Business Month March 2015

March 2015 • ISSUE 52 PRICE £2.50 (Where sold)

The entrepreneur with

X-RAY VISION Hugh Cormican of Cirdan Imaging on how the geeks became the job creators

• FROM OFF-SHORE TO NEAR-SHORE • FOCUS ON MOTORING AND OFFICE FURNITURE • PHILIP RAINEY FROM RUGBY TO 3 November 2014 BUSINESS MONTH RENEWABLES • THE CHAIRMAN ENJOYS BLACK-TIE SEASON

CONTENTS

48

Editor’s note Margaret Canning

FEATURES

mcanning@belfasttelegraph.co.uk

W

12 Analysis: What can businesses do now to help balance the books of Northern Ireland plc?

14 Analysis: David Prosser on how even Germany’s medium-sized businesses could learn from UK 22 Analysis: Alan Watts explores crowdfunding as a way of investing money 24 Breaking the mould: With Kirsty McManus from the University of Ulster 28 SME Watch: Amanda Ferguson talks to William Bullock of Grace’s Irish Biscuits about how his shortbread will take over the world

FOCUS

32 Jobs: For decades companies have been ‘off-shoring’ jobs to developing nations in a bid to drive down costs, but is this trend being reversed?

38 Motor industry: Northern Ireland’s forecourts expect attractive finance deals, falling fuel costs and an enthusiasm for hybrid models will continue to boost their trade

OFFLINE

46 Out to Lunch: Joris Minne goes out to lunch with Noel Brady, one of the top business advisors and fixers in Northern Ireland, and hears his views on the latest bid to rebalance our economy 58 The Chairman: Our man about town gives us the inside track on business 62 The Last Word: Are employers getting value for money in what’s fast becoming a ‘perks arms race’?

Business Month 124-144 Royal Avenue, Belfast, BT1 1EB Editor - Margaret Canning

COVER STORY REVENGE OF THE NERDS Hugh Cormican of Cirdan Imaging tells Audrey Watson how creative intellects are the new wealth creators

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58

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

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

ELCOME to the March issue of Business Month, in which we profile one of our most high-achieving but often-overlooked entrepreneurs, Hugh Cormican.

The Newry man is the head of Cirdan Imaging and a co-founder of Andor. He reveals why he believes the geeks have taken over and details his plans for Cirdan Imaging in the future.

As inflation reaches an all-time low, Economy Watch muses on the economic impact of supermarket price wars and currency wars respectively.

And Paul Gosling ponders the recent trend of on-shoring, as companies discover that the grass is not necessarily greener on the other side and shift back offices and manufacturing operations closer to home.

We also take in-depth looks at motor sales and office furniture — and as the Six Nations heads towards an exciting climax, one former Ireland international shares his lessons from pitch to boardroom.

The Chairman is up to his usual tricks, enjoying a wide range of events from the first black-tie bunfight of the season to a breakfast to launch Balmoral Show and the launch of a new beer.

Oh, and the Chairman turns fifty shades of pink when he hears about one particular evening out...

Enjoy.

2 March 2015 BUSINESS MONTH 3

NEWS BITES

131

125

Belgium

Ireland

148

Netherlands

109

100

Spain

UK

International Comparisons of Productivity, Final Estimates 2013: current GDP per hour worked

Netwatch surveillance firm sets up in Newry A REMOTE surveillance company which protects international businesses against terror attacks is to set up shop in Co Down.

Netwatch Ireland is opening a remote monitoring and disaster recovery hub in Newry, shielding high-worth individuals in Africa and the motor dealer industry in the US from criminal damage.

The operation will create 15 jobs and its head said it aimed to grow aggressively over the next number of years.

Chief operations officer Wendy Hamilton said: “Netwatch is providing mission critical services to companies around the globe.

“They depend on Netwatch to ensure they are protected against major incidents, such as a terror attack, and more importantly that they can continue to operate their businesses in the event of a major incident.

“Establishing a second operations hub means that we can support an expanding client base and that we can ensure continuous monitoring of their property.”

Historic Kelly’s Cellars may lose listed status ONE of the oldest pubs in Belfast could be about to lose its listed status — leaving it vulnerable to development or demolition.

Kelly’s Cellars in Bank Square — where the United Irishmen met to plot their 1798 uprising — is on a list of 17 Belfast buildings which the Department of the Environment has proposed delisting.

The list also includes 4-8 and 10 Church Lane (a series of traditional shop fronts including tobacconist Miss Moran) and numbers 276-294 Tennent Street, known as Edenderry Gardens.

The Ulster Architectural Heritage Society said that despite their present condition, all buildings currently proposed for delisting contribute to the value of Belfast’s fragile built heritage.

Kelly’s Cellars, at Bank Street, was built in 1720 by merchant Hugh Kelly who kept it as a

ON THE BALL: The CBI in Northern Ireland visited the Kingspan Stadium in Belfast to hold a discussion on growing through acquisitions. CBI chairman Colin Walsh (second right) was joined by (l-r) Adrian McCutcheon of Telestack, Ian Sheppard of Bank of Ireland and Michael Howard. Mr Howard, formerly chief excecutive of SHS Group, shared his experience of acquiring firms such as Bottlegreen and British Pepper and Spice. Mr McCutcheon described his experience of being acquired after his company was bought by US firm Astec last year bonded warehouse selling rum, gin and whiskey. It is renowned as a meeting place for Henry Joy McCracken and the United Irishmen when they were planning the 1798 Rising.

Titanic quarter chiefs let go by new owners TITANIC Quarter chief executive David Gavaghan is to be let go along with two senior colleagues as the company undertakes drastic cost-cutting.

The sudden move by Titanic Quarter Ltd comes after loans relating to the company were sold by Ulster Bank.

They are now owned by Davidson Kempner, a US vulture fund with a reputation for cost-cutting.

One person familiar with the situation said: “These guys are pretty ruthless and this is a great example of an asset owner saying, “Why are we spending all this money on these people”?”

Mr Gavaghan, a former head

4 BUSINESS MONTH 2 March 2015

of the Strategic Investment Board credited with “energising” the Titanic Quarter development, has been in the post for two years.

The identity of the other two senior executives has not been revealed.

A spokesman for Titanic Quarter Ltd said it was “restructuring” its operations after an internal review of costs.

Chairman Pat Doherty said: “Following a benchmarking process against other large international projects, it became clear that the cost base at Titanic Quarter Ltd was not proportionate to the business. As a consequence we have restructured TQL’s team and reduced headcount by removing three senior positions.”

January’s shopping figures show decline SHOPPER numbers fell 2.4% in January as sales like Black Friday transform our spending traditions.

While footfall figures were down 2.4% across all shopping areas in the province compared to January 2014, high streets suffered the steeper decline of 3.4%, according to Springboard and the British Retail Consortium.

In contrast, December had witnessed a rise of 1.2% in shoppers on the same month in 2013.

Northern Ireland’s decline in January was double that of the UK average of a 1.2% fall.

Karise Hutchinson, head of business and enterprise at the Ulster University Business School, said the growth of flash sales promotions, such as Black Friday, has had “a knock-on effect and an impact on the January sales”.

Criona Collins, director of retail at commercial property specialists Lambert Smith Hampton, said: “The sentiment in the retail industry is optimistic but the reality is that the situation is still in the early stages of recovery. It is likely that the recovery will be slow, but slow and steady is better than boom and bust.”

NEWS BITES

Proposals to change zero hour contracts

▲ CORE INFLATION:

The alternative measure of inflation, which excludes alcohol, tobacco, food and energy, rose to 1.4% in January, from around 1.3% in December

▲ ECONOMIC INACTIVITY:

There was an 11,000-strong increase in people neither in work nor looking for work in the last quarter of 2014

▲ HOUSE PRICE TRANSACTIONS

There were 20,200 homes sold here in 2014, up 22% on 2013 and the highest number of sales since 2007

▲ PUBLIC SECTOR NET FINANCES:

Excluding the effect of bank bail-outs, public sector net finances were in surplus by £8.8bn — up from £2.3bn last year

▲ UK NEWBUILDS:

There were 137,010 new home starts in 2014, up 10% on 2013

t SHOPPERS:

There was a 2.4% fall in shoppers’ footfall in NI in January, compared to a 1.2% increase in December

t CONSUMER PRICE INFLATION:

CPI fell to just 0.3% in January, compared to a 0.5% year-onyear rise in December

t UK MORTGAGES:

£14.3bn in home loans was handed out in January — an 11% tumble on January 2013

t CLAIMANTCOUNT:

The numbers of people claiming jobseekers’ allowance in NI slumped to 48,200 in January

t NEWCAR SALES:

There was a 4.58% year-onyear drop in the number of new cars sold in the province in January

FIRMS may be banned from imposing exclusivity clauses on staff on zero hours contracts under new plans by the Employment Minister.

Around 28,000 people across Northern Ireland are estimated to be on zero hours contracts.

But Employment Minister Stephen Farry said he is stopping short of banning zero hours contracts, under which staff have no guaranteed hours but are expected to be available for work.

Unions have criticised the contracts while businesses have said they provide the flexibility to respond to peaks and troughs of business.

Legislation on the subject is to be tabled by June.

Proposals from the Department for Employment and Learning include banning exclusivity clauses, used in some cases by firms to prevent a zero-hours hire from working elsewhere.

Employers would also be required to review a fixed pattern of work over six months with a view to converting it to a fixed hours arrangement — though business group the CBI said such a measure would be “unworkable and counterproductive.”

The minister said it was people in low-paid work who suffer most on zero hours contracts.

“It is vital that government intervenes in this instance to

Laws regarding zero hours contracts may be about to change ensure that the rights of these vulnerable employees are protected in what is a fast moving labour market,” he said, adding that his proposals would give more protection to workers’ rights than those in the rest of the UK. Jimmy Kelly from trade union Unite said the decision not to ban the contracts had “failed” workers dependent on that form of work, who were “mostly young and female”.

“Workers can be left facing no hours some weeks, but can’t claim benefits due to their employment status. This is not the future of work we want to see.”

