. As we developed Strandtown Studios I quickly realised that I couldn't continue to do everything — record bands, edit videos, bookkeeping, design and act as equipment technician. I’ve been lucky that I’ve got a great team behind me with a wide range of skills who help deliver our training programmes and production projects.

My advice to someone thinking about starting up their own business is...

Do it. It’s not the easiest option but the best option isn't always the most straightforward.

It’s one of the most rewarding things I’ve done in my life and I’ve met and work with amazing people.

Northern Ireland needs people who are entrepreneurial to help spur economic recovery and it’s the risk taking, entrepreneurial spirit which is key to this.

In 10 years time I hope to be...

Retired!

I couldn’t go to work without...

This would have to be my iPhone and Macbook Pro, if I leave my charger at home I go into a panic. So much of my work is IT-based that I can’t operate without them.

AND I’LL TELL YOU ANOTHER THING

Helping to change the world Social media and analytics will set the agenda in the years ahead as Philip Cassidy oversees teams across the globe involved in building business applications for clients Name: Philip Cassidy, manag-

ing director of services Europe for Concentrix. He founded gem, which was acquired by Concentrix in 2011.

My first job was…

Working in my father's shop. It was great experience and taught me a lot about dealing with customers, suppliers, stock control, finance, and all round business management from a very young age.

My first real job after leaving university was at the Belfast Telegraph as an accountant. It gave me a great grounding and great experiences for my future career. I still use some of these learns on a daily basis even now.

The person who taught me how to succeed was…

The people who have taught me the most have been in my management team. They have been instrumental in the development of gem and also in the continued success of Concentrix locally and globally.

My business mantra is…

“Revenue is vanity, profit is sanity and cash is king”. This is something that is applicable in all businesses big and small and is critical to success.

It’s all changed since I started out....

When I started out I remember swapping files, using floppy discs, between a team in the same room. The internet has changed that completely. We can now swap files instantly with teams right across the globe. I have global teams in Belfast, Great Britain, US, India and China. These teams all work collaboratively using technology to improve how we work. That includes sharing files, using video conferencing to work together across continents and generally breaking down borders using technology.

In 10 years the world will…

26 BUSINESS MONTH 2 June 2014

Philip Cassidy: ‘The world is changing so quickly I couldn't say what it is going to look like next year let alone in 10 years.’

The world is changing so quickly I probably couldn't say what it is going to look like next year let alone in 10 years. In our business my role is focused on delivering innovative solutions for our clients. We are building applications in Belfast and across the globe adding to our eco-system which ultimately change the way our clients do business. I would like to think that these applications will go some way to

changing the world for our clients or their customers.

Social media and analytics are a key part of where I see things developing in our sector in the next few years.

My one business regret is…

I don’t tend to have regrets. I prefer to look at things as learning experiences.

My one piece of business advice is...

The best piece of business advice that I have received and would like to share is the

difference between management and leadership!

Management is about doing things the right way — leadership is about doing the right thing!

When leadership is encouraged the team operates at a much higher level!.

I couldn’t start the day without...

I normally start the day by checking my emails. In a global business the emails keep coming through the night and I need to prioritise my day.

SME WATCH

No kidding

Despite goat being the most widely eaten meat in the world, it was being largely wasted in the UK. But that’s changing thanks, in part, to a farm on Divis Mountain, says Amanda Ferguson

28 BUSINESS MONTH 2 June 2014

F

ROM a farm on the side of a Belfast mountain to the tables of the city's finest restaurants, Tyndale Goat is gathering quite a following among foodies keen to taste this once derided meat.

After learning that “useless” goat kids meet their death soon after birth due to lack of demand William Haire and Sarah Long have been raising goats on the farm and promoting them since 2012.

In the past two years the goat from the 200 acre Tyndale Farm — located on the side of Divis Mountain looking across Lough Neagh — has made its way on to menus of some of our most popular eateries.

William told Business Month that his family have been “eating, sleeping and breathing” farming for more than a century.

“We've been farming there for 150 years,” he said. “We are cattle farmers. That’s the main enterprise on the farm, producing breeding beef cattle and commercial beef cattle.

“We started the goats back in March 2012. They really came about to help control some of the weeds on the farm and we realised there was an opportunity for meat.

“I had seen Jimmy Doherty, the TV celebrity talking about British veal and the fact there is no British veal, yet we were importing veal from the continent, and as a result the dairy calves were being killed at birth, which is exactly the same as the dairy goat kids.

“I thought this is an incredible waste given the fact that there is food shortages, escalating price of food, all sorts of issues around food, and yet here we are taking a perfectly health animal and destroying it because no one has grasped the nettle and create a market for it. That was how it all started.”

After knocking on doors and taking to Twitter to spread the message about Tyndale Goat it has taken off.

“It’s far healthier than even chicken,” says William. “It’s very low in cholesterol, high in iron, has a reasonable level of protein and it tastes good. We’ve had a few nutritionists talk to us and

we are quite impressed really.

We haven’t really pushed the health benefits. We have just worked on the basis that it tastes good.

“Goat meat is actually the most widely eaten meat in the world. There is more goat meat eaten than chicken or pork.”

The pair are working with a company called Carnbrooke Meats. “Once we have the goats killed they are delivered to them and they do the butchery, the marketing and the sales,” William said.

“I do a little bit to help the marketing and I am always out looking for new customers.

“The likes of Coppi will be selling it, Il Pirata, we’ve had it in Lough Erne Resort, Molly’s Yard in Belfast, Square Bistro in Lisburn, Uluru in Armagh, Groucho’s in Richhill, and we’ve had it in Browns in Derry, with Ian Orr the celebrity chef, and the Malt Room, Raymond McArdle’s restaurant in Great Victoria Street, so there is quite a variety of different places.”

The public can also buy Tyndale Goat from a couple of sources. “Arcadia in Belfast can order it for customers, they know what we have available.

Customers can basically ring them up or call in. The other place is Kingsway Butchers in Dunmurry. We are hoping to expand into the South through Carnbrooke.”

William describes himself as a bit of a “soft touch” where the goats are concerned.

“We don’t want to be big, we want to do the job properly. I am a bit of a soft touch and I just think it’s terrible these animals are killed at birth. If we can give them a good quality of life for the six to 10 months we have them, give them a life and give them a value in death, then whatever they go they are being enjoyed and we are putting a value on that.

“Whether it’s restaurants or people cooking it themselves, it is making their lives worthwhile. We are not in it really for the money. We need to make a profit and it is reasonably profitable provided everything goes accordingly.

“If one dies it leaves a dent in the bottom line but that’s just what happens, but it’s really another income along the cattle side of things, that brings something different to the farm, it’s another income stream.”

Tyndale Goat kid meat

The number fluctuates but at the moment there are around 130 goats on Tyndale Farm.

William's favourite goat cut is the fillet “It's better than any beef fillet I have ever tasted and I am a hardened beef addict,” he said. “Saphyre on the Lisburn Road have a clientele that absolutely laps it up.”

Another Tyndale Goat fan is Jonny Davison, the head chef at Belfast restaurant Coppi.

Tyndale Goat is on the menu at the St Anne's Square in the

Cathedral Quarter. “We use topquality local produce, as good as you can get anywhere in the world,” said a spokesperson.

“Tyndale Goat is one of those products. In terms of the flavour it is fantastic and William is always reminding me of its lower fat content.

“People are really enjoying it. It is good to see a product struggling in the past to be thriving now. It is good that such a great product is getting a lot of press and respect.”

2 June 2014 BUSINESS MONTH 29

ASK THE EXPERTS With retirement just a few years away, we have hopes of selling our family business. What steps do I need to take to ensure a smooth sale and maximum profit?

Firstly, you should undertake an honest assessment of the current business position. Changes may be necessary to enhance attractiveness and/or value prior to commencing the sales process. Opportunities to enhance earnings should be implemented — buyers are unlikely to pay for the things you say can be done.

This may include ensuring a competent management team is in situ. Sellermanaged businesses are viewed as significantly risky. Potential buyers will view a professional management team which will be retained by the business as a valuable or essential asset. Act now to put this in place. It may take several ‘trials’ before the real management gem is unearthed.

Next, prepare financial projections and business plans which are of primary interest to buyers. Wellprepared, credible business plans can reflect well on the management team and provide comfort for potential purchasers. Opportunities or expectations for growth can be attractive and should be credibly substantiated within your projections and plan.

Undertake necessary housekeeping to ensure your financial and other company records are up to date. Potential purchasers will undertake a thorough due diligence process.

Conduct a business valuation to assist in negotiations but to also ensure your expectations are realistic.

Negotiations can be prolonged — consider your essential deal requirements at an early stage. Tax planning is essential to ensure that you maximise the amount you receive from the sale. Lastly, you should engage a professional advisory team at an early stage to assist with the process.

MMcA

John McGuckian Director Tughans

Michael McAllister Director of ASM Chartered Accountants

Kay Collins Partner, audit and accounting Goldblatt McGuigan

Sound advice can be a valuable commodity We put your questions to the experts with the answers I run a small to medium-sized business but, although I have a computer accounting package, I obtain very limited management information as to how my business is performing on a regular basis. What accounting information should I be receiving regularly to properly manage my business?’

I

N ADDITION to all the external information available these days, sometimes business owners overlook useful internal management information available from their computer accounting package.

If the accounting package is used properly, the system can generate good management information and provide financial key performance indicators.

However, success in extracting useful management information from computer accounting packages is down to investing in ensuring that the accounting package is properly set up to reflect the activities of the business. Some thought also needs to go into the format and nature of management reports that the system can generate.

Business owners should involve their accountant in assisting with the initial set up.

Every business is different, but as the owner you can determine the level of detail and the frequency of reporting which best suits you and your business.

A few key points to consider for management reports are: ■ Inclusion of budgets prepared for the year ahead and prior years’ figures so as to provide a basis for comparison of current results achieved.

■ Production on a monthly basis, available as soon as practicable after month end.

■ Inclusion of a balance sheet

I have been asked to become a director of a company — should I be worried and what duties are imposed on me?