Rachel Penny, employment law partner at law firm Carson

McDowell, said it was good news that there was to be no ban on zero hour contracts, but added: “Some employers who use exclusivity clauses for reasons of confidentiality may have to rethink their arrangements, but for the most part, there is no reason someone working in a hospitality or retail job should not be allowed to work for another similar company.”

But asking employers to move employees onto permanent work could be “more problematic” and risk zero hours contracts being terminated before the six-month point.

Similar proposals had been rejected in Great Britain.

Apple builds £628m Irish facility APPLE is building a €850m (£628m) data centre in the west of Ireland to power its online services, it has revealed.

The operation at Athenry, Co Galway, and another at Viborg in Denmark, represent the technology giant’s biggest project in Europe to date.

It is expected that the Irish facility, to be run on renewable energy, will create 300 jobs during its multiple phases of construction.

The 166,000sq m operation is planned to be up and running by 2017.

Apple chief executive Tim Cooke said: “This significant new investment represents

6 BUSINESS MONTH 2 March 2015

Apple’s biggest project in Europe to date. We’re thrilled to be expanding our operations, creating hundreds of local jobs and introducing some of our most advanced green building designs yet.”

The project will involve recovering land and restoring native trees to Derrydonnell Forest in Athenry. An outdoor education space will be built for local schools, as well as a walking trail for the community, Apple said.

The plant will help power online services including the iTunes Store, the App Store, iMessage, Maps and Siri for customers across Europe.

Taoiseach Enda Kenny said he was delighted with the investment in Ireland.

“It is a very significant investment in the west of Ireland and is fantastic news for Athenry with significant knock-on benefits for the region,” he said.

Apple already employs more than 3,000 people in Ireland, mainly at its European headquarters in Cork.

Microsoft and Google are among other tech giants to locate data centres in the country, where the predictable climate is seen as an asset in lowering cooling costs for the technology involved.

NEWS ANALYSIS

Right man for the job

It has taken some big hits, but Simon Neville looks to see if newlyinstalled John Allan is the chairman to take Tesco back to the top AILING supermarket chain Tesco selected John Allan as its new chairman last month. But many retail analysts think it passed over the best candidate.

John Allan is the right man for the job. That statement seems to be the overwhelming sentiment among commentators, analysts and investors looking at the man chosen as Tesco’s new chair.

But herein lies the problem.

Why was Mr Allan the last appointment to the board of directors he will soon be leading? Isn’t it supposed to be the other way round, with a new chair appointing the right men and women, rather than inheriting a boardroom packed with new arrivals all appointed by a predecessor?

That is why Mr Allan is the right man for the job. He is probably more willing to accept what he has been handed than the other strong candidate in the race for Tesco chair, Archie Norman.

Mr Norman was touted as the perfect candidate by many in the City, and was even approached by Tesco after shareholders told the board to give him a try. However, the independently minded former Asda boss was the right man at the wrong time. Tesco knew it and even Mr Norman probably knew it.

The problem was the outgoing chairman, Sir Richard Broadbent.

In an ideal world, Sir Richard would have fallen on his sword some time ago, instead of starting a hunt for a new chief executive, finance director and non-executives with retail experience.

Instead, he brought in Dave Lewis from Unilever, finance director Alan Stewart from Marks & Spencer and non-executives Richard Cousins and Mikael Ohlsson from Compass and Ikea.

When he sacked the supermarket’s former chief executive, Philip Clarke, last July Sir Richard was asked whether he too would step aside. But he said it would be for the shareholders to decide whether he was part of the solution or part of the problem.

Unfortunately, he was a bigger part of the problem than any of the shareholders could have envisaged, and now Mr Allan is

Tesco has appointed a John Allan (below) as the new chairman in a bid to stop the slide stuck with the board Sir Richard has built.

That is not to say Mr Lewis, the current boss, isn’t doing a good job. Staff morale on the shop floor has improved, with the threat of a visit from the unpopular Mr Clarke lifted. Mr Lewis is also sending missives throughout the organisation calling on his employees for ideas and inspiration.

Investors also appear impressed with Mr Lewis’s slick presentations and carefully crafted messages.

Shares are up 26% since he exposed the £263m accounting scandal. There was even a momentous day in January when the chief executive announced plans for 43 stores to close and a trimming of staff numbers.

This caused shares to rise 15% — the biggest single day’s rise in 27 years.

The cost-cutting was not even that drastic. Those 43 stores (including one in Ballymena and two in east Belfast, at Connswater and Cregagh Road) represent just 1.25% of Tesco’s UK estate.

Yet investors apparently saw

8 BUSINESS MONTH 2 March 2015

an impressive turnaround plan.

However, not all analysts are so optimistic. Some are awaiting for more detailed plans from Mr Lewis before giving the thumbs up.

They want a clearer diagnosis of the causes of Tesco’s illness, which was causing the supermarket to lose customers to rivals long before the exposure of the accounting irregularities.

But the chair/chief executive dynamic looks better. Mr Lewis and Mr Norman would have been less like Jeeves and Wooster and more like Noel and Liam Gallagher, jostling for the limelight.

Had Mr Norman accepted the gig, he would also be forced to give up some of his more interesting boardroom positions, including ITV. He would also have had to end his trips down under every six weeks to sit on Australian supermarket Coles’ board.

With such baggage, Mr Norman probably could not have made the decision easy for Tesco.

And perhaps this was why they went with Mr Allan, who has less

glamorous titles to give up.

But is the Tesco bloodbath over? Will the move from its spiritual Cheshunt home to the new surroundings of Welwyn Garden City help? Or will Sir Richard’s hiring legacy create more problems down the line?

Many analysts are convinced more heads will roll, including some of the remaining eight non-executives in charge during the worst of times under Mr Clarke. And even though Mr Allan may have been appointed unanimously don’t expect him to go easy on his appointers.

A new chairman is a small step on the road to recovery. But only time will tell if Tesco can pull itself through one of the toughest times in its history.

As retail analyst Mike Dennis at Cantor Fitzgerald, who first raised questions on possible accounting overstatements, explained, there is a long way to go.

“We would have preferred Archie Norman over the 66-yearold John Allan, as Allan is seen as more of a logistics expert rather than a food retailer,” he says. “Any recovery still needs Tesco to produce positive total sales growth and a credible recovery plan.”

NEWS ANALYSIS

A taxing business

Richard Gray, Carson McDowell Solicitors, considers the price to be paid for a corporation tax cut COUNTLESS column inches have been written about the lengthy, and it appears successful, campaign to give Northern Ireland powers to set its own rate of corporation tax.

These articles have predominantly been from the cheerleaders for the cause or the naysayers who fear it will cost too much to lower the corporate tax rate to 12.5% in Northern Ireland from the UK-wide rate of 21%.

Somewhere between those who feel strongly that corporation tax powers can be a game-changer for the economy and those who believe our politicians won’t be able to handle those powers, lies the need for some measured assessment of the implications for Northern Ireland businesses in the short to medium term.

As things currently stand, the Corporation Tax (NI) Bill looks set to pass before the next General Election, allowing Northern Ireland to set its own rate of corporation tax from April 2017.

According to the Secretary of State for NI, Theresa Villiers, 34,000 businesses will benefit.

Senior officials have estimated the cost of moving from the UK rate to a 12.5% rate at over £300m. Any cut in corporation tax means less revenue collected by the Treasury and under European rules Stormont would have to make up that shortfall by way of a cut in block grant from Westminster.

Our clients have started asking the big questions. What does this mean for our business? What is going to change? Do we qualify to benefit or are we excluded?

There is a lot of confusion around the latter question because there is plenty in the Bill which may be open to interpretation and in some instances is less clear-cut than many supporters had hoped.

The vast majority of profits generated by micro, small and medium sized companies from trading activities in Northern Ireland will be eligible for the tax rate.

But fearful of leaving loopholes which could be liable to exploitation, and of leaving them-

The ability to set corporation tax levels is not necessarily a good thing selves open to criticism from the Organisation for Economic Co-operation and Development (OECD), the Treasury has gone the extra mile to minimise the potential for abuse.

They’ve done this by adding a raft of exclusions and qualifiers which leave some people unsure where they stand because Treasury has “reserved the right” to move the goalposts and amend the definition of excluded trades and activities.

Excluded activities include: l Income from non-trading activities, such as property l Large parts of the financial services industry including banks and lending — profits from these activities can easily be moved to a different country. l Investment and investment management l Long-term insurance business and reinsurance l Oil and gas exploration or exploitation of the continental shelf.

Most of these exclusions didn’t

10 BUSINESS MONTH 2 March 2015

come as a surprise. But the bill is very complex and has many elements where inclusion or exclusion is a bit less clear — for example how the rates will in practice apply to companies with mixed trade between Northern Ireland and Great Britain.

For SMEs, only companies which pass a test showing at least 75% of staff time and costs relate to work carried out in Northern Ireland will be eligible to benefit.

Does this mean local construction companies who are currently working almost exclusively in England and Scotland will continue to be taxed at the main UK rate?

Also, to counter the risk of profit shifting, multinationals will have to have a fixed place of business in Northern Ireland (a Northern Ireland Regional Establishment) such as an office or factory. HMRC says it will use “internationally recognised principles” to attribute profits which qualify for the Northern Ireland rate, a phrase which may be open

to interpretation.

While most financial services activities won’t qualify for the NI rate, some back office functions will. That will come as a relief to Invest NI, who have attracted companies like Citi and Chicago Mercantile Exchange (CME) to set up what many would term “back office” centres. However, the Bill also provides the qualification that HMRC can decide what the definition of a ‘back office’ operation is, which may cause some nervousness on Bedford Street.

So far, it appears that most tax reliefs and tax credits that apply in the UK — for example plant and machinery allowances, research and development (R&D) allowances, reliefs on derelict land and film and video game tax reliefs — will all still remain as valuable in NI as the rest of the UK. Existing loss reliefs will be altered to take account of the different tax rates so a NI loss would first be offset against NI profits, a UK loss would be offset against UK profits and any NI loss set against a UK profit would reflect the differences between the tax rates.

Those who have led the charge to gain NI the power to decide its own rate of corporation tax have always repeated the mantra that it was most important to gain the power in the first place and then work out how it would actually be implemented.

Assuming the “detailed mechanism” under development to adjust the block grant actually works, and the shortfall is made up by overall growth in the economy, there are still questions to answer.