THERE has been quite a lot of coverage of directors’ duties having been set out in legislation (Companies Act 2006), but there has not been a significant body of case law which has become available to give guidance on how these duties are enforced.

In summary the law says that as a director you must: ■ Attempt to make the company a success, using your skills, experience and judgment.

■ Follow the company’s rules, as set out in its articles of association.

■ Make decisions for the benefit of the company, not yourself.

■ Inform other shareholders where you might personally benefit from a transaction the company makes.

■ Retain company records reporting changes to Companies House and HMRC. ■ Make sure the company’s accounts are a ‘true and fair view’ of the business’ finances.

Other people can manage some of these matters. For example, an accountant can manage the accounts — but you are still legally responsible for them. The duties should not concern a director who is mindful of them, acting in the best interests of the company. Therefore, while it may appear a daunting prospect the benefits of being able to direct the company should outweigh any fear about the imposition and/or enforcement of these duties.

JM and a profit and loss account, showing the results achieved for the month and year to date (depending on set-up, the system is capable of providing more detailed analysis, eg sales and profitability by customer/ product, direct costs, overheads and variances).

■ Details of cash and bank position and details of projected cash flows for the business, so any cash flow pressures are identified early and managed.

A report identifying money

owing by customers (monthly debtors listing) is a useful tool.

Also, a report identifying amounts owed to suppliers (monthly creditors listing) is helpful in detailing future cash outflows.

As a business owner it is important to set aside time on a regular basis to review the management information and interpret results achieved. This will allow you to focus on the areas which require attention.

KC

All questions should be addressed to: experts@businessmonth.co.uk Questions and advice are published in good faith but should not replace the advice of your professional financial advisor.

30 BUSINESS MONTH 2 June 2014

INSIDE REPORT

ECONOMIC RECOVER OR POSTCODE LOTTER With Northern Ireland divided into employment hotspots and blackspots, Paul Gosling considers the possible solutions to a difficult dilemma which threatens to create a two-tier recovery

N

ORTHERN Ireland is experiencing a new division — but this is not a division based on religion. Instead the new division separates the parts that are benefiting from the early stages of economic recovery from those that are not. Examination of the most recent employment statistics are instructive.

Over the past year there has been a substantial improvement in the unemployment situation in much of Northern Ireland. Unemployment rates have fallen by 20% or more In Carrickfergus, Banbridge and Larne — all parts of the East of Northern Ireland with comparatively low levels of poverty. It has also fallen by 20% on the north coast in Coleraine — but this trend may be reversed as the impact is felt of the job losses from the Driver and Vehicle Agency.

Elsewhere, though, the situation is very different. Across Northern Ireland as a whole, the fall in the number of claimants of unemploymentrelated benefits was 12.8% — compared to a fall of 26.4% across the UK. In Belfast, unemployment has fallen by 10%, with the city remaining one of the highest areas of unemployment in Northern Ireland.

Elsewhere the situation is significantly worse. While Antrim, Castlereagh, Banbridge and North Down all have claimant count rates of 3%, the UK’s highest level of claimant

32 BUSINESS MONTH 2 June 2014

count unemployment is in Londonderry at 8.3% — the only rate above 8% in the whole of the UK. Over the last year, despite City of Culture designation, claimant count unemployment fell by a mere 1.4% in Derry. In next door Strabane, it dropped by just 0.4%.

Nor are the signs good that there will be a turnaround.

There has been a surge in job announcements in recent weeks that will do much to bring down unemployment.

The good news has included 1,000 jobs at Concentrix in Belfast, 486 at accountancy firm EY in Belfast, 400 at Capita at Newtownabbey, 333 at Convergys in Derry, 130 with Wrightbus in Ballymena and 100 with Delta in Belfast.

In total there have been 2,831 jobs announced in just two months with the support of Invest NI. But it is significant to note where those jobs are located. Some 85% are in a ‘golden circle’ based on Greater Belfast, Antrim and Ballymena.

This is very substantially greater than the area’s share of population.

There are strong grounds for believing that even in Belfast, many of the jobs are being taken by people from outside the city. Unemployment is falling by a higher rate in the city’s commuter territory than in the most deprived areas of the city. Moreover, official figures for economic activity in the south of Belfast show it to be one of the most financially

productive areas in the UK — which is clearly at odds with incomes in the area. This suggests that much of the benefit is derived from commuters, rather than those who live in the area.

Figures published earlier this year by the New Policy Institute for the Joseph Rowntree Foundation demonstrate two trends.

Northern Ireland has suffered much more than the rest of the UK in terms of loss of income during the recession, with the least well-off households losing disproportionately.

Average incomes in Northern Ireland between 2006/7 and 2012/13 fell by 7% in the UK, but by 10% in Northern Ireland, according to the Rowntree report. More starkly, among the poorest 20%, incomes dropped by just over 4% in the UK as a whole, but by 16% in Northern Ireland. The disparity between Northern Ireland and Great Britain narrowed significantly higher up the income scale. There is also a noticeable geographic split, according to the report’s authors. “Within NI, the proportion of people living in poverty is highest in Belfast, followed by the west and then the east,” they note.

Part of the explanation for the contrasting economic fortunes across Northern Ireland is the differing nature of economic activity, suggests Richard Ramsey, chief economist at Ulster Bank.

“One of the reasons is in the West and Mid-Ulster the higher concentration of construction

employment, which has been hit hardest in terms of the housing downturn,” explains Ramsey. “Similarly in terms of capital investment cuts.

“Lots more areas to the west of the Bann would have benefited from the Celtic Tiger property boom than elsewhere. Lots of people were working in the construction industry in the South, while working in the North.”

RY RY?

Peter Bunting, assistant general secretary of the Irish Congress of Trade Unions, is scathing on the growing divisions in Northern Ireland and the impact on areas at a distance from Belfast.

“To me it’s where Invest NI should be targeting the jobs,” he argues. “At one stage they were targeting social need. Investors should be encouraged to invest, but they should do so

in areas where there is greatest social need.

“The jobs should not all gravitate to Belfast, or south Belfast.

You are going to have serious economic problems if you can’t get any decent jobs outside of Belfast. This is the issue with welfare reform — people are being forced to get jobs, but there are no jobs. And because of the political impasse we have lost jobs that would have been

created at the Maze development and the Warrenpoint bridge.”

But Esmond Birnie, chief economist with PwC, takes a different view. “How new is this?” he asks. “Maybe this is a reversion to older patterns. A lot of this is reflecting — in particular for inward investors — the importance of clusters.

There are advantages in being in an area close to a fairly large

urban, or semi-urban, area, with a large labour market, skills, university research, airports, high-speed internet connectivity and so on. Some of that is new, but some of that is old economics as well.

“That the Belfast metropolitan area is doing well compared to the rest of Northern Ireland doesn’t really surprise me. I

>> Turn to page 34 2 June 2014 BUSINESS MONTH 33

INSIDE REPORT >> From page 33 think on balance it is better to try to improve the connectivity, transport and infrastructure to the rest of the province, rather than subsidise jobs directly in those other areas. The evidence is that if you try to do the latter, the jobs don’t stay.

“If you improve infrastructure, in particular the roads, you are probably encouraging more commuting. Now is that good or bad? That all depends on where you compare us to. People in Northern Ireland will feel they will engage in a huge commute.

But by North American terms, these are small distances. And some commuting can be by public transport. I would say that is the way to handle it. Bringing jobs to people is very expensive and doesn’t really work in the long term.”

This is a debate likely to grow in the coming years if the latest trends continue. And there are two fundamental challenges to overcome if Northern Ireland is to avoid exacerbating divisions.

Unless there is greater investment in infrastructure connecting east and west areas of Northern Ireland, it is probably inevitable that most new jobs

34 BUSINESS MONTH 2 June 2014

will go to the east, to be filled by people living in the east.

But even within the east, it is

evident that those new jobs benefit people living in the most affluent areas, rather than

those living in the poorer ones.

The solution to that will have to be based on raising skills. With-

TICKERS

The month’s local indicators at a glance Ulster Bank economist Richard Ramsey gives a rundown on the latest key pointers ACCORDING to DFP’s Northern Ireland Residential Property Price Index (RPPI), property prices posted a quarterly rise of 3% in Q1 2014 and were 7% above their corresponding level in Q1 2013. This represents the biggest quarterly increase since Q3 2007 and the third successive quarter of year-on-year growth.

Three of the five broad NUTS areas within NI recorded a quarterly rise in Q1 2014.

The North of NI (Ballymoney, Coleraine, Derry, Limavady, Moyle and Strabane LGDs) and Belfast both posted 2% declines in their standardised residential property prices in Q1 2014.

The west and south of NI (Armagh, Cookstown, Dungannon, and South Tyrone, Fermanagh, Magherafelt, Newry and Mourne LGDs) recorded a rise of 2% q/q.

Meanwhile outer Belfast (Carrickfergus, Castlereagh, Lisburn, Newtownabbey and North Down LGDs) and the East of NI (Antrim, Ards, Ballymen, Banbridge, Craigavon, Down and Larne LGDs) each reported increases of 5% q/q.

These two areas also reported the largest year-on-year increases at 10%.

Following the latest figures, NI’s standardised residential prices (£102,034) are still 52.5% below the Q3 2007 peak. The Republic of Ireland’s (RoI) residential property price index (RPPI) decreased by 1.3% q/q in Q1 2014. However, prices in the

latest quarter were still 7.8% higher that the corresponding quarter a year ago. Despite this growth, prices in the RoI remain 47% below their Q3 2007 peak.

Meanwhile Dublin residential property prices fell by 1.9% q/q in Q1 2014 but are still some 13.7% higher over the year.

Despite this recent growth,

Dublin prices are 50% below their pre-downturn peak and 33% below the corresponding level in Q1 2005. For comparison, NI and Belfast house prices are 6% and 10% below Q1 2005 levels. Unlike the NI and RoI, UK residential property prices are now higher (+4.5%) relative to their prerecession peak (Q4 2007).

THE NEW NI Residential Property Price Index (RPPI) provides the best measure of housing transactions of all the local house price surveys. In Q1 2014 there were 4,189 residential property transactions — a 21% increase relative to the corresponding 2013 quarter. Over the last four quarters (to Q1 2014) there were 17,416 residential transactions which is 85% above the low posted in the four quarters to Q2 2009. However, this

still remains 58% below the peak recorded over the four quarters to Q1 2007 (41,442). Given that 2006 was something of an abnormal peak in transactions, 2005 is a more useful gauge to benchmark activity. A return to this ‘freak peak’ is neither expected nor desired. Instead a return to more ‘normal’ levels of activity that we would have seen around 2005 (29,233) would be desirable. This is 40% above where transactions currently are.

LAST year saw 3,373 individual or personal insolvencies in Northern Ireland. This represented a record high and was more than 150% (2,036) higher than the level in 2007. In the latest quarter (Q1 2014), 840 individuals were either declared bankrupt (or chose bankruptcy) or entered into either an individual voluntary arrangement (IVA) or a debt relief order (DRO).

This represented a fall of 9% relative to the record quarterly

high of 926 in Q4 2013. Nevertheless, the latest quarter was still marginally higher (+0.5%) than the corresponding quarter last year (836). As a result, the number of NI’s insolvencies over the latest 4 quarter period (to Q1 2014) represents a fresh record high of 3,377. Meanwhile corporate insolvencies, either compulsory liquidations or creditors’ voluntary liquidations, increased by 4% q/q in the latest quarter.

36 BUSINESS MONTH 2 June 2014

BUSINESSPEOPLE

The Northern Ireland Businessperson who...

... helped Jurassic Park win an Oscar There are few people better qualified than John Knapton, the new head of the NISP Connect Springboard Programme, to hand out the ‘tough love’ start-up firms need

H

E’S worked in sales and marketing all over the world, has won funding as a businessman and handed it out as a venture capitalist and was even part of the team that helped Jurassic Park win an Oscar.

So who better than John Knapton to hand out some much-needed tough love to SMEs, spin-outs and start-ups?

As the new head of the NISP CONNECT Springboard programme, a support scheme run through the Northern Ireland Science Park, John is now looking for new companies ready to take the next steps to success.

Originating in San Diego, Springboard is tailored to the individual needs of each start-up over an average 12-week period.

Accelerating success and reducing the go-to-market risks are important, but to do that Springboard will also ask those tough questions that can uncover the reality. With established entrepreneurs coaching their ‘proteges’ that if an idea doesn’t work, it’s important to learn the lesson and start again with a fresh perspective.

It is well documented that the average start-up success rate is 10%. Springboard graduates can boast 65% success in terms of business survivability, job creation and funding goals, all because the ‘tough love’ roots out the dubious, nurtures the real opportunity and helps to develop a more robust commercialisation plan. It means that graduates deemed ‘investor ready’ who go forward and pitch for funding, are well prepared for any pitfalls.

At the moment there are over 20 applications in the Springboard pipeline and there are currently nine companies engaged in the scheme. The

most recent, successful graduates include renewable energy firm Puremarine, based in the Northern Ireland Science Park.

John said that, while he graduated with a degree in electrical engineering, he ended up working in sales and marketing. “I’ve lived and worked in the US and Asia and I am pleased to say I have been involved with two of Northern Ireland’s biggest success stories, which were both Northern Ireland university spin-outs.”

John was one of the original employees of Audio Processing Technology, which developed the algorithm chosen by Digital Theater Systems (DTS) for their cinema audio playback system, now used in almost every movie house and DVD player in the world. The system premiered with Steven Spielberg's Jurassic Park — which won an Academy Award and a BAFTA in 1994 for Best Sound.

Then there was Andor, the Belfast-based digital camera company, one of Northern Ireland’s very few Plcs. The firm was recently sold to Oxford Instruments for £176m.

John also worked for Roper Industries, a US Fortune 250 company, before coming home to do consultancy work in global business development, and joining Crescent Capital, the investment company, which

funded the likes of Andor and APT. With that sort of business background, it’s hard to think of anyone more qualified to help new firms find their feet.

“Springboard is a free programme, specifically designed and proven to help companies of all ilks, which are ready to grow rapidly, prove and refine their commercialisation plans, manage change and make the difference”, he said.

“Northern Ireland is great at producing ideas; we punch well above our weight in that respect.

Springboard is there to offer that extra bit of help in turning those brilliant ideas into sound commercial successes.

“At NISP CONNECT, we’re now looking to bring Springboard to the next level and make it the Science Park’s flagship as we know that those ideas are out there and we want people to come in to the Science Park and talk to us.

“Each company is matched with one of our team of Entrepreneurs in Residence (EIRs), who are all experienced in starting, running and selling their own businesses, and who all work with the entrepreneurs on a voluntary basis.

“At the end of the period, the companies face a panel of experts, who

provide feedback, which the participants then act on. This process and the expert feedback significantly reduces potentially expensive or fatal mistakes.

“With the strength of a truly global Springboard network of business advisors and domain experts, as we call them in the programme, we also help the participants understand the cultural and business differences in doing business outside of the locality, for example, in the USA, Europe and Asia. Just because we may speak the same language, doesn’t mean business is the same.

“To realise the full potential of many of our participants, the ability to export their product is going to be essential.”

With that in mind, what does John thinks that today’s funders are looking for?

“That’s pretty universal”, he said, “Identification of a real market opportunity, a product that succinctly addresses real need in that market and the strength of the team to deliver.

“The ‘me too’ products and those that just compete on price are tough sells. Because of the experience of the industry experts and EIRs, there is huge market knowledge and if a product already exists or it has been tried before, we can generally catch it before a company goes in front of funders. Sometimes all that a product needs is a different marketing frame to make the difference between success and failure, and some good sales people, of course.”

With Springboard programmes now developing a collaborative approach up all over the world, John Knapton said he is excited about future opportunities for Northern Ireland’s, high growth potential companies ready to step on to the global stage.

2 June 2014 BUSINESS MONTH 37

FOCUS ON DAIRY FARMING

EXPORTS FOR Northern Ireland dairies are reaping the benefits of a growing demand for milk powder and butter in developing countries across the globe, reports Clare Weir

F

OR a region so well known for being green, it’s no surprise that Northern Ireland’s dairy industry is considered the cream of our farming crop.

While trouble at the historic Fivemiletown Creamery Co-operative hit the headlines in April — although fortunately there has been a happy ending for part of the business — other companies in the sector are bullish about the future, with the dairy industry here said to have grown by 50% in the past 15 years.

One of the major players is Fane Valley Dairies in Banbridge, part of Fane Valley Co-Operative in Armagh, Northern Ireland’s biggest co-operative.

Formed in 1903, Fane Valley is owned by 1,800 local farmers and employs more than 2,000 people at sites in Northern Ireland, the Republic of Ireland, England and Belgium.

It has experienced a significant growth in business, especially for milk powders in developing markets in Asia, North Africa and South America.

During the past financial year the company secured export sales for its powders and butters worth £40m, including the sale of butter to retailers in fast-growing markets in the Gulf, including Saudi Arabia.

It now has a substantial milk pool in excess of 150m litres to enable it to develop products to meet global demand. It currently exports to 25 countries.

Fane Valley Group CEO Trevor Lockhart said that the company has developed a global reputation as a supplier of quality products based on provenance and traceability.

38 BUSINESS MONTH 2 June 2014

SAY CHEESE! ■ In April, more than 80% of the shareholders of the Fivemiletown Co-operative, which was formed in 1898, agreed to sell their 25 million-litre-ayear milk supply and cheese brands to Kilkenny-based Glanbia Ingredients Ireland Ltd (Gill). Staff entered into a 30-day consultation process with the companyto negotiate redundancy packages. As a result of the sale, international brands such as Ballybrie, Ballyblue and Ballyoak transferred to Gill. Dale Farm — part of United Dairy Farmers — last month announced it is buying the soft cheese brands from Gill, though cheddar production at Fivemiletown will cease.

■ Fivemiletown’s branded cheeses are listed by Harrods, Harvey Nichols, Sainsbury’s, Tesco, Asda, Ocado and Morrisons as well as more than 2,000 delis across the UK. ■ British Airways and Emirates Airline served Fivemiletown cheese to first-class passengers, while world leaders attending last year’s G8 Summit at Lough Erne Resort enjoyed the products.

“We are now seeing the evidence of the expected rise in demand for quality dairy products driven by population growth, rising incomes and an associated change in dietary intentions especially within the rapidly rising middle class in China and Asia,” he said.

“Our ability to provide assurances

around the integrity of our supply chains, including product safety and traceability, are key elements.

“The development of our own direct supply milk pool and a programme of ongoing investment in the quality and functionality of our products have been particularly important in underpinning these credentials with customers which has in turn enabled us to win more business.”

Meanwhile, Dale Farm — purchaser of the Fivemiletown soft cheese brands — is part of United Dairy Farmers, Northern Ireland’s biggest dairy business.

David Dobbin, Dale Farm's group chief executive, said that the long-term prospects for dairy are excellent. The firm has just enjoyed a record year.

“We have a huge natural resource — our weather — and the fact that 95% of our farmlands are grass means that we can produce quality fresh butter, milk and cheese all year round.

“Because of our climate and our pedigree in the dairy sector — we have less industry, we have less pollution and a cleaner environment for livestock — we produce more milk than Scotland and Wales put together. Dale Farm alone produces more milk than Scotland.

“I think one of our strengths is that Northern Ireland is made up of lots of small family farms. In America for example everything is corporate and produced on a mass scale, here there is more personal pride in products and we have a reputation for quality.

“The reality is that we have to export 80% of what we produce here — we have just 1.8 million people in Northern Ireland

Turn to page 40 >>

THE MILKING

2 June 2014 BUSINESS MONTH 39

FOCUS ON: DAIRY FARMING From page 39 >> and we have two billion litres of milk output — that’s 1,000 litres per person.

“While we’re one of the UK's largest dairy exporters, we’re also a leading supplier of consumer products in Northern Ireland and we’ve invested over £40m in expanding our cheese, butter and fresh milk production.