Whether it means a cut of £300m, or £350m, or more to the block grant, the debate over devolved corporation tax certainly has a long way to run. Lowering to — or below — the 12.5% rate in the Republic of Ireland, even in a phased manner, may require difficult discussions around spending priorities which are unpopular in the short term and the cost makes it a political hot potato that will require cross-party support if it is to succeed.

NEWS ANALYSIS

Maximising tax credits

Ian Edwards, tax director of EY Northern Ireland

AS the prospect of the Northern Ireland Assembly taking control over its corporation tax destiny draws ever closer, we must ask: what can businesses do now to help balance the books of Northern Ireland plc?

The optimal answer may indeed be rooted in a corporation tax reduction, but with many innovative Northern Ireland (‘NI’) companies still not availing of the generous tax incentives available, can more be done now?

In the depths of the recent recession, amidst a backdrop of austerity and economic stalemate, Chancellor George Osborne championed “Britain Open for Business” as he set research and development (R&D) and intellectual property (IP) firmly at the forefront of his plans for economic recovery.

This rhetoric was supported in action by generous increases in R&D tax credits and the introduction of the patent box, both of which support the Government’s commitment to having the most competitive corporate tax system in the G20.

As the UK now enjoys its position at the forefront of the economic recovery within the EU, it is clear that this commitment to IP tax incentives played its role in laying the foundation in the road to recovery. Unfortunately this level of growth has not yet crossed the Irish Sea as the Northern Ireland economy continues to lag behind the rest of the UK. The devolution of corporate tax setting powers in April 2017 could very well be the game changer we need, but other valuable reliefs are arguably not being exploited to their full potential.

Namely the region’s uptake of R&D tax credits and the patent box does not reflect the level of innovation in NI. These reliefs are by no means a new form of tax incentive nor are they viewed as aggressive tax planning as featured in the press in recent years.

First introduced by the Labour government in 2000 and supported by the coalition government, R&D tax credits are an estab-

Northern Ireland companies should be applying for more tax relief lished cornerstone of the UK tax framework.

R&D tax credits allow for an immediate cash incentive and ultimately a lower effective rate of tax, linked to the amount of qualifying R&D expenditure incurred by companies. They are available for both loss making and profitable companies.

The patent box provides for a 10% rate of corporation tax, phased in until April 2016, which applies to profits arising from the exploitation of a patent. In practice, this means that if a patented component is incorporated into a larger product which is then sold, the entire profits of this end product fall within the 10% patent box.

In the recent Autumn Statement, the Chancellor announced an increase in R&D relief available for both SMEs and large companies alike, continuing the upward trend in its investment in such relief.

This means that from April 1 2015, every £100 spent by an SME on qualifying research and development will attract a cash tax saving of £26 while non-SMEs maximising the RDEC (research and development expenditure credit) form of the R&D regime

12 BUSINESS MONTH 2 March 2015

will receive a tax credit of £11.

Both reliefs translate to a cash repayment in loss making firms.

As a result of these and other recent changes, the UK has built one of the most competitive tax systems in the G20. There has never been a better time to invest in R&D and IP in the UK as a result of these incentives.

Unfortunately it has been our experience that our home grown companies are simply not claiming their fair share of these government backed reliefs. Yet, that is not to say that R&D is not being carried out in the region or to say there are not many companies making the reliefs. On the contrary, we at EY have clear visibility of the unprecedented innovation and pioneering development that is constantly ongoing in our region through our client base.

At EY we are committed to dispelling the myth that R&D and IP are strictly limited to high-tech industries such as pharmaceuticals and aerospace design. Far from the perception of white-coated technicians in laboratories, we can see that it is being implemented in commercial farms, kitchens and workshops.

Unexpectedly, even Northern Ireland companies currently

making R&D claims may also be arguably under-claiming such relief. In recent times we have supported companies in making claims which have increased 10-fold due to recent HMRC guidance and legislative changes.

As a result of our work we have seen first-hand how such benefits have revitalised companies and allowed them to reinvest and expand well beyond their previous means. It can provide cash flow relief for loss making companies, release funds for training and recruitment or support borrowing for capital investment.

It is incumbent on NI companies to ensure their IP tax incentives are maximised. With a view to achieving this, our advice to those currently claiming such relief would be to evaluate current methodologies and ensure that the most recent rates and guidance updates are being applied.

For those companies which have not yet considered the regime, you should make immediate steps to seize the excellent opportunity. An eligible claim requires a well-structured approach, which identifies eligible activities, quantifies eligible expenditure, and is substantiated through robust supporting documentation.

NEWS ANALYSIS

Taking middle ground David Prosser on how even Germany’s medium-sized businesses could learn a lesson or two from the UK Mapping out: UK medium-sized businesses have grown rapidly

GERMANY’S Mittelstand companies are renowned as commercial powerhouses — these medium-sized, often family-owned businesses have become symbols of German economic superiority. It may therefore come as a surprise to discover that the Mittelstand’s equivalent in the UK has grown so rapidly over the past five years that it’s now bigger and better than Germany’s.

That, in any case, is the claim of the accountancy firm BDO. It says Britain’s mid-market companies have collectively grown by 33% since 2009 and are now earning revenues worth over €1.9trn (£1.4trn) a year.

In Germany, meanwhile, companies of a similar size (BDO defines mid-market as firms with turnover between £10m and £300m a year) have grown just 12% over the same period. Their annual turnover now stands at €1.78trn.

Britain’s mid-market companies have the edge on other measures, too. They employ 9.3m people compared with Germany’s 9.2m, for example.

We even have more companies of this size.

One area where Germany still has an advantage, however, is on government support.

For years, the Mittelstand has prospered, in part, thanks to the assistance of German taxpayers, who have underwritten investment programmes and other supportive policies designed with the country’s medium-sized companies in mind. The success of the British mid-market in recent years, by contrast, has largely been in spite of government policy rather than because of it.

Simon Michaels, the managing partner of BDO, thinks this should not be allowed to continue. “While the UK’s mid-sized businesses are worth more than the Mittelstand for the time being, there is so much more we can do to cement our position,” he argues.

For BDO, the answer lies in a range of more supportive policies, including a temporary reduction in employers’ national insurance contributions for manufacturers, changes to government procurement

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policies that allow departments awarding contracts to consider supply chain employment benefits as well as cost, and Vat concessions.

There is much to be said for this manifesto. On Vat, for example, Ireland has led the way by allowing suppliers to exporting firms to zero-rate the goods and services supplied. In the manufacturing sector lower energy costs have boosted businesses, but such is the slowdown in the eurozone economies that further help is needed if they are to get through 2015 unscathed.

While BDO’s recommendations will resonate with British firms they shouldn’t hold their breath, for we have been here before. Last year, the CBI published a comprehensive study into how Britain’s tax system is failing medium-sized companies, alongside a series of recommendations for remedying the issues raised. Its pleas fell on deaf ears.

Why should that be? In part at least, the problem stems from one area of performance where German companies are

still doing far better than British competitors: the cultivation of their image. Many of the Mittelstand firms are household names and are held in high esteem. By contrast, Britain’s medium-sized companies are largely anonymous.

The result is that policymakers tend to overlook the mid market in the UK. They spend their time cosying up to big business or launching eye-catching initiatives aimed at start-ups and entrepreneurs, whose rags-to-riches stories are more likely to be celebrated in this country.

That is not to say start-ups do not need support (though most would prefer a bit less of the cosying up at the other end of the scale). But if you want economic success and prosperity for all, the mid market is where the action is at. The CBI reckons these companies account for a sixth of all jobs in the UK and a quarter of private-sector sales. BDO claims its plans would add about £1.3bn to the contribution that medium-sized companies are able to make to the UK’s GDP.

ECONOMY WATCH

Battle

Whether it’s a government attempting to or geo-political gain - or a supermarket its shareholder profits - the rules of

T

HE Ukraine crisis has just celebrated its first anniversary. With Crimea annexed and back under Russian control, a surreptitious war in Eastern Ukraine with Russian-backed rebels rumbles on.

Western powers have responded to Russian aggression by imposing economic sanctions.

Economic sanctions can be viewed as the most extreme form of a trade war and are often just one step away from outright military action.

The Ukraine conflict represents a new frontline between the East and West with geopolitical tensions on a scale not seen since the Cold War. There are fears that the situation could escalate, with Russia potentially seeking to extend its sphere of influence into the EU via its new members Lithuania, Estonia and Latvia.

A lesser known conflict has been even more widespread and raging longer than the Ukraine crisis. These have been the so-called ‘currency wars’ that have followed the global financial crisis and the Great Recession. The term ‘currency war’ was given prominence four-and-a-half years ago when the Brazilian finance minister, Guido Mantega, aired his concerns about the weakening of the dollar. This followed the Federal Reserve’s biggest emergency economic stimulus in history and its $3.5trn quantitative easing experiment.

Speaking on September 27 2010, Mantega stated that “we’re in the midst of an international currency war”.

The Brazilian finance minister’s declaration of a currency war surprised the financial elite at the time, he explicitly mentioned a term that was largely taboo. Less threatening phrases such as “rebalancing” and “adjustment” to re-align exchange rates were frequently used instead.

Currency wars

Richard Ramsey

Chief economist Ulster Bank Deliberately weakening the exchange rate as a policy is not new. Two key sterling exchange rate events stand out. Firstly, on November 18 1967, Harold Wilson’s Labour Government devalued the pound, through a formally announced devaluation, in order to boost UK exports. This was at a time when sterling was in a fixed exchange rate regime. Secondly, 25 years later, Chancellor Norman Lamont, who was at the time being advised by none other than David Cameron, announced the UK’s exit from the European Exchange Rate Mechanism. The latter required the UK to keep the value of sterling within a range linked to the German Deutschmark. This occurred on September 16 1992 and became known as “Black Wednesday”.

Both of these events were transparent and involved public announcements. As such, they were humiliating for their governments at the time. The two examples cited above are examples of currency crises, or battles linked to one currency sterling. A currency war is a

16 BUSINESS MONTH 2 March 2015

rolling series of devaluations across a number of economies.