“We’re starting to move away from the export of milk powders due to volatile commodity prices and the strengthening pound and the fact that we believe this market is due to overheat due to over supply.”

Another big name is Ballyrashane Creamery in Coleraine, one of Northern Ireland’s largest butter producers, processing 100 million litres of milk annually and supplying to Asda, Marks & Spencer, Tesco and Sainsbury’s.

The company has just completed building one of the most modern butter processing plants in Europe in an £8m investment and is experiencing significant growth in Germany and Belgium.

Employing 150 people and contributing around £3.5m per annum to the economy in salaries, it is also the only dairy company with its own anaerobic digester to turn waste into energy.

In 1940 it was the first automatic butter packer in Northern Ireland, in 1956 it

40 BUSINESS MONTH 2 June 2014

became the first dairy to collect bulk milk in Ireland and in 2010 was the first dairy in UK to introduce soft-butter technology.

As well as the purchase of the Fivemiletown soft cheeses by Dale Farm, there are also some interesting developments in the artisan cheese sector.

Leggygowan Farm in Saintfield has developed Ireland’s first blue goat’s cheese and

Dart Mountain Cheese in Maghera has developed Sperrin Blue, a blue cow’s milk cheese. Mike’s Fancy Cheese in Newtownards has just introduced Young Buck, a blue stilton-type cheese, on the back of a crowdfunding project launched by Mike Thompson. The product is now selling in the London area as well as several popular Northern Ireland restaurants including James Street South.

FOCUS ON LEGAL SECTOR

THE LAW OF ATTRACTION Hundreds of jobs are being created as global players in the legal profession set up offices in Northern Ireland, attracted as Simon Rowe discovers, by the pool of talented graduates, highly competitive costs and support from Invest NI

T

HE legal industry in Northern Ireland is booming. In the face of a global economic downturn, the sector’s gravitydefying feats would make even Spiderman envious. At a time when most other industries have been contracting and shedding staff, international law firms have been opening new offices here and hiring graduates.

In the past five years alone, 650 jobs have been created across 16 separate law firms with a total Invest NI spend of £5.5m, the economic development agency said.

In its drive to make Belfast an international law capital to rival London or New York, Invest NI has proven to be astute at attracting a flood of legal firms keen to move their back-office jobs to less expensive locations.

Northern Ireland is ideally placed to offer a ‘near shore’ location where City law firms can make big savings. But the main attraction has been our well-qualified talent pool and ‘can-do’ business environment. Throw into the mix the fact that our universities are supplying the labour market with a surplus of around 600 graduates each year in law and legal studies and that 80% of paralegals have a law degree, and it’s clear there is massive room for growth.

Richard Palmer, president of the Law Society of Northern Ireland, said firms “have adjusted to the challenges, pressures and new opportunities presented by the economic downturn”. “For some this has meant a re-evaluation of the

42 BUSINESS MONTH 2 June 2014

types of services which they offer and how they respond to the needs and demands of clients,” he explained.

Having seen the collapse of the conveyancing market — the bread and butter of the profession — following the property crash and the rise in insurance firms offering out-of-court settlements to people injured in accidents to avoid legal fees, the sector reacted quickly to avoid an imminent jobs bloodbath.

Forging a partnership approach with Invest NI has enabled the Law Society to

Firms have had to adjust to the challenges, pressures and new opportunities that have arisen harness the growth potential of our local talent pool, said Mr Palmer. “We are working with governmental organisations such as Invest NI to increase the potential for local solicitor practices to secure an increased share of a growing global legal market. Investment is not only good for the legal sector but it is important for the overall growth and long-term future of the Northern Ireland economy. The investment by global legal

firms in locating their back-office work to Northern Ireland is a recognition of the highly qualified and professional legal workforce which is available in this jurisdiction.”

And the strategy is clearly working.

Law firm giant Herbert Smith Freehills set up here in 2011 and in three years has grown its headcount from 26 staff to 125. Although based in Northern Ireland, the firm does not conduct Northern Irish legal work. Its Belfast back-office hub focuses on reviewing and analysing large volumes of documents relating to arbitration, litigation and investigations.

The move by such a major player set a trend that shows no sign of slowing down.

International law firm Allen & Overy — part of the ‘Magic Circle’ of top five London-based law firms — followed suit, selecting Belfast out of 20 possible worldwide locations. In a further sign of confidence in the market, it also opted to make Ireland's tallest building, Belfast’s Obel, the new home for its legal services centre, IT, HR, finance and library. From here, Northern Ireland recruits provide legal and support services to the firm’s global network of 42 offices. Backed by £2.5m Invest NI funding, the headcount at Allen & Overy’s Belfast HQ stands at more than 300 and a further 20 law graduates will be hired this summer.

>> Turn to page 44

Allen & Overy: Jonathan Heggarty of Belfast Met with Niamh Donegan and James Reynolds

2 June 2014 BUSINESS MONTH 43

FOCUS ON LEGAL SECTOR From page 43>> For firms such as Allen & Overy the savings are considerable. London staff considering relocating to the firm’s ‘near shore’ centre reportedly faced pay cuts of 30-40% on current London salaries, depending on seniority. And real estate costs are around two-thirds cheaper in Belfast than London. Add in the ‘carrot’ of Invest NI aid and it’s clear why Belfast is a cashsaving Mecca for City firms.

International legal services firm Axiom hopped on the bandwagon too after securing a £1.6m regional investment deal. Invest NI pledged £1.1m while the Department of Employment and Learning promised an additional £500,000 for skills development under its Assured Skills programme.

And Londonderry is not being left out. US entertainment law firm SmithDehn is locating offices plans to create 75 jobs over the next five years.

Russell Smith, co-founder of SmithDehn, said “has a magic, it has a spirit, it has the X-factor that we are looking for, talent that is under-utilised and it is enthusiastic, dynamic”.

44 BUSINESS MONTH 2 June 2014

Big-name law firms getting NI Invest assistance

Brian Speers, CMG Solicitors; Richard Palmer, president of the Law Society of Northern Ireland; Lord Kerr; Lord Chief Justice Sir Declan Morgan; Justice Minister David Ford MLA; and Mark Stephens, chairman of the Commonwealth Law Association. The legal eagles were pictured at a recent international mediation conference in Belfast Within a short period, Northern Ireland has positioned itself as a serious global contender in the legal back-office relocation business. And the outlook appears bright for some time to come.

Mr Palmer admitted Northern Ireland’s traditional law firms found the going tough during the recession. “The economic downturn affected everyone in Northern Ireland including solicitors and their clients. For solicitors it was not

just the area of conveyancing which was affected by the stagnation of the property market — it also impacted on other traditional areas of solicitors’ work such as matrimonial matters and administration of estates.

“As the green shoots of recovery start to appear in our property market this in turn is having a knock-on effect on these other areas in which solicitors traditionally provide expert legal advice.”

Allen & Overy LLP Axiom Global Limited Caldwell & Robinson Carson McDowell Herbert Smith Freehills LLP International Mediation Services LLP Itouchenergy Limited James Boston & Sullivan Solicitors Justis Publishing Limited Lawscript (NI) Ltd Legal-Island Limited McKinty and Wright PIP Fire & Security Ltd Quaylane Limited Quigg Golden Limited William Devine •Invest NI has supported 16 firms in the legal sector in the past five years •Invest NI has offered nearly £5.5m of assistance to firms in the legal sector in the past five years •Invest NI support has promoted 649 in the legal sector in past five years

OFFLINE SECTION

MOTORING

OUT TO LUNCH

MAN ABOUT TOWN

Citreon Grand C4 Picasso

Owner of No Alibis book shop

Inside track on Northern Ireland business

ART IN MOTION

DAVID TORRENS

THE CHAIRMAN

WELCOME TO MIDDLE EARTH NEW NEW ZEALAND ZEALAND IS IS LORD LORD OF OF THE THE TRIPS TRIPS

2 June 2014 BUSINESS MONTH 45

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OUT TO LUNCH

David’s novel approach to retail success High-street outlets struggling to compete with the giants of the internet could do with taking a leaf out of the book of No Alibis’ David Torrens, says Joris Minne

B

OOKSELLER David Torrens is like a character from one of the many thrillers in which he specialises. He is self-effacing and quietly passionate about the role of bookshops in the improvement of the quality of life of the masses. He is also on a mission and plays a key role in the movement to resurrect south Belfast’s Botanic Avenue to its former position as the golden strip of the retail sector in the north.

The graduate, who studied history and Japanese, is a member of the South Belfast Partnership which has a regenerational remit. He is also owner of No Alibis bookstore and has friends in high places. Author John Banville has acknowledged his bookshop as a key influencer in his own reading habits and the Lord Mayor Mairtin O Muilleoir is a frequent visitor.

It’s unusual for a bookshop to enjoy as high a profile as No Alibis — a status achieved over the past 15 years by transforming the business into a cultural hub where authors and musicians read and perform their works.

“The battle for business is between the high street and the internet,” says Mr Torrens over lunch in the Knife & Fork restaurant in Malone Lodge.

He respects online retailers because they are unavoidable and he has chosen to compete with them by providing a service no internet outlet could possibly compete with.

46 BUSINESS MONTH 2 June 2014

“Technological innovation has a life and development of its own and you can’t influence it. That means you have to adapt your business to fit around it,” he says.

No Alibis opened shortly after Amazon was born and he explains that his approach to business has always operated in the light of this competitor. “It was never a surprise to me that the internet would be a tough adversary. Many publishers have been left shellshocked by it. But I was convinced that an on-street presence could compete successfully by becoming a local landmark and part of a community,” he says. “In this business you have to bring people into your space.”

Which explains how No Alibis has developed its character as a centre of activity at the heart of which are books. There are sofas and coffee and spending time in the shop is like therapy for many. He’s also brilliant at selling. Ask him the kind of thing you’re looking for, as I did two years ago before going on holiday, and you’ll walk out with a bag full of exactly the kind of thrillers, crime novels or period dramas you were after but never knew you needed.

David Torrens thinks in the long term too.

He has maintained close links with both Belfast’s universities and constantly monitors market trends. Fifteen years ago he was selling crime stories to twenty-somethings and he is now selling them children’s books for their growing families. Poetry and “selling what others don’t sell” has helped

No Alibis consolidate its position as the goto bookstore for the more rarefied titles.

He also understands the broader context and his role on the South Belfast Partnership board is to work with like-minded retailers to approach regeneration collectively.

“Events work,” he says. “Book readings and festivals mean working with partners such as the Crescent Arts Centre, the Ulster Museum and the universities.”

South Belfast traders face stiff competition and not just from the internet. The commercial centre of gravity of the city is moving towards the river and the Cathedral Quarter yet Lisburn Road, Botanic and Malone still retain the title for most desirable area to live. Let’s hope the big money spent on mortgages understands the need to support local traders. Because David Torrens has made the point very clearly that without trades like his, the quality of the area would diminish quickly.

Knife & Fork Restaurant Mussels x 2 Beef dish Salmon Chips Salad Glass wine Still water Total

£13.00 £10.00 £12.00 £2.75 £2.75 £4.95 £2.00 £47.45

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SHOP FRONT

Streetview No.35: Rhoda Stewart Interiors Ron McBride

T

HE cycle of growth, decay and renewal is all too easy to recognise in our provincial towns, no more so than in Ballynahinch, whose residents and shopkeepers have experienced a year of upheaval due to work involved in improving the ‘public realm’. Mirroring the renewal of the footpaths and market square is the refurbishment of one of its established shops, Rhoda Stewart Interiors. As is becoming all too common today, the town is blighted by a number of closed shops. Taking a leap of faith, the family-owned business has invested in a major refurbishment, boasting a modern shop front with stylishly designed windows and new signage.

The shop was opened over 40 years ago by Rhoda Stewart who has built up a reputation for fabrics, wallpapers and an interior design service with home visits. They are also suppliers of school uniforms and today, Rhoda oversees this aspect of

the business on the first floor.

In recent years the Gallery Cafe, seating around 50, has been opened. It has become popular for lunches and coffees in a part of the town with little competition. Customers browsing for wallpapers and textiles find it convenient to use while decision making.

Inside the shop the change has been dramatic and Rhoda’s son, Hugh, has plans to make further changes to the cafe.

Previously the shop had been less-ordered with a more random display, indeed the fabrics

and wallpaper section seemed to be dominant with attendant piles of books and rolls of curtain fabric. Established brands such as Zoffany, Ralph Lauren, Sanderson, Harlequin and Osborne & Little (yes, Osborne) are available. Entering the shop is confusing for a moment: it is like walking into someone’s bedroom, as if you have taken the wrong door. Walk on, however, and the setting changes. Furnished rooms are laid out, each with high-quality furniture, tasteful curtains, wallpaper and accessories. Walking on through,

the main body of this linear-designed shop has an opulent look with its dark wooden floor and a sense of depth. Again the quality of furniture is high and at the back of the shop an ordered system of shelves with Ralph Lauren signage highlights the new look.

It is here that the fabrics and wallpaper books can be inspected. The furniture is dominated by the Halo brand, Stewart being the only Northern Ireland supplier. Customers can browse the considerable stock of Halo sofas, chairs and tables or order from the company’s online brochure. A well-ordered, medium-sized gift department links the furniture department and cafe.

Rhoda Stewart Interiors deserve a visit if only for upgrading in a time of economic difficulty. For newcomers, it could be an interesting lunch or coffee.

Rhoda Stewart Interiors 26 High Street Ballynahinch BT24 8AB 02897562755

2 June 2014 BUSINESS MONTH 47

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DAY IN THE LIFE

Meet the man who is sure to put a smile on your face David Nelson Clinical director of Cranmore Excellence in

Dentistry, Belfast, with his area of practice dedicated to dental implant treatment

7am:

I begin with reviewing my schedule for the day ahead. I find this to be a particularly productive time for me.

8am:

I often start seeing my patients from this time which I believe can be quite convenient for those patients heading onwards to work. Dental implant treatment can involve a number of visits for completion of treatment. As a result, I provide late evening and Saturday appointments to facilitate those who have commitments during the day.

We also offer ‘teeth in a day’, a revolutionary treatment, where I place the dental implants and fit the provisional restoration in one appointment.

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9am:

My day-to-day list includes a combination of implant assessments, review appointments, implant placement and restoration appointments. I enjoy the variety of surgery that dental implant treatment allows me to do, combined with the interaction with patients. People present a range of motivating factors and at Cranmore understanding this is key to us delivering the best end result.

1pm:

While I break for lunch, our practice phone lines remain open for patients to contact us at a time convenient for them.

During lunch I often have calls with my referring dentists,

patients and my dental technician to progress cases.

2pm: We resume for a further combination of surgery and reviews. Treatment planning is a pivotal part of dental implant surgery and this involves engaged two-way discussions with my patients to fully explain the options available so that they may make an informed decision.

A considerable amount of time is spent at this important planning stage, where we discuss any concerns and answer all questions.

We are one of only a few dental practices in Northern Ireland to have an on-site cone beam CT scanner which allows

us to create a 3D digital image of the patients jaw to accurately plan treatment. Having the scanner onsite ensures we can deliver a complete implant treatment service for our patients.

5pm: When my clinical day finishes, I often spend time preparing lectures as part of my commitment to education, where I teach on dental implants at both an undergraduate and postgraduate level.

Dental technology and research are continually evolving for the benefit of patients and as a result I consider this to be an exciting time to be involved in the field of implant dentistry.

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Debate on widespread changes to DVLA rules TRADE title Fleet News and ACFO, the national body for fleet decision-makers, will be hosting a debate at this year’s Fleet News Company Car in Action event to provide some clarity around changes planned by the Driver and Vehicle Licence Agency (DVLA). An agency of the Department for Transport, the DVLA is responsible for a host of services, from the issuing of licences to the collection of vehicle excise duty.

It is undergoing the biggest reorganisation in its 40-year history, with the closure of 39 regional offices, a range of services moving online and the abolition of the tax disc. Also, the regulation requiring drivers with a credit card-sized photo driving licence to hold a paper counterpart will be removed.

Art of smiling as Jaguar F-type is immortalised THE Jaguar F-type coupe has been immortalised on canvas by one of the world’s leading automotive artists, Tim Layzell.

Speaking at the unveiling, Ian

Callum, Jaguar’s director of design, said: “As a design team, it’s paramount we create Jaguars that make people smile.

As Tim’s art also makes me smile, asking him to produce a painting to commemorate the launch of F-type coupe was a natural fit — and the resulting work is very special indeed.”

Audi R8’s LMX is sure to light up your life A NEW limited edition LMX version of the Audi R8 will not only be the most powerful roadgoing iteration of the super sports car ever made, but will also be notable as the first production car to adopt laser high beam lighting as standard. The new 570PS, 198mph R8 LMX is priced from £160,000 OTR.

Merger creates new Ford training centre FORD is creating a new, stateof-the-art training facility on its existing site in Daventry, Northamptonshire, as part of a multimillion-pound investment. The new site will merge the capabilities of two existing Ford colleges — the Technical

Training Centre located separately at Daventry, and the Henry Ford College in Loughborough, which provides training for technicians, sales staff and management throughout Ford’s national dealer network.

Scheduled to open next year, the new facility will be an extension to the existing 150,000sq m parts distribution centre (PDC) on the Daventry site. It will deliver courses to adult learners up to diploma and masters degree level, as well as students taking the Ford masters apprenticeship programmes.

Renault chairman Ghosn to lead ACEA CARLOS Ghosn, chairman and chief executive of Renault, has been elected as president of the European Automobile Manufacturers' Association (ACEA).

He takes over from Philippe Varin, former chairman of the board of management of PSA Peugeot Citroen.

ACEA secretary general Erik Jonnaert said: “Mr Ghosn will lead ACEA through an important period of political transition in Europe. Under his presidency, ACEA will continue

MOTORING NEWS

to focus on its key policy recommendations, which are to drive innovation, to foster growth through international trade and to call for a supportive regulatory framework.”

Volkswagen car sales break quarterly record CLOSE on two million Volkswagen cars were delivered for the first time in the first four months of a year, representing an increase of 4.6%.

“On the one hand that is due to good sales developments in China and Europe, and on the other it is attributable to sustained high demand for products such as the Golf,” said Christian Klingler, group director of sales and marketing.

The brand recorded a 16.2% increase in deliveries in the Asia-Pacific region in the first quarter of 2014, handing over 993,400 vehicles. In China, 921,400 models were delivered during the same period.

Volkswagen in North America delivered 182,700 vehicles, while in the South America region, deliveries from January to April declined to 183,900, down 21.8%.

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MOTORING

GRAND DESIGN Economical, stylish and with seven seats – what’s not to like, asks Jim McCauley

C

ITROEN has sought to extend the appeal of its C4 Picasso with a seven-seater Grand Picasso variant, built on an all-new modular floorplan. Styling-wise, the new model retains the sleek front end of the five-seater model with the central chevron badge extended outwards to meet the slim flasher units which sit above the headlights at the extreme edge of the car. Behind this, the practicality of the cavernous cabin sees a more restrained interpretation than in the smaller model with the visual focus on the highlighted trim rising through the A-posts to scribe the side glass area.

The new platform has allowed engineers to extend the wheelbase to the largest in its sector at 2.84 metres with resulting benefits in achieving classleading passenger space and luggage storage. But the platform is also lighter with its combination of steel, aluminium and composites saving a total of 60kg in a vehicle that overall weighs over 100kg less than its predecessor.

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With a choice of petrol and diesel engines as well as transmissions, test choice was the e-HDi 1.6 litre diesel with 115bhp on tap. Driving through its standard six-speed manual gearbox, it returns a 0-62mph time of 12.1 seconds with a potential top speed of 117mph.

On road, and the Grand C4 Picasso quickly asserts its superiority over the competition. A healthy 270Nm of torque from just 1750rpm provides excellent mid-range response, with the manual gearbox stepping neatly through the gears. Despite the larger frame of the vehicle it maintains its poise through corners yet provides a cushioned ride for all the occupants.