In a currency war, the central bankers are the generals who call the shots on behalf of their respective economies. The conventional weapon of choice is interest rate policy. More recently, unconventional weapons have been increasingly used, namely, quantitative easing (QE) and the introduction of negative interest rates (both deposit and lending rates).

Shots of QE and interest rate cuts have been used in recent years in an attempt to weaken currencies in order to effectively steal economic growth from other economies.

However, the effectiveness of these policies is limited if all economies follow the same strategy. Since January this year, 15 central banks have cut their interest rates. Denmark has recently been frantically cutting its interest rates to keep the value of the Danish krone down. Sweden’s central bank has introduced negative interest rates to discourage funds and weaken its currency.

The US and the UK, through the Federal Reserve and the Bank of England respectively, were arguably the most aggressive at the start of the currency war that began in 2010. As far as currency depreciation was concerned they both gained a first mover advantage against the euro. Sterling depreciated by a whopping 25% over the period 2007-2009. This was a period which saw the Bank rate lowered to a record low of 0.5% and the start of a £375bn QE programme.

Sterling and dollar weakness has aided the recoveries of the UK and US. Conversely, the strength of the euro and the yen during the period 20082013 hindered their economic recoveries. Now, however, both the ECB and the Bank of Japan are mobilising resources to stimulate their economies with massive QE programmes. In turn, this will weaken both the euro and the Japanese yen.

The battlefield of the current currency war has shifted. Sterling and the dollar in particular have been strengthening.

Meanwhile the euro and the Japanese yen have been under pressure. In effect, the currency war has gone full circle.

So what do the ongoing currency wars have to do with Northern Ireland? We may see an increasing number of Japanese car sales due to the competitive Japanese currency. Developments in the latest phase will adversely impact on Northern Ireland’s export performance with the eurozone and the Republic of Ireland in particular. From a sector perspective, our tourism and agrifood sectors benefited from the boost that a weak sterling/euro exchange rate provided. With sterling/euro currently at a seven-year high and set to push higher, those sectors that benefited from a weak sterling are likely to be collateral damage from the latest currency battle.

ECONOMY WATCH

fields

win a competitive advantage for economic bidding to increase market share to boost engagement remain essentially the same

P

RICE wars in the supermarket sector are nothing new. But in 2015, the battle of price is fought on new territory, with different terms and fresh contestants, triggering unprecedented change in the Northern Ireland landscape. Only a few years ago the battle raged over the growth of out-of-town large scale grocery retail developments, threatening the survival of the small convenience grocery stores.

But, the long-lasting impact of the 2008 economic recession and the growth of online shopping has forever altered consumer buying behaviour and arguably turned the tables. As price wars continue to rage in 2015, where is the battle really fought and who are the winners and losers?

Previous supermarket price wars involved special offers largely funded by local suppliers around one key product such as milk.

But, in January 2015, together Asda and Sainsbury’s fired the first salvos in a new year supermarket price war with the promise of £450m worth of cuts the price of essential every day items. In doing so, they hope this will thwart the plans of market leader Tesco.

In a new turn of events, this offensive involves supermarkets sacrificing some of their profit to drive sales, instead of passing all the pain to suppliers.

The rising popularity of buying essential goods online, the ability to click, collect, and top up at our nearest convenience store is also changing the territory for supermarkets and could render many out of town hypermarket retailers obsolete in their current form. Tesco and Sainsbury’s are both a case in point, currently undertaking major cost saving exercises. Leanness and agility is a central plank of the business models of discounters Aldi and

Grocery wars

Dr Karise Hutchinson

Head of business and enterprise at Ulster University Business School Lidl and only recently have the established powers of Sainsbury’s and Tesco have taken this threat seriously.

The internet, mobile shopping and the recession have not just changed buying habits, but fashioned greater consumer expectations. Once linear and one-directional, the customer journey in a world where we can shop anywhere, anyhow and anytime, is now a complex maze of possibilities that hinge around digital touch points.

While consumers will continue to seek value for money and embrace technology, price is not everything in this battle.

The challenge beyond the retail offer and price war is to create a supply chain network, product assortment and fulfilment that not only meets, but exceeds customer needs and wants.

Research suggests the buying experience is becoming just as important as the retail offer.

If the strategy of success is underpinned by speed, then the question in this battle is: who can respond and quick enough to win customer loyalty?

In the UK, the supermarket battle is over the squeezed middle market gnawed away

by Waitrose at the top and the rapidly expanding discounters Aldi and Lidl at the bottom. In Northern Ireland, the battle of the supermarkets has traditionally been fought by the big three (Tesco, Asda, and Sainsbury’s). At a local level, smaller convenience retailers including Spar, Mace and Costcutters provide an important retail offer and service and engage to some extent in price wars. But, Lidl has become the new challenger, launching luxury food items such as caviar and fine wines.

Attracting the interest of the middle-class keen to make their purse stretch further while also buying local food and products they enjoy, Lidl is now a strong player in the arena.

Other retailers like Poundland and B&M are also noteworthy contenders in this battle, expanding their grocery offer on the high street.

Some predict price will be the biggest ticket in town in 2015, sparking fiercer compe-

tition than ever before in the Northern Ireland grocery sector. Good news for consumers, but not if you are a supplier of one of the major supermarkets.

What about the supermarket contestants? The promise of lower prices to consumers may prove to be nothing more than a race to the bottom of the premier league. And, there is always the element of surprise. A new entrant like Amazon entering the fray could change the balance and outmanoeuvre current players in the market. While the battle of price may offer some shortterm gains for consumers, ultimately it won’t deliver the shift the average shopper actually wants in terms of service levels and convenience. After all, it is not only the shopper’s capacity to spend or the physical price tag of the item, but rather the time and effort it takes to make the purchase that counts.

Some argue this is a price war of smoke and mirrors, whereby supermarket retailers simultaneously cut prices of one product and increase the price of others to compensate, disguising the real issues at stake. On one hand, equity investors are worried about the impact of declining industry sales volumes and declining gross margins damaging the sector’s prospects for attracting investment in the future. On the other hand, the steady decline of the weekly shop could render out-of-town supermarket destinations obsolete.

Survival for retailers will depend on the capacity for long-term change: the ability to speed up decision-making, change the culture of business and develop an entirely new grocery business model. In a time of unprecedented uncertainty there is only one sure thing, change is here to stay.

Additional research by Laura Laird

2 March 2015 BUSINESS MONTH 17

COVER STORY

THE GEEK EMPIRE Hugh Cormican of Cirdan Imaging tells Audrey Watson how creative intellects are the new wealth creators

E

NTREPRENEUR Hugh Cormican once said: “Physicists have this reputation for geekiness, but things have moved on — the geeks mostly run the world now.”

The award-winning businessman made the quote to New Scientist magazine back in 2007. Almost eight years on, his words still hold true and the technology and innovation sector is one of Northern Ireland’s biggest business success stories.

Mr Cormican (52) is founder and CEO of Cirdan Imaging, a Lisburn-based company which designs and supplies medical imaging solutions for the diagnosis and treatment of cancer in surgery, radiology and pathology.

The company recently announced a £500,000 investment from Kernel Capital which will aid increased exports, further product development, and expansion into emerging markets such as the

Asia Pacific and Middle East.

“It’s not so much geeks,” he laughs, referring to the New Scientist article. “I think that people with creativity and intellectual and innovation skills now have the opportunity to use and develop an idea to create a lot of wealth for themselves.

“Before, you needed a lot of wealth just to be able to create wealth, or you needed to be in a place that had a lot of natural resources.

“It wasn’t easy to start a business. The environment is so much better now.”

To say Mr Cormican is experienced in the area of business start-ups is an understatement.

After gaining a degree in laser physics at Queen’s University, Belfast, he was studying for a PhD when along with colleagues, he used his physics know-how to build a highly sensitive digital camera.

After using the camera in various imaging applications they found it was being

18 BUSINESS MONTH 2 March 2015

requested by researchers in other departments and other universities. In 1989, with capital investment from Qubis Ltd, the university’s business incubation unit, Andor Technology was formed to take advantage of these requests and to develop the camera into a commercial product for use in scientific research.

Five years later, in 2004, Cormican guided the company through a stock market listing on the Alternative Investment Market (AIM), which is designed for smaller businesses, and Andor grew from university spin-out into a west Belfast based global operation employing 300 people, with offices in the USA, Europe and Japan.

However, Mr Cormican stood down as CEO in August 2006, before resigning from the board in September 2007.

He spent time in America as CEO of US-based imaging technology firm Bioptics, before returning to Northern Ireland and setting up Cirdan Imaging

in May 2010 — another Queen’s spin-out, but one in which, since 2012, the university has held an equity stake.

“Queen’s University is one of the world’s leading centres for cancer research, and through collaboration we can help bring the benefits of that research to impact on patient’s lives in considerably shorter timescales than occur elsewhere in the world,” he says.

“The collaboration involves research to develop imaging equipment using X-rays and near-infrared fluorescence to help in the detection, diagnosis, and treatment of cancer.

The devices will be used to better discriminate between healthy and malignant tissue in diagnostic procedures and cancer surgery.

“It makes a lot of relationships easier,” he adds of the QUB involvement. “It means we are not just seen as a totally independent company. Quite often universities can have concerns about collaborating

Allen Martin, senior investment executive at Kernel Capital, Hugh Cormican, chief executive of Cirdan Imaging, William McCulla, director of corporate finance at Invest NI and Gillian Sadlier, senior business manager at Bank of Ireland

with businesses. Concerns such as who is going to benefit most? Do they just want our technology? Or our people?

“When the university is a shareholder, those initial fears and barriers are overcome.”

Also in 2012, Cirdan was one of only two beneficiaries of the first Invest NI equity fund, Co-Fund NI, which gave the company an almost £170,000 injection.

Despite Cirdan’s success, Mr Cormican admits to feeling sad when, in early 2014, Andor was taken over in a £176m deal by rival firm Oxford Instruments plc, a spin-out company of Oxford University.

“I was very disappointed,” he says. “But being in the public market is a bit like being in the Premiership — you’ve got to deliver and you’ve got to get results, keep going forward and keep getting those results.

“If you stumble, or it looks like you are standing still and sitting on your laurels, it’s very easy for another company to

swoop in.

“If you have a business that is growing fast and has a clear strategy that is delivering, nobody else can buy you.

“Unfortunately, I think the board on Andor weren’t growing the business and keeping up the pace — which is one of the dangers of being in the public market.

“You’ve got to be able to compete and hold your own and show shareholders that you can deliver returns.

“The board have to have the expertise and experience to deliver on that and communicate that to shareholders.

“If that had been the case, Andor would have remained a public company in its own right.”

Mr Cormican won’t be pinned down on his exact reasons for leaving.

“There’s never a single reason for doing something,” he says. “There were directions I was keen to follow, but I wasn’t sure about the other board

members. Maybe some people feel that the way I do business is too aggressive, but I don’t feel that it is.

“You need to break into new areas and territories and if you are not willing to expand, then it’s hard for a company to keep a strong growth record.

“Too many start-ups don’t view their business as a lifetime’s work, they grow it to a certain level and then sell it off and move on and do something else.

“To keep growing and developing a business is a lifetime’s work. There are some people in Northern Ireland who do just that, such as Peter FitzGerald of Randox Laboratories.

“He is someone who will never be happy just to maintain his company’s position, he will continue to grow and develop it.

“We need more business leaders like that.

“Northern Ireland has a wealth of talent in the technology sector and we have a great

education system that supports and develops this talent into business opportunities.

“Of course, there’s always a way to do more and I’d like to see us retain more of the businesses that start here, rather than seeing them being sold and swallowed up by a larger external company.

“We may have the tech talent, but we don’t have the reservoir of experienced board members – people who have perhaps worked in public companies and grown and developed businesses and have the skills to keep things moving on and maintain the company’s ability to be able to stand alone and hold its own.

“Many businesses are nervous of floating on the stock market. There’s not enough experience of it here and there is a mystique surrounding it, which is misplaced.

“Flotation can bring new liquidity and the advantage of

Turn to page 20 >>

2 March 2015 BUSINESS MONTH 19

COVER STORY

Hugh Cormican is founder and CEO of Cirdan Imaging << Continued from page 19 new investors and the major benefit of a raised profile.”

Andor is now facing a possible 18 job losses as Oxford Instruments grapples with a profits slump due to difficulties in its Russia and Japan markets.

Did the experience with Andor make him nervous about setting up another business from scratch?

“Part of me sort of thought …

‘Well, if I have to …’” he laughs.

“But Andor wasn’t a fluke — I knew it could be done and I needed to do it again.

“I’ve never lost my enthusiasm for technology. Business is a nice environment and good fun, but technology is my passion. And the real buzz from developing technology is seeing it being used.

Mr Cormican manages to balance an understanding of the technical side of Cirdan with business acumen. “I like to spend time in the lab with my sleeves rolled up, but I also like to get out and meet people.

It’s not a chore. I still think it’s one of the best jobs in the world.

Originally from the Newry direction he describes himself as “a bit of a gypsy” when it

comes to his roots.

“I spent my formative years in Mayobridge,” he says. “My father worked in Customs and Excise and we travelled around quite a bit spending periods all over the UK. “Although both my parents were civil servants, they had a really active interest in science and bought me my first telescope when I was very young.

“Their interest was passed down to my brother, sister and I.” His gypsy days long gone, he now lives near Lisburn with wife Anne, a maths teacher, and their three children, James (21), Ruairi (16) and Ciara (14), and when he can enjoys scuba diving with his local club and also abroad with the family.

“I had actually always wanted to go into business from the age of 16, when I was a pupil at Abbey Grammar School in Newry. But I thought it best I should get a degree and physics had been the subject I enjoyed most at school,” he says.

“It was a subject that for me was more about problem solving than learning.

“However, nowadays when I’m travelling abroad and have to fill in forms where one of the questions asked is, ‘What’s your occupation?’ I always

20 BUSINESS MONTH 2 March 2015

write physicist, not businessman.

“At heart, I’m definitely still a bit of a geek — a gadget freak,” he laughs.

Since its inception in 2010, Mr Cormican has been determined to keep Cirdan moving forward — and independent. It is, for him, at least, a lifetime job.

“One thing you always need to think about is succession planning,” he says. “Lifespan limits mean that it’s not going to be humanly possible for me to take the company to where I hope it will eventually go — but certainly I can help it on its way.”

In 2012, Cirdan acquired the intellectual property and assets of the Centricity Laboratory Division of American company GE Healthcare IT. As part of the acquisition, it took on responsibility for the support of customers using the Centricity Laboratory Information System (LIS) across North America, Asia Pacific and the UK. “We had developed the way of capturing images, but knew that there also needed to be a way of attaching relevant information to those images and extracting relevant information from those images,” says Mr

Cormican. “We were working on developing software to do just that when we heard that GE Healthcare were looking to get rid of a particular piece of kit called Ultra.

“We saw the opportunity to acquire that software.

“Ultra is a product that has been around for a while now, but we took advantage of that opportunity, bought it and have further developed it for the 21st century. Now, when you have the image, you also have the context — who is the patient? What is their condition? What are the analytics?

“Acquiring Ultra was a great move for us and a great way of accelerating the business.”

Mr Cormican has never revealed the amount paid for the GE division, but it’s understood its existing customers pay software support and maintenance fees of several million dollars every year.

When it comes to securing investment, he says that for Cirdan in particular, this hasn’t proved difficult.

“We haven’t had a problem, but we may not be typical of everyone. We’ve been well supported by investors and by the banks,” he says.

“There is money out there looking for projects, and

opportunities to invest with tax-efficient schemes. Invest NI have done quite well in setting up an infrastructure and environment in Northern Ireland that enables businesses to obtain funding.

“The economic environment for new businesses is currently the best it’s been for a while.”

As well as Cirdan, which employs more than 20 people at its Lisburn HQ and also has offices in offices in Australia and Canada, Mr Cormican also sits on the board of another QUB spin-out, Causeway Sensors Ltd, which develops, manufactures and sells complete sensing packages, consumable biochips and software and develops solutions for applications in cell biology, microfluidics and nanofluidics, physics, chemistry, cell and particle studies. Its customers include biology laboratories in academia, institute laboratories and diverse industry.

A fellow of the Institute of Physics, in 2000, Mr Cormican was awarded the Paterson medal and prize for commercialisation of physics in recognition of the success of Andor.

And in 2003, Queen’s conferred on him an honorary Doctorate

of Science for services to business and commerce.

In 2011, Mr Cormican was awarded the NISP Connect Innovation Founder of the Year Award, in recognition of his entrepreneurial talent and achievement in the area of scientific technology.

He is also hugely enthusiastic about the importance of the Northern Ireland Science Park (NISP) to the technology sector in Northern Ireland.

And the way forward for Cirdan?

“My desire is to continue to develop technology to improve medical diagnosis,” he says.

“We very much want Cirdan to continue as a growing company and become recognised globally for what it does.

“When the time is right, we would like to take the company public, like we did with Andor, but at the same time, continue to deliver a clear strategy for growth and expansion and the development of new technology, making it difficult for an outside company to take over.

“You could stay a small private company here in Northern Ireland, but not growing your market and not growing your business, seems such a waste.”

Hugh Cormican (above, with an Andor camera) said that when the time is right he would like to take the company public, as he did with Andor

2 March 2015 BUSINESS MONTH 21

NEWS ANALYSIS

Joining the in crowd Alan Watts explores crowdfunding as a way of investing money

I

N the 19 century, Edward Lytton coined the phrase ‘the great unwashed’ to refer, in a rather derogatory manner, to the lower orders, ie the majority of the population. You can argue whether today we still have a working class, but it’s a pretty fair bet that most of them do, at least, wash.

However, we now have a new crowd, certainly in financial circles, and they invested £1.7bn in crowdfunding in the UK in 2014 — regardless of their personal hygiene. But what do we really know about this new order?

Well, actually we are starting to know quite a lot.

For a start, the crowd are mostly men. Only 14% of those investing were women — and for lending, the figure was still only 17%.

And they are mostly men of a certain age. The lion’s share of crowd funding is Peer to Peer (P2P) to either businesses or individuals and here over 55% of the lenders are 55 or older. However, in the fastest growing sector, which is equity funding, the average age of the investors is only 40 (which is actually only three years older than the average age of those wanting to raise money.)

And we all assume that the crowd are very small investors.

Certainly you can invest as little as £10. There are many stories of what are known as lunchtime investors who stick a tenner on a company in the same way as they might do on a horse. However in reality, in equity, over two-thirds invest £1,000 or more which is a bit more serious. Although in contrast to this, around 60% of the investors had no previous investment experience and would fall into the category described as ‘retail investors’.

Now let’s turn the microscope round and look at the results of all this funding.

The average UK crowdfunded share deal is for almost £200k involving 125 investors.

This amount per deal is very

More people are getting involved in crowdfunding close to that for traditional angel investing, but with probably 20 times the number of shareholders. However, if you have an efficient means of managing this large group over time, as the platforms claim, then this isn’t a problem. And in fact, it can be an advantage as this is a useful group for both providing market response and product feedback.

In P2P, borrowers receive an average of £73,000 from a whopping 796 lenders. This is a sign of a very efficient marketplace where lenders’ risks are spread over many deals. And

22 BUSINESS MONTH 2 March 2015

since the average interest rate received by lenders was 8.8% at a time when banks are paying a pittance — well why not?

There are a couple of other very useful trends from a Northern Ireland point of view.

We provide around 1% of the crowd money but receive, as a region, 4% of the investment and 3% of the lending.

So our lot have been quick to see the potential and there is a net flow of money into NI. And surveys show that only around 40% of people know about crowdfunding with only 14% having tried it. So there

remains big potential for all of these figures to increase a lot.

Indeed, equity crowdfunding is growing at over 400% pa.

So now we know quite a lot more about the crowd, although their cleanliness remains a bit unclear.

But to mis-quote a phrase which also has a Northern Ireland angle, they clearly won’t go away, you know.

Alan Watts is the director of Halo, the NI business angels network.

More information can be found at www.haloni.com. Alan can also be contacted through this site.

BREAKING THE MOULD

Championing SMEs

Kirsty McManus speaks about starting off in business

Name: Kirsty McManus Company: University of Ulster Job title: Director of the centre for SME development I got into business and SME support because...