The weighting of the controls is well matched, with the steering providing confident feel as do the excellent brakes. In all, the vehicle responds more like a well sorted saloon than an MPV, providing the driving enjoyment that few larger people carriers can achieve. For

the driver, the front cabin presents an exceptionally neat dash layout with minimal switchgear, thanks to the call-up systems menu on the lower central touch-screen. Above this a clear digital screen presents the standard instrumentation with the speedometer reading given in both analogue and digital form. Forward vision is not only aided by the semi-elevated driving position but also by the wishbone A-posts that split the normally single post into two slimmer units with much less obstruction at junctions.

But an MPV is more than about the driver with the need to carry seven occupants comfortably and in reasonable space. And here the Grand Picasso exceeds expectations not only in terms of space but in the ‘Exclusive' trim of the test vehicle in excellent comfort. Mid-row passengers have three individual seats which can be slid fore and aft with backrest adjustment while

their fold and tip facility along with their excellent positioning in relation to the doors makes access easy to the rear pair of seats, which conveniently fold into a flat floor for an extended luggage space when not in use.

Mid-row passengers also have the benefit of separate air controls and flip-up trays on the backs of the front seats, while superbrite LEDs provide excellent cabin lighting at night.

Overall, the Grand C4 Picasso advances Citroen's hold on the seven-seater market with a well presented design that scores on engineering quality and high level appointments.

And performance is not at the expense of economy as might be expected in a vehicle of this size with the 1.6 litre turbo-diesel returning a very commendable 50mpg over several hundred miles in mixed driving conditions on Northern Ireland's roads.

In ‘Exclusive' trim, the Grand C4 Picasso is comprehensively equipped including electronic stability control with traction control, auto electric handbrake with hill start assist, dual zone air conditioning, reversing camera, satellite navigation with seven-inch full-colour touch screen and Bluetooth connectivity.

Citreon Grand C4 Picasso Engine: 1.6 litre turbo-diesel; 115bhp at 3,600rpm; 270Nm of torque at 1,750rpm Drive: Via six-speed manual gearbox to front wheels Performance: 0-62mph (100km/h) in 12.1 seconds; max, 117mph (187km/h) Fuel on combined cycle: 70.6mpg (4.0 l/100km) CO2: 105gms/km; VED Band B for zero road tax in year one and £20 per annum thereafter Trim: Exclusive Price: £23,255 Insurance: ABI Group 18E Warranty: Three years/60,000 miles Benefit-in-Kind: 16% Euro NCAP: Five-star Available extras: Metallic paint, £520; 3-D rear lights, £250; space saver spare wheel, £75; park assist system, £600

2 June 2014 BUSINESS MONTH 51

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TECHNOLOGY MiTime app, free @ iTunes App Store If you’re a regular traveller in England and plan your morning journey with military precision, how annoyed are you when your train is late thanks to something on the track? Wouldn’t it be great if you were made aware if something had gone awry on the rail network before you left? That’s what this phone app aims to do, by intelligently adjusting your alarm and waking you up earlier if the trains are down. The service works by asking you how long you need to get ready as well as where you need to go, then polls data services including Network Rail, the Highways Agency and TfL (Transport for London). If it looks like you need to set off earlier, it’ll take the liberty of waking you up ahead of schedule, so (in theory) you’ll never miss that all-important meeting.

LeapFrog LeapBand, £29.99 www.leapfrog.co.uk If you want to get your children out and about this summer, this is the perfect wearable to keep them active as well as entertained. The LeapBand fitness tracker logs steps and the more active they are, the more points they earn to spend on the Tamagotchi-style virtual pet that lives on the tracker, as well as unlocking mini games and virtual rewards. High-tech features include a built-in accelerometer, high-resolution colour screen, rechargeable battery and water-resistant design.

Children can choose from eight different pets and 50 different games and four colours — green, pink, blue and orange.

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Audi R8 LMX Supercar, from £160,000 @ www.audi.co.uk This new limited edition LMX version of the Audi R8 will not only be the most powerful road-going iteration of the super sports car ever made, but will also be notable as the first production car to adopt laser high-beam lighting as standard. No, they aren’t James Bond-style death rays, rather the laserlight headlights combine blue laser beams run through a phosphor converter with matrix LEDs to illuminate the road up to 500m ahead of the car — delivering twice the luminosity of standard LED headlights.

The engine’s output has been bumped up to 562bhp — 20 more horses than the standard R8 V10. It’ll get you from 0-62mph acceleration in 3.4 seconds and has a top speed of 198mph; that’s 0.1 seconds and 1mph faster than the R8.

There will only be 99 vehicles made, so if you aren’t put off by the hefty price tag, you better get in quick!

Skylock, approximately £150 @www.skyloc.cc If you’ve been inspired by the Giro d’Italia to get out on the bike, this nifty lock should keep it safe when out on the road.

Skylock is a one-of-a-kind connected device that is based on a proprietary dual-locking design — making it twice as safe as a traditional U-lock. In addition to robust mechanics, a theft alert system sends a message to your phone when someone touches your lock for an extended period. Combined, these features make Skylock a formidable foe to any would-be thief, giving users more time to respond to any thefts in progress. Alerts are sent via bluetooth or via wi-fi, the first time either communication methods are available in one device. Using Bluetooth lowenergy, wi-fi, and an accelerometer, Skylock pairs itself with a smartphone to be contextually aware.

GMcG

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Daddy Cool

FASHION

Watch ,£139 @ Rotary

Grainne McGarvey

A

S IT is Father’s Day on June 15, treat your dad to a gift more interesting than a triple pack of socks. Granted it can be hard to choose something that combines functionality and style, but there are a few key trends that will look dapper without going over the top.

Combining T-shirts with blazers and either dressy jeans or chinos is a good option that looks good without making your dad feel like he’s still in office wear. Pattern shirts are big this season as are tailored shorts, so it’s time to get the legs out if the weather improves.

Document holder, £129 @ Ted Baker Collection boots, £75 @ M&S Striped T-shirt, £14.99 @ New Look

Navy suit jacket, £80 @ Next

Textured cobalt jumper, £89 @ Reiss

Lighthouse straight-fit chinos, £39.95 @ Lands’ End

Cardigan, £495 @ www.muriee.com

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TRAVEL

PEAK OF CYCLING Use two wheels to appreciate New Zealand’s stunning scenery, then add a spark of electricity — or a helicopter — for a different high, suggests Christoper Wakling

T

HE secret to backflipping your bicycle over a 72ft canyon is to do it slowly. You need enough speed on the ramp, but pull back too quickly, as you would for a normal 30ft back-flip (still with me?), and you'll over-rotate.

You don't want to do that.

I learned this valuable advice first hand in New Zealand. Not first hand as in upside down over a canyon, but over a panroasted fillet of tarakihi in a superb seafood restaurant called Fishbone. Fishbone is in Queenstown, as is New Zealand's most watched cyclist, Kelly McGarry, who turned out to be a modest and thoughtful guy. Between mouthfuls of clam chowder he explained that the best bit about his now famous back-flip was that it gave him time to think and look around. “Like cycling in general,” he said. “Only, you know, upside down.”

New Zealand is a great place to witness by bicycle. If you've not been before, your idea of

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what it's like may reflect Peter Jackson's take on The Lord of the Rings, an image the country plays up to: land in Wellington, the capital, and you're greeted by a sign saying “Welcome to the Middle of Middle Earth”.

But whereas the Orcs, Wizards and Hobbits owe a debt to digital trickery, the landscape they journey through is for real.

The government wants you to ride there. At a cost of more than NZ$75m (£40m) it recently completed Nga Haerenga, or the New Zealand Cycle Trail.

Nga Haerenga comprises some 22 “Great Rides” across both the North and South Islands.

These trails are largely off-road.

Sections cater to all abilities. Together they take in some of the planet's most jaw-dropping scenery, but unless you've unlimited time you'll have to pick a route.

I started out in Marlborough, home of the Queen Charlotte Track, which curls up through the Marlborough Sounds, a breathtaking series of flooded valleys. I had booked myself on to a road-cycling event called the Marlborough Grape Ride.

Great Ride. Grape Ride. But although the ride loops through New Zealand's biggest wineproducing region, the loop in question was less a stop-and-sip tour and more of a race.

Before I knew it I was in BikeFit in nearby Blenheim being fitted— aptly enough — for a bike. Brent, the shop's owner, was also doing the ride. I went at a pace that let me to take in the sights. After finishing I lay on the sun-dappled lawn at Forrest Estate and watched 100 or so women who had also done the race leap into a vat of grapes.

It's traditional apparently.

Having pedalled hard on roads I was keen to do the opposite, so I headed south

to Queenstown, where a new outfit called ChargeAbout rent electric mountain bikes. I was actually a bit suspicious. A charge-up mountain bike? Presumably I'd potter around town on it? But as Campbell Read, who rents out the bikes, emphasised, the French-made Moustache e-mountain bikes are pretty capable.

He proved it, too, haring off ahead of me along the Kelvin Heights trail to Jack's Point. On the flat the bike felt normal, but hit an incline, pedal hard, and the hills melt. With the Remarkables mountain range to one side, and the surface of Lake Wakatipu on the other, I sped along feeling pretty bionic.

There's a lot of biking to be done from Queenstown. As well as the 100km Queenstown Trail through the Wakatipu basin, there are more technical mountain biking options in the hills.

Tim Ceci from Vertigo Bikes showed me Queenstown Bike Park, accessed by gondola from the middle of Arrowtown. The park opened in 2012 and has

On your bike Getting there ■ Christopher Wakling flew with Air New Zealand (0800 028 4149; airnewzealand. co.uk), to Auckland via LA. Flights start at £1,266. Air New Zealand also operates internal flights.

Staying there ■ In Blenheim the writer stayed at Scenic Hotel Marlborough (00 64 3 520 6187, scenichotels.co.nz).

Doubles start at NZ$135 (£69).

■ In Queenstown, he stayed at Crowne Plaza Queenstown (00 64 3 441 0095; crowneplazaqueens town.co.nz) doubles from NZ$189 (£97); and Brown’s Boutique Hotel (00 64 3 441 2050; brownshotel.co.nz) doubles from NZ$165 (£83).

■ In Wellington, he stayed at Museum Art Hotel (00 64 4 802 8900; museumhotel.co.nz).

Doubles from NZ$199 (£98).

■ On the Kapiti coast, the writer stayed at Greenmantle

Estate (00 64 4 2985555; greenmantle.co.nz). Doubles from NZ$575 (£273).

Eating there ■ Fishbone, 7 Beach Street, Queenstown (fishbonequeenstown.co.nz).

Cycling there ■ Bike Fit, 24 Market Street, Blenheim (www.bike-fit.co.nz).

■ Vertigo Bikes 4 Brecon Street, Queenstown (vertigobikes.co.nz).

■ ChargeAbout, Queenstown

(chargeabout.co.nz).

■ Bike Wellington (bikewellington.co.nz).

More information ■ Tourism New Zealand: newzealand.com/uk ■ New Zealand Cycle Trail: nzcycletrail.com ■ Marlborough Grape Ride: graperide.co.nz ■ Queenstown Bike Festival: queenstownbikefestival.com ■ Tour of New Zealand: tourofnewzealand.co.nz

30km of green to double-black runs. We spent hours swooping through pine trees. Vertigo also runs mountain-biking trips from the top of the Remarkables, accessed by helicopter.

The following morning, I helped stack the bikes onto specially made racks before the flight. Southern Lakes Helicopters, which took us to the summit, does filming as well (including aerial shots of Hobbits when required).

We landed at Ben Cruachan.

The clunky familiarity of half the place names in New Zealand (Belfast, New Brighton, Aviemore) is invigorated by the Maori other half (Waimakariri, Taupo, Paraparaumu). The helicopter left us above a slope of grey schist and we set off to make the 18km descent.

Our guide, Jonny Congreve, brought up the rear. He also brought a backpack full of biscuits and inner tubes, both of which we consumed on the way down. We cut down the back of the mountain, moving from open scree to winding single-track.

The scrubland was dotted with razor-like Spaniard grass.

I paused to inspect a cut on my shin and noticed that, us aside, there were no buildings, no people, not even any sheep, just jagged slopes softening into rumpled hills, all the way to the blue-rinsed horizon.

You don't have to go far from anywhere in New Zealand to be within striking distance of excellent cycling. In the capital, Wellington, I met up with Ash Burgess. She set up the Revolve Cycling Club for women a few

years ago and now runs Bike Wellington, organising skills courses and guided rides in the hills around the capital.

Having spent a few days using electricity, a gondola and a helicopter to get to the top of things, it felt right to do a bit of cycling up as well as down. In slanted rain we headed up to Makara Peak.

Normally, Ash explained, we would have seen Wellington Harbour and the Central Business District from up here. But if the weather obscured our view, it didn't diminish the huge fun we had bombing down through the berms and rollers, between dripping ferns and pines.

There are around 300km of mountain biking trails immediately accessible in and around Wellington. Again,

they've largely been built by enthusiasts like Ash. From the glimpse I saw I'd say the pride evident in Bike Wellington's slogan — this is our city, these are our trails — is justified.

The irony of the trip is that while the pace and reach of cycling allowed me to enjoy the parts of New Zealand I visited, ultimately it convinced me I'd only seen enough to know I'd seen too little. I'll have to go back.

There are other road races, including a Tour of New Zealand that began in 2012, in which riders race from the top of the North Island and bottom of the South Island to meet in the middle. There are also all the Nga Haerenga Great Rides I didn't do.

And there's my back-flip to perfect. Slowly.

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TRAVEL

When retreat is the best tactic LAURA HOLT YOU can rise with the sun for your first class of the day — taken on a Brazilian beach perhaps, or high up in the Indian Himalayas — then dine on healthy meals, before sinking a well-earnt sundowner and crashing out for a deep, satisfying sleep.

If you’re looking for inspiration on where to go, specialist operators such as Health and Fitness Travel (020 3397 8891; healthandfitnesstravel.com), Destination Yoga (020 8968 0501; destinationyoga.co.uk), Free Spirit Travel (01273 564230; freespirityoga.co.uk) and in:spa (020 8968 0501; inspa-retreats.com) can help point you in the right direction.

Salute to the sun The laid-back lifestyle of the Balearics has long attracted a free-spirited crowd. But now there’s the chance to bend and stretch in the islands’ cool sea breezes with Formentera Yoga (07884 231 688; formenterayoga.com). The company offers retreats until late September on Ibiza and its smaller, southerly sister, Formentera. Prices start at €995pp (£805) for a weeklong escape, with accommodation in a beach house in Formentera or a country estate in northern Ibiza.

Flights are extra.

Bow to the moon Head to the Thai island of Phuket for an alternative take on the country’s hedonistic fullmoon parties. Set on a peninsula on the quiet south coast, the five-star, all-villa resort of Sri Panwa offers a series of fullmoon yoga sessions, started in May and continue on July 12, August 10, September 9 and October 8 in line with the lunar calendar. Guests who time their stay to coincide can do classes on the hotel’s floating yoga deck, which faces out across the Andaman Sea. Best at Travel (020 7849 4100; bestattravel.co.uk) has a seven-night B&B package at Sri Panwa with transfers and flights from £2,949pp.

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Pose up a mountain Take a spiritual journey back to the birthplace of yoga by checking into India’s new Vana Resort. Opened in January, just outside Dehradun — the capital of Uttarakhand — it offers a range of wellness packages that blend the principles of Ayurveda, Tibetan healing and yoga with views of the Himalayas. Health and Fitness Travel has seven nights at the luxury estate from £2,295pp, including dietitian-designed meals, a yoga programme, spa treatments, transfers and flights.

Recline on a beach If you’ve always wanted to look like a Brazilian beach goddess, consult the services of Yoga Body Rio (00 55 21 96905 6616; yogabodyrio.com).

Run by a team of certified yoga instructors, it arranges year-round retreats based at luxury hotels around the South American nation. Upcoming options include the Seven Sexy Chakras, a women’s-only holiday that heads to Trancoso in Bahia between August 2-9 for US$2,497 (£1,665pp). Daily yoga classes, half-board meals, excursions and transfers included. Flights extra.

Limber up in luxury The Seychelles blends blissful beaches with an intoxicating fusion of French and African cultures. New operator, pureSeychelles (01422 240 730; pureseychelles.travel), specialises in spa and wellness breaks in the archipelago. For the ultimate indulgence, it recommends a week at The Station Retreat Hotel in Sans Souci on Mahe. A week-long package at the seven-bedroom boutique retreat starts at £1,550pp, including half-board meals, daily yoga classes, meditation sessions and spa treatments, with transfers to local beaches. Retreats are held more throughout the year. Flights are extra.

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OUT AND ABOUT

with The

Appointments

CHAIRMAN Our man about town might not have scooped any of the prizes but it’s certainly been an awarding and rewarding few weeks

Aidan Cormack has been appointed contracts manager with interior fit-out specialist Portview Fit-Out. With a HND in building and construction and a PGD in construction management, he combines a strong educational background with over 30 years experience in the sector.

T

David Logan has been appointed office administrator for estimating at Portview FitOut. With a HND in business and finance, he brings 16 years of administrative expertise to the interior fit-out specialist, including seven within the financial services sector.

Lisa Monaghan has joined Portview Fit-Out as a CAD technician. She is an honours graduate in interior design and has previously worked as an interior designer, specialising in bars and restaurants, and as a freelance designer.

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HE CHAIRMAN is a regular visitor to Hillsborough Castle and was delighted to pop along to his favourite Royal palace to hobnob with the bright young things competing for the Apprentice of the Year 2014 awards recently.

While sadly my good hunting, shooting and fishing chum, the Princess Royal, was inspecting prize heifers at the nearby Balmoral Show and couldn’t make it, and there was definitely no sign of Lord Sugar, the attendees were still well entertained by Northern Ireland’s favourite ‘mentalist’ David Meade.

The ceremony was organised by the Department for Employment and Learning and was hosted by the delightful television presenter Claire McCollum in the throne room.

Swapping his overalls for a shirt and tie, Gareth Harkness, 19, walked away with the top prize. The Cullybackey teenager is completing his apprenticeship in engineering at Northern Regional College, Ballymena and is employed by Ryobi Aluminium Castings in Carrickfergus, which produces car engine castings.

The other finalists were bricklayer Michael Surgenor from Ballyclare, IT whizz Ryan McCullough from Newtownabbey, joiner Callum McCaffrey from Ballyhalbert, software engineer Martin Fox from Craigavon and budding spark Shane Crummy from Newry.

The Innovation in Partnership Award was won Terex Powerscreen in Dungannon for its link up South West College. The other finalists were McGees Butchers and Southern Regional College in Portadown, and Springsteens

Gareth Harkness from Ballymena was crowned Apprentice of the Year at a ceremony in Hillborough Castle. He was congratulated by Claire McCollum, who hosted the ceremony, and Employment Minister Dr Stephen Farry

Poultry giant Moy Park marked improvements in its environmental performance in 2013, which were celebrated by engineering manager David McDowell and project engineer Matthew Foster

and Springvale Employment and Learning in Belfast.

Minister for Employment and Learning Dr Stehen Farry was among the first to congratulate Gareth — described as “meticulous” and “innovative” by his work colleagues — and all the other finalists.

After the ceremony, the young apprentices swapped their packed lunches for a sumptuous spread beef stroganoff and chicken supreme, boiled potatoes and rice, and pavlova or chocolate torte for dessert.

The Chairman reach for his cigars and brandy!

----WHILE The Chairman is a fan of brandy, he won’t be imbibing the dog food of the same name, the marketing campaign for

Appointments

Mark McAlinden has been appointed CAD technician with interior fit-out specialist, Portview Fit-Out. He is a graduate in architectural technology and management and has previously worked as a design and CAD technician.