Anyone who has met me will know that I am passionate about supporting SMEs. I enjoy the challenge of working closely with them, helping them build their businesses and dealing with the challenges in their sector. I see my role as a champion for SMEs, to ensure we have the right conditions in Northern Ireland to help them grow and prosper.

Our SME centre at the Ulster University Business School is committed to providing the tools and skills to enable our local companies to complete in a global economy. Any SMEs reading this article, if we can be of assistance to you then please do get in touch, I would be delighted to hear about your business and how we can support you.

I haven’t always done this...

I graduated from in IT from Queen’s University, Belfast, and then emigrated to California to work as a project manager for six years. I worked in Silicon Valley during the dot com boom and bust, which was a once in a lifetime experience.

Working in America was an immense learning curve. Dealing with different cultures and gave me a wealth of international experience that I could utilise in future roles.

I returned to Northern Ireland to complete my MBA at the Ulster University Business School and then began career working at the Confederation of British Industry and Ulster Univesity Business School.

The best thing about my work is...

My career challenges me every day in different ways. No two days are the same. I enjoy the interaction between the academic life and the commercial world. I enjoy being able to provide assistance to

Ulster University Business School’s SME centre aims to help Northern Ireland firms compete in a global economy these companies whom I work closely with and take pride in seeing the transformation in their business. I also have a privileged role in working with our young people to encourage them to start their own business.

The person I take inspiration from...

As a proud Derry woman, you will not be surprised that I say my mother. She has instilled in me a sense of social responsibility and helping others. My mum has recently recovered from a critical illness and this has been a stark reminder of what really is important in life.

She inspires me every day and has made a real impact on so many people’s lives.

24 BUSINESS MONTH 2 March 2015

I’m also very lucky to have a close-knit group of friends who support and encourage each other.

My advice to anyone starting off in business is...

No man is an island, as they say. The best leaders out there know when they need help, and they know where to turn to in order to get it. Nobody can know everything, so finding someone you trust for advice when things get tough can make all of the difference. I’m very fortunate to have a group of informal mentors who offer me free corporate therapy.

Which brings me on to my final point which is to have faith and courage. My point

here is for you to believe that when you jump off the cliff, having followed your dream and decided to take a risk, the landing will be a soft one.

Also, remember that very few things are set in stone and that life can have many different chapters. It’s a cliché, I know, about doors closing and others opening, but I’ve found it to be true and it’s only when you’ve really committed yourself to something and given up other, perhaps safer, things that you really start to see those new opportunities.

If you get a chance, take it. If it changes your life, let it. Nobody said that it would be easy, they just promised it would be worth it.

AND I’LL TELL YOU ANOTHER THING...

Learn the language

Harry McDaid, of Ulster Community Investment Trust, shares some secrets of his success and why he thinks self-development is the key Name: Harry McDaid Company: Ulster Community Investment Trust Title: Chief Executive

will ultimately be the winners, so long as they bring with them a professionalism and understanding of business that their customers deserve.

My first job was....

Aged 15 as a waiter in the Derry City Club. I was the youngest in a family of eight and as soon as we were economically viable we were expected to work — no complaints there. Bar work taught me a great deal about human behaviours, customer care and the integrity of working in a cash business. Nowadays when I look at the CVs of young people applying for jobs I am impressed by those who have worked to help finance their education. It demonstrates a resourceful attitude, a willingness to work hard, discipline and motivation.

The business person who taught me to succeed was…

No one person — I watched and learned from many.

There’s the old line about the young guy telling his boss: “I have plenty of initiative but no one has told me what to do with it.” The onus has to be on self-development. If you want to succeed you must seek out opportunities and do it yourself. Thirty years ago I came into contact with the concept of continuous performance improvement and I have worked with that every day since. It is important to take time to develop the skills and the vocabulary required to work in your chosen field. Every career has its own language, be it in law, medicine, finance or business.

To effectively understand and communicate at the top level of business and in the process influence others, one must first get the vocabulary right.

My business mantra is…

Make a difference to the business you are involved in.

During my time in banking I insisted when recruiting that we not employ someone simply to add to numbers or fill space.

There should be no compro-

In 10 years the world will be…

Different. In the banking world the progression of digital banking will continue, as new services and products come to the market. It is likely that this will make banking a more competitive sector to be involved in.

The next generation are very comfortable with the digital provision on offer and we are heading towards an increasingly cashless society.

My one business regret is…

I have no business regrets. I enjoyed at least part of every day I worked in banking and the same can be said for my time now with UCIT. As UK director of credit in the bank, I was responsible for €20bn of loans. In my current role, that number is slightly reduced to £12m and I’m enjoying every minute of it. One has to know when the time is right to exit a primary career and find an alternative that represents a fresh challenge but takes account of one’s stage of life. UCIT makes a real difference to communities basically enabling them to enable themselves. Many of the projects we work with wouldn’t receive funding through traditional lending channels.

Self Development plays a crucial role in business mise in recruitment. You must hire someone who will genuinely make a difference to the business. Only then will competency be built, skills developed and performing teams formed who will ultimately differentiate the business and facilitate its growth.

It’s all changed since I started out…

It certainly has. When I joined the Bank of Ireland in 1970 it was to post ledgers and run daily batches — great fun as most ledger clerks were

26 BUSINESS MONTH 2 March 2015

ladies! No one over the age of 20 was permitted to enter the “service” of the banks and ladies still retired on marriage — so career competition was relatively limited. We have seen changes in processes, systems, governance, regulation, reporting structures, selling products and services, delivery channels — basically everything. One thing has remained constant and that is that banking is essentially a people business and those banks that most quickly reattach themselves to the communities they serve

My one piece of business advice is…

Concentrate on your customer’s needs and build a team which can deliver them.

Without customers you don’t have a business. Set out clearly what you want to achieve and allocate responsibilities within your business. Ensure your people feel valued and there are many ways to do this.

Create a learning organisation and invest in developing skills.

There is no such thing as one piece of business advice.

I couldn’t start the day without…

Getting up.

SME WATCH

Best bites

Amanda Ferguson talks to William Bullock of Grace’s Irish Biscuits about his world domination plans with shortbread and other delights

Taking the biscuit: People love to dress up to celebrate St Patrick’s Day

28 BUSINESS MONTH 2 March 2015

A

S Irish people at home and around the world get ready to celebrate St Patrick’s Day later this month, it’s remarkable to learn that shamrock-shaped shortbread sold the world over is made right here in Northern Ireland.

William Bullock from Donaghadee, the managing director of Grace’s Irish Biscuits, told Business Month why the tasty products made at his family firm are “the best” and of the plans he has for the small but ambitious firm.

“It is the best shortbread in the market,” William said.

“People have to try it.”

William’s background in business included being one of the first people to bring Air Miles to market back in the 1990s. He also worked for Unilever.

Then in 2009 he set up Grace’s Irish Biscuits, named after his daughter, as he wanted to develop an “Irish icon” from the Balloo industrial estate in Bangor, Co Down.

“I thought we in Northern Ireland really needed to see if we could produce an Irish icon,” he said.

“We have got an Irish icon in Bushmills and also in Baileys.

“An Irish icon in my view is a product sold all over the world.

That is what we want.

“Walkers is the benchmark for shortbread, it is Scottish and it sells all over the world.

“It was my considered opinion that Ireland, we were a bigger brand than Scotland.

“That could be debatable but what Walkers sell in my view is the tartan. Go to any airport in the world and you will see the tartan so I thought we should go into the marketplace with the shamrock.”

William champions Ireland as being one of the “biggest brands in the world” and is keen to capitalise on international affection for our shores.

“We have got St Patrick’s Day which is growing year by year,” he said. “A lot more countries are celebrating it so with that in view and the experience I had with the Unilever the food company I launched Grace’s Irish Biscuits.

“We in Northern Ireland in particular have a reputation for producing some of the best food in the world.

“We use Ballyrashane butter in our products. It really does make a difference.”

Grace’s Irish Biscuits are baked in two bakeries located in Dromore and Portadown.

“Bangor is our central distribution,” William said.

“We go to Tesco, Sainsbury’s and so on. We are in America, Germany, Japan, Spain, we are starting to get quite a good reputation and our exports are now 60% of our turnover.”

The products are distributed to a variety of stores from supermarkets to airports.

“We have a range of products,” William said. “Rory’s is designed for the budget market. It sells very well.

“Grace’s is very much of a niche market. We are in all of the airports which we do fantastically with. We have shortbread, oatmeal, chocolate chip, double chocolate chip sold in supermarkets here and we export as well.”

Biscuit fans have given the tasty treats the seal of approval

Grace’s Irish biscuits have been growing in popularity as have food judging panels.

“We just won a double gold for the oatmeal biscuits at the Taste awards,” William said.

“We have also brought out Grace’s Irish fortune cookies and we are bringing out a chocolate-enrobed shortbread.”

William has big plans for the future.

“Our business is growing pretty rapidly,” he said.

“Wherever we are sales are increasing and the export potential is good.

“We need to capitalise on what we have done so far.

“We are into America and now into Australia. Spain is growing at a good rate.

“We want to turn Grace’s into an Irish icon, as many countries as we can get the products into.

“That is what Northern Ireland needs. We need to be producing and exporting. That is where we need to focus.”

For more information visit www.gracesirishbiscuits.com

2 March 2015 BUSINESS MONTH 29

ASK ASKTHE THEEXPERTS EXPERTS

I am a small business owner who had 20 employees in my Paye scheme as at April 2012. What is my staging date and what are my pension requirements/legislative responsibilities?

LR: Your staging date will be at some point between 1st November 2015 and the 1st April 2017. The exact date will be dictated by your PAYE reference number and you should contact the Pensions Regulator to confirm your staging date. The staging date is when your legal duties initially affect you and oblige you to enrol some or all of your workers into a qualifying pension scheme.

You should start making plans in good time as there may be costs to consider.

These might include the cost of setting up the scheme, obtaining the correct software to manage automatic enrolment and any independent advice you might decide to take.

If your initial assessment of your workforce identified that you have any staff which are eligible for automatic enrolment, you’ll need to put a pension scheme in place and enrol them into it.