Meagan Green, former Miss Northern Ireland, congratulated Claire McCann and Gwen Rafferty from Mackle Pet Foods, the winners of best marketing campaign at the Ulster Grocers' Marketing Awards at the Culloden Hotel, with Joanne Curran, marketing director of AV Browne, the main sponsor of the awards

Stephen Close has been appointed estimator at Portview Fit-Out. He has a BSc (Hons) in construction engineering and management and brings over 10 years of estimating experience to his role as estimator within the Belfast-based interior fit-out specialist.

Dunmurry Dental Practice has marked 10 years of looking after the teeth of around 12,000 patients every year. The practice was founded by dentist Philip McLorinan and his wife Debbie

Former Miss Northern Ireland Meagan Green at the Ulster Grocer Marketing Awards with Moy Park director of sales Ireland Paul Burch, who received the highly-commended award for the best marketing campaign, and Joanne Curran of AV Browne, the main sponsor of the awards

which won a top award at the Ulster Grocer Marketing Awards 2014, held at the Culloden Hotel to raise funds for grocers’ benevolent fund Grocery Aid. Now in its 26th year, the event was attended by more than 400 representatives from the local grocery, food, drink and marketing sectors with a whopping £45,000 raised on the night.

Winners and highly commended trophies were awarded in each of six categories, presented

by Ulster Grocer publisher James Greer, UTV presenter and host for the evening Paul Clark, and the charming former Miss Northern Ireland Meagan Green, as well as individual award sponsors.

The top accolade of Best Marketing Campaign 2013,

sponsored by AV Browne, went to Mackle Petfoods, recognised by the judges as a “wonderful piece of work” which used a broad selection of media to put value behind brand awareness of Brandy. Highly commended in the category was Moy Park, with its Hello! We’re the Chicken People campaign, applauded

>> Turn to page 60

John Graham has been appointed commercial director at Andrew Ingredients. He was previously financial director for Deli Lites. He has also worked as manager in KPMG’s mergers and acquisitions operation and was with Grant Thornton in its corporate finance team.

2 June 2014 BUSINESS MONTH 59

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THE CHAIRMAN

Appointments

David Dobbin has been appointed chairman of the Northern Ireland Food and Drink Association, which promotes excellence and best practice in the food and drink sector in Northern Ireland. Dr Dobbin is a member of the Agri-Food Strategy Board and is group chief executive of United Dairy Farmers.

A family business leadership programme has been designed by the William J Clinton Leadership Institute at Queen's University. It was launched by (left to right) Paul McAfee , trading manager of Chain Reaction Cycles, Anne Clydesdale, director of the William J Clinton Leadership Institute and Maybeth Shaw, business partner at BDO

Trevor Dougan has been appointed agent and director of new estate agency Dougan Residential and Commercial.

He has been working in the property industry since 1996 and became a member of the Royal Institution of Chartered Surveyors in 2001.

Tony Adams has been appointed agent and director of new estate agency Dougan Residential and Commercial.

He started his career in the banking sector and moved into property in 2004. He has wide experience in all aspects of residential estate agency.

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>> From page 59 as a superb beginning in raising brand awareness.

Forest Feast led the Best Brand category, sponsored by the Northern Ireland Independent Retail Trade Association (NIIRTA), after demonstrating the value of marketing activity in achieving rapid expansion, with Sunblest highly commended.

Glenarm Organic Salmon lifted the Prize for Best Food Export Marketing, sponsored

by Invest NI, after making a global splash only five years after losing its entire stock, while Forest Feast was highly commended for its impressive international sales push.

Best New Product Launch/ Relaunch, sponsored by Karro Group, went to GM Marketing (Ireland) for the successful launch of its sugar-free Free’ist product range, while Mash Direct was highly commended for positioning its potato croquettes in the gluten-free market.

In the Hunky Doryssponsored category of Best CSR Initiative/Charity Partnership,

At the RICS NI Awards, chairman Paul Kendrick presented the highly commended award to the team behind the Walled City Lighting Project. From left: Michael Doyle of Kriterion, Londonderry Mayor Martin Reilly, Tony Monaghan of Derry City Council; Frank Morrison of Derry City Council and Shane Graham of Gillespie & Cummings.

Musgrave Retail Partners Northern Ireland walked away with the award for its fundraising support of Action Cancer, and Tesco Northern Ireland was highly commended for its work with Diabetes UK. Green Retailer of the Year, sponsored by Power NI, went to Nisa in partnership with DHL in recognition of its broad-based green programme, with Henderson Retail highly

commended for its impressive track record and targeting of 100% waste recovery during 2014. Judges of the Ulster Grocer Marketing Awards 2014 included Michael Maguire of Quintus, Alan Egner of Power NI and Marian Norwood of the University of Ulster.

After all that, it was certainly time for some ‘hair of the dog' for The Chairman the following morning!

Appointments

Michael Graham has been appointed agent and director of Dougan Residential and Commercial. He has worked full-time in the industry since graduating from the University of Ulster with a degree in housing management in 2010.

Over the last five years, he has gained extensive experience.

The picture shows David Moorhead (third from right) celebrating his win with (left to right) Professor Cathal O’ Donohue of Teagasc, Gareth Gormley and David Small of DARD, outgoing MEP Mairead McGuinness (not yet reelected on going to press, seated) Professor Gerry Boyle of Teagasc and John Concannon of JFC THE Chairman is always happy to acknowledge his farming roots, so he was happy to attend the JFC Innovation awards organised by the Department of Agriculture and Rural Development and Teagasc, in association with JFC Manufacturing and the Irish Farmers Journal.

Green Sword Environmental in Co Fermanagh won the cov-

Paul Kendrick of RICS (far right) presents the award to the team behind Antrim Castle Gardens for its win in the tourism and leisure category of the RICS awards. From left: Adrian Watson of Antrim Borough Council, Antrim Mayor Roderick Small, Alderman Sam Dunlop, Reggie Hillen from the council, and the council's cultural services manager, Gary Shaw .

eted start-up category at the ceremony in the Claregalway Hotel in the village of the same name in the county of — you guessed it — Galway.

Managing director David Moorhead has over 20 years’ experience in microbial science and has developed a revolutionary cleaning microbial liquid which earned him the accolade.

And to quote The Chairman's favourite thespian Jennifer Aniston, here comes the science bit.

The cleaning product is actually a blend of bacterial spores and bio-stimulating agents that can break down oil in the soil, on water and on hard surfaces much quicker than its rivals.

Paul Kendrick of RICS (far right) presents the award to the team behind Antrim Castle Gardens for its win in the tourism and leisure category of the RICS awards. From left: Adrian Watson of Antrim Borough Council, Antrim Mayor Roderick Small, Alderman Sam Dunlop, Reggie Hillen from the council, and the council's cultural services manager, Gary Shaw .

Gillian Ritchie has joined law firm Tughans as an associate director in their banking department. She graduated in law from Queen's University, Belfast in 1997 and was admitted as a solicitor in Northern Ireland and the Republic of Ireland. She joins Tughans from Bank of Ireland.

David Strahan has been appointed as Translink’s new group chief executive. He is currently chief executive of Dee Valley Group plc. which supplies drinking water to domestic and business customers in north east Wales and the north west of England.

2 June 2014 BUSINESS MONTH 61

LEESON’S LAST WORD

with Nick

Leeson

Banks in Ireland should not squander the luxury of being able to choose to learn from the terrible mistakes of the past that crippled economies around the world

I

AM attending and talking at a number of events at the moment entitled ‘Twenty years on: What really has changed?’ It’s a bit of a misnomer as the bank collapsed only 19 years ago, but you get the idea.

The upshot in financial circles is that the challenges remain largely the same. Yes, the markets, the systems and the scrutiny have moved on with differing degrees of success as well as the perceived threats to the business — but the challenges remain fairly constant.

As it was then, having the courage to ask the difficult questions remains one of the hardest things to do. It shouldn’t be, but it invariably is.

History can be a great tool, if it’s learnt from and questions asked. It should certainly serve as a barometer so that mistakes of the past are not repeated.

Having a history of making mistakes myself, I’m happy to concede that making a mistake once is acceptable, making the same mistake twice or more is just plain stupid. My stupidity hit fairly stratospheric heights during my time at Barings, 1992-95, but thankfully I won’t make them again.

Others are. Look, for example, to the wave of unrest in Ukraine and Crimea. I vaguely remember the Cold War years of my youth and have vivid memories of the collapse of the Berlin Wall and the breaking up of the Soviet Empire. We seem to have gone full circle, with the Crimea annexing returning to Russian control. Russian soldiers are patrolling and crossing borders, creating a sense of uncertainty and fear.

I sincerely hope that Dame Shirley is wrong and we aren’t doomed to repeat the mistakes of our past. But what I do know for certain is that we as individuals and indeed political leaders and institutions — in that I’m firmly looking at the banking

62 BUSINESS MONTH 2 June 2014

sector — have a choice to make.

And that choice is a luxury that should not be squandered.

I have no political or religious affiliations. I also don’t vote in political elections as I can’t see the point. I think the luxury of choice outweighs any political or religious affiliation. I question whether most politicians or religious figures actually believe what they are saying or have simply become indoctrinated into just voicing the party line. Indoctrination is a dangerous thing as it removes the luxury of choice.

Many years ago, while en route to Colombo airport in Sri Lanka, the plane I was on diverted to Madras in India.

None of us were sure why at the time but soon discovered that Tamil Tigers, many as young as 16, had invaded the runway, strapped with dynamite, and blown up seven airplanes. There was no loss of life other than the terrorists. A day later I landed at Colombo airport to be greeted by the debris. These people had been too heavily influenced by their affiliations, indoctrinated to the extent that they made completely irrational decisions.

Strapped with dynamite, the terrorists had blown up seven planes Thankfully, the conflict moved on in Sri Lanka as it does in most jurisdictions.

Events of the past and the history of the struggles serves as a perfect reminder of not repeating mistakes.

It’s the same in banking as it is in any form of life. Banks in Ireland actively looking to build a new mortgage book, long before they’ve completed working their way out of the existing non-performing one, should at the very least take a breath and recognise the mistakes that got us all into this mess — and then make the choice, hopefully the right one, to make sure the sector returns to working in the interests of both the customer and the banks.