You will need to choose an automatic enrolment scheme that will provide a good outcome for your staff. You must have agreement from the pension scheme you’ve chosen that, from your staging date, it will be ready to accept all the staff you need to enrol.

If you have a pension scheme in place, you must review it and decide whether or not you wish to continue using it. The law relating to automatic enrolment means all workplace pension schemes must meet certain conditions based on the contribution rates.

At your staging date you should identify the staff who need to be automatically enrolled and also those who have a right to join the scheme if they wish to do so. You must then write to your staff to tell them how automatic enrolment has affected them.

Finally you should complete a Declaration of Compliance which confirms to the Pensions Regulator that you have fulfilled your legal duties.

Luke Robinson, Financial adviser at ASM

Conor Devine Principal at GDP Partnership

Brian David Horner M&D Financial Management Ltd (Independent financial advisers)

Sound advice can be a valuable commodity We put your questions to the experts with the answers

My property loan has been sold to a private equity fund — what should I do?

CD: First of all I’ll say you are not alone. In the last 12 months over £35bn of property loans have been sold by Irish banks, which have affected hundreds of businesses across the island.

Automatically you will have a number of concerns. How should I approach this company and will they be supportive of my business and me?

Loan trades are now huge business and the private equity firms who specialise in this space generally work to three to five or seven year business plans, whereas most business owners in Northern Ireland are used to working with their banks over longer term facilities like 10/15 years.

If you find yourself in this position you need to be well prepared.

The new owner of your loans will want to understand very quickly how you propose to pay them back. This maybe particularly tricky to do and more importantly it requires you to ascertain the options open to you.

You will have to quickly identify a capital partner or partners.

Local banks might able to assist in some capacity — however it is probable that you will require an additional capital partner to come up with a more creative

I have heard from other business owners that strategies can be implemented to reduce the overall cost of workplace pensions and automatic enrolment. What are these and how can they help ?

BDH: Two key cost saving strategies you should consider as an employer are ‘postponement’ and ‘salary exchange’.

Postponement is how it sounds — you postpone commencing contributions for your staff up to a maximum of three months. This can be utilised at your ‘staging date’, on an employee’s first day of employment or when an employee first becomes eligible for automatic enrolment. Essentially you can save up to three months’ worth of employer contributions for those ‘eligible’ staff at outset and future newly eligible members of staff.

Salary exchange (SE) is a method of pension funding whereby an employee agrees to exchange part of their salary to fund a pension from gross earnings. The result is that both parties, the employer and the employee, save National Insurance Contributions (NICs). Pension contributions therefore cost less for everyone.

From experience, SE can save a business thousands of pounds on a yearly basis. The savings for the employer are exacerbated when the minimum compulsory contribution percentages increase in October 2017 and 2018. As an example, based on the minimum percentages applicable from October 2018, the employer saving on pension contributions for an individual utilising SE equates to 18.57 %.

Regulatory documentation is required for both of the above strategies.

It should be noted that implementing SE without the assistance of an independent financial adviser (IFA) is difficult. Staff typically require advice on SE as it can affect their entitlement to, as an example, state benefits.

Other financial professionals such as accountants cannot typically provide advice to staff regarding pensions and strategies such as SE. I would recommend that you engage a local IFA who can assist with all of the above and your overall responsibilities and duties in relation to workplace pensions and automatic enrolment. finance package. There are a number of specialised people in this arena however I would advise you to look hard and fast

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

30 BUSINESS MONTH 2 March 2015

at the options and engage as soon as possible to ensure you stay in control of your assets and your business.

INSIDE REPORT

TURNING THE For decades companies have been ‘off-shoring’ jobs to developing nations in a bid to drive down costs, but is this trend being reversed? Paul Gosling investigates

TRENDS move in one direction, but often then turn again. So it is with off-shoring.

Back in the 1990s and early 2000s, many companies saw the opportunity to cut costs by transferring production away from the developed economies, to developing nations. Nowhere benefited more from this than China, with its low labour and other production costs. By the beginning of the 21st Century, a quarter of Western European manufacturing was produced off-shore, while half of all US manufacturers off-shored some production.

But things have changed. China is no longer as cheap as it was, with wages often rising at above the inflation rate of the West.

When oil costs soared — before, more recently, going down again — much of the savings from lower wages were eaten by high logistical costs.

And then we had ‘just in time’ stock management systems adopted more widely. How could stock be managed effectively if it took weeks to receive ordered goods? And buyers were forced into making guesses about how fashions would change, many months ahead.

32 BUSINESS MONTH 2 March 2015

Move the clocks forward a few years and the trend has moved into reverse. Where we once had ‘off-shoring’, now the focus is more on ‘re-shoring’ and ‘near-shoring’. The prime example is manufacturers in the United States that have pulled production back from China to nearer countries, where it is quicker to bring goods to market, yet costs are still lower than within the US. Mexico, in particular, has benefited.

But even this is not the end of the story. The latest survey by AlixPartners of the ‘re-shoring/ near-shoring’ market has found

that many US companies find even Mexico too far away. More manufacturers are now quoting rising labour costs, supply management challenges, shortages of skilled labour, quality control and regulatory and distribution problems as factors leading them to move even closer to home — within the US. That near-shoring movement has accelerated much faster because of cheap shale oil and it is one factor behind better than expected employment figures in recent months.

It is plausible that Northern Ireland could similarly benefit from the ‘near-shoring’ process,

TIDE ON JOBS

with UK companies pulling activities out of far away locations where they have insufficient control, over to Northern Ireland where costs are lower, yet it is easier to manage operations.

In fact, this process has already begun.

Arkk Solutions is a London-based financial regulatory and compliance software company, which has just set up a small operation in Belfast. The office will initially employ only 10 staff — but that is not the significant point. Rather, the significance lies in the fact that the company has opened the office in Belfast in place of one in India.

The company provides software services in the XBRL and iXBRL languages that are in-

creasingly being used to tag, understand and report data, including for the filing of financial information for tax and regulatory purposes. There is an availability of skilled software engineers in Belfast to undertake the work, just as there is in India.

Arkk Solutions’ founder and CEO Richard Metcalfe explains the attraction of Northern Ireland: “We read in the press about a lot of firms moving to Belfast a couple of years ago and this seemed like an interesting option for us,” he says. “We had started to have misgivings over our operations in India — costs were starting to rise whereas productivity wasn’t, so we needed to find a solution that would work well for the company.

“We hired someone in Belfast who we thought would be a great team lead, so strategically we had been considering the move for some time. With the support of Invest NI who granted us £45,000 from their Jobs Fund we now have an office for 10 employees — seven currently hired — and we already think it isn’t big enough.

“Over recent years there has been vast investment in Northern Ireland, particularly in education and the technology sector. This has helped foster a spirit of entrepreneurship, IT innovation and product development — these are all things that complement Arkk Solutions and echo our rapid growth.

“Having our operations based

within the same time zone as the majority of our clients allows us to be nimble and to be able to respond to our clients’ needs immediately. This, coupled with low office rents, labour costs that are lower than in many UK regions and the fact that the majority of our clients are based in the Republic of Ireland, UK and mainland Europe makes the move to Belfast a low risk and very attractive proposition.”

Nor is Arkk alone. Last year mobile phone company EE — which is currently being bought by BT — reshored about 1,000 jobs from the Philippines.

Around 250 of those jobs will be relocated to Londonderry.

CONTINUED ON P34>>

2 March 2015 BUSINESS MONTH 33

INSIDE REPORT <<CONTINUED FROM P33 Dr Esmond Birnie, chief economist for PwC in Northern Ireland, believes that this process of near-shoring could be an important economic trend. He says: “A year ago, PwC published our economic outlook at a UK-wide level. We said that by the middle of the next decade, near-shoring could potentially generate 100,000 extra jobs in the UK, mainly in manufacturing, but also in business services.

“We see opportunities in textiles, clothing, computer and electronics manufacturing and in business services. We did not do any forecasting at a regional level, but I suppose Northern Ireland should get at least a pro rata share of that, so that would be 2,500 to 3,000 extra jobs by the middle of the next decade.

But this is subject to Northern Ireland getting the policy right, as with so many other things in the economy.”

The prerequisites, suggests Dr Birnie, include improving our transportation infrastructure, cutting our energy costs and ensuring that we have the right skills base. But our low labour

Near-shoring could create up to 100,000 manufacturing jobs in the UK over the next 10 years costs and good digital infrastructure provide Northern Ireland with particular advantages in competing for nearshored jobs, he explains.

Many international companies that are ‘re-shoring’ — bringing activities back, closer to home — have specific concerns driving their relocations, adds Dr Birnie. These include fears of politically inspired disruptions

34 BUSINESS MONTH 2 March 2015

and electricity supply anxieties.

But logistics is another major worry. So Northern Ireland is in a weak situation in competing for nearshored activities if it cannot improve transport connectivity, including a wider range of air routes, he argues.

Despite this, the narrowing gap between wages in countries such as China and India with those of the UK, have in particular under-

mined the traditional off-shoring business model, believes PwC. PwC points to a survey carried out in 2013 by the Manufacturing Advisory Service Barometer which found that 14% of businesses have already reshored some of their activities, with companies now more likely to ‘near-shore’ than to ‘off-shore’. Northern Ireland just might be in line for a big bite of this new cake.

TICKERS

This month’s local indicators at a glance Ulster Bank chief economist Richard Ramsey gives a rundown on the lastest key pointers LAST month’s labour market statistics contained a raft of encouraging unemployment headlines. In terms of claimant count unemployment (which measures those individuals in receipt of means tested unemployment benefits), Northern Ireland extended its winning streak of falling unemployment to 25 months.

Furthermore, January’s monthly decline of 1,700 claimants marked the largest decline since May 1999 (-2,200).

Northern Ireland’s claimant count stood at 48,200 in January, which is the lowest level in 69 months (April 2009).

Northern Ireland’s claimant count has now fallen by 10,300 (-17.6%) over the last year and by 16,600 (almost 26%) since the peak in December 2012 (64,800). As a result, 40% of the cumulative rise in unemployment that occurred following the downturn has been recovered. Northern Ireland’s Labour Force Survey (LFS) also included a variety of positive unemployment headlines. The International Labour Organisation (ILO) unemployment rate eased to 5.7% in Q4 2014

and remains in line with the UK rate. This represented the lowest unemployment rate in 71 months.

The number of ILO unemployed fell by 3,000 in the latest quarter to 50,000. This compares with a peak of 72,000 in the three months to January 2013. The younger generation has borne the brunt of the recession as far as the labour market is concerned. Having peaked at 25% in Q3 2013, the unemployment rate for those aged between 18-24 years of age has remained stubbornly

high. Encouragingly, however, the latest figures reveal a fall in Northern Ireland’s youth unemployment rate to 17.8% in Q4 2014 — a 34-month low.

Whilst unemployment inequality based on age remains a major policy concern, there has been a significant convergence in the unemployment rate inequality between males and females. The male-dominated manufacturing and construction industries bore the brunt of the job losses during the downturn. This gave rise to the term ‘mancession’ with

the male unemployment rate peaking at 10.5% in early 2013.

Conversely, female unemployment peaked at 6.4%.

The year 2014 witnessed a dramatic decline in the male unemployment rate which stood at 9.3% in Q1 2014 and has fallen to 6.1% by Q4 2014.

The latter represents the lowest rate in over five years and is just 0.7 percentage points above the equivalent rate amongst females (5.4%).

This represents the narrowest differential in unemployment rates in over seven years.

The latest Northern Ireland Residential Property Price Index (RPPI) reported its seventh successive quarter of price rises.

Residential property prices increased by 1% q/q in Q4 with prices some 8% higher than the corresponding period in 2013.

Northern Ireland’s residential property prices recorded a peak-to-trough decline of 57% between Q3 2007 and Q1 2013.

Prices have subsequently risen by 13%.

From a wider economic

perspective, the continued rise in transactions is a more significant signal that the recovery is strengthening. Residential property transactions increased by 22% in 2014. This took the volume of transactions to a 7-year high.

Transactions remain half of the level in the ‘freak peak’ that was 2006 and 30% below 2005’s more ‘normal’ levels.

Further growth in house prices, and more importantly transactions, are expected in the year ahead.

UK consumer prices posted their lowest reading on record with an annual rise of just 0.3% in January.

This compared with the 0.5% year-on-year rise in December. Food prices fell by 2.7% y/y in January, the steepest annual decline on record.

UK food prices are now at their lowest level since November 2012 and have fallen by 3.1% since last February.

Transport fuels and lubricants (petrol and diesel) recorded a record annual decline of 16.2% last month with prices down

almost 23% since their April 2012 peak. Household utility bills fell last month by 2% yearon-year.

The Monetary Policy Committee (MPC) estimates that two-thirds of the gap between the current inflation rate and the 2% target rate is explained by sharp falls in food and energy prices. Further falls in CPI are expected.

Beyond this short-term, consumer price inflation is expected to rise back towards 2% (the MPC’s target rate) by Q1 2017.

36 BUSINESS MONTH 2 March 2015

BUSINESSPEOPLE

The Northern Ireland Businessperson who... ... played rugby for Ireland Simple Power boss Philip Rainey on how his rugby career taught him to seize the day

W

ITH the Six Nations upon us again, it’s a good time to reflect on the valuable lessons I learned during my rugby career as a former Ballymena, Ulster and Irish international rugby player.

I’m in no doubt that the many skills I picked up during my sporting days — from the ability to “read the game”, work as part of a team and motivate others — have served me well in the twin worlds of business and management.

These core sporting abilities have, most recently, shaped my role as chief executive of local wind energy company, Simple Power.

Primarily, rugby taught me about commitment as a precursor to achievement. To get anywhere in any sport requires hard work, dedication and unwavering determination.

Rugby introduced me to the age old mantra, “the more you put in, the more you get out”.

Rugby is also a team game.

From an early age, it provided me with an invaluable insight into the benefit of working with others to achieve the best outcome. There’s one particular match — the 1984 clash between Ulster and the touring Australian side — in which I’m often remembered as the player who scored the winning points, but it was in fact a real team effort.

It’s very much the same off the pitch. Every business is, in essence, a team; where everyone has their own role to play, and if they play it well, the whole company succeeds.

Rugby taught me the importance of having the right people in the right positions, using their complementary skills to work towards a common goal.

As management expert Jim Collins puts it: “Get the right

Philip Rainey playing rugby for Ireland v New Zealand, November 1989 people on the bus, the wrong people off the bus, and the right people in the right seats.”

At Simple Power, we are developing a network of small scale 250kW wind turbines on farms throughout Northern Ireland. We handle the whole process, from site assessment and planning to construction and grid connection. Within our multi-functioning team, it is important for me as the “captain” to read the game and provide direction, to ensure the success of our strategy.

Like rugby, we must play to our strengths as a business, acknowledging weaknesses, challenges in the market and figuring out the “best play” to overcome these.

My teammates and I were no different to the driven young athletes playing in this year’s Six Nations. Above all, we had

a strong sense of belief. This belief cannot be underestimated. It is as applicable in business as it is on the pitch. Belief in yourself helps you confront obstacles that come your way.

Belief in others helps you do so with support, encouragement and confidence.

I adhere to a ‘carpe diem’ approach in both business and in life. This was enforced in a very real way during my rugby career, when, one day in 1987, myself and three teammates were caught up in an IRA car bomb on the Irish border. It was devastating for all involved; Lord and Lady Gibson, a judge and his wife who were travelling in the car in front, were killed in the explosion.

Tragically, due

to his injuries, it ended the rugby career of my Ireland teammate, Nigel Carr. I was remarkably unscathed, but, like everyone in that car, incredibly shaken. It was one of those things that you never thought would happen to you.

But the events of that day provided us all with a new sense of perspective. On the pitch, we became known for pushing the boundaries.

As for me, my experiences from those days — both good and bad — have undoubtedly shaped my career. I certainly don’t worry so much about the future, and never let myself dwell on the little things in life.

Possessing such an attitude encouraged me to move into the renewable energy industry in 2012; back when it was a relatively unknown world.

I wanted to take a risk on something I believed in. Since then, I hope that I have become a collaborative, flexible and open-minded chief executive at Simple Power. We are currently facing a range of challenges — such as helping Northern Ireland to reach its 2020 energy targets — and such a perspective is helping keep me driven and focused every day.

Throughout my rugby career, I worked with some incredible mentors who have really shaped my leadership style. One who stands out is the late Jimmy Davidson, our Ulster coach, who constantly encouraged us. He invested his time in us and, in return, we respected him above all else.

This is an approach I try to bring to my team in business; motivating us all, together, to achieve our goals. I’m confident it will help us win, both on and off the pitch.

2 March 2015 BUSINESS MONTH 37

FOCUS ON: THE MOTOR INDUSTRY

Motor industry revving up for a full throttle future

Northern Ireland’s forecourts expect attractive finance deals, falling fuel costs and an enthusiasm for hybrid models will continue to boost their trade, writes Lesley Houston THE state of the motoring industry is one of the key barometers of the health of the economy.

Soaring consumer confidence has translated into an eight year peak in new car sales in Britain in the first month of the year.

However, the number of vehicles leaving Northern Ireland’s forecourts fell by nearly 5%, though motor dealers and analysts alike have said the January fall was a blip.

Figures from the Society of Motor Manufacturers and Traders (SMMT) say that 6,356 new cars were sold in Northern Ireland in January, compared to 6,661 in January 2014.

The shrinkage compares with record growth of almost 7% for the UK and 31% for the Republic of Ireland.

However, the fall in January marked only the second time since February 2013 that Northern Ireland had recorded a year-on-year decline in new car sales, following a slump in August 2014.

Despite the dip, new car sales in January still surpassed levels in January in the five years up to 2013.

The latest January fall contrasts with a 6% rise in the number of new cars sold in the previous 12-months.

Despite the healthy market over that year, when some 56,897 new automobiles were sold, Northern Ireland’s market experienced a steep peakto-trough decline in sales in the downturn that was higher than the rest of the UK. (-32% versus -25% for the UK and -69% for the Republic of Ireland).

38 BUSINESS MONTH 2 March 2015

Ulster Bank chief economist Richard Ramsey said: “To date, Northern Ireland has recouped less than half (46%) of the decline in new car sales that occurred between 2007 and 2012.

“During the 12 months to January 2015, the number of new cars sold in Northern Ireland was 11,811 fewer (or -17%) below the peak (68,708) in 2007,” he said.

“Conversely, UK new car sales are at a 10-year high.”

Mr Ramsey maintains that reductions in fuel prices will continue to boost disposable incomes in the months ahead, thus “should support the new car sales market

in the near term”.

Meanwhile, Belfast Harbour, the main entry and exit point for goods and services to Northern Ireland, reported that the number of vehicles passing through in 2014 was up 10% to 48,000 — the highest level since 2007.

And despite January’s drop, Northern Ireland dealerships SERE Motors, Donnelly Group and Charles Hurst, are all confident about the future.

Stanley Edgar, managing director at SERE Motors, said much of January’s decline in sales could be owing to the withdrawal of the Chevrolet from the UK market.

Using figures from the Driver and Vehicle Licensing Agency, he said the drop of 172 car sales in January — when 6490 cars were sold — compared to the previous year’s tally of 6318, was “not a lot of cars in the scale of things”.

Around 80% of the SERE Motors business is from the used car market — and he said January had seen a 30% increase in all sales.

And “standard small cars” like the Volkswagen Golf, Vauxhall Corsa and Seat Ibiza were among the most popular. “People are moving away from the 4x4s into the mainstream cars and are down-sizing,” he says.

But for those with deeper pockets, he said that sales of used Mercedes had also gone up. He believes though, that while the green market had been “struggling” to gain a

Continued on p40 >>

2 March 2015 BUSINESS MONTH 39

FOCUS ON: THE CAR INDUSTRY << Continued from p39 operations director at dealership Charles Hurst, part of Lookers plc, said it was important to put the January fall in sales “in context”. “Overall, new car sales in Northern Ireland have been growing solidly, steadily and strongly since volume sales peaked in 2007, with last year’s full year figure of more than 57,000 vehicles the strongest since 2008.”

He says key market variables like choice, attractive finance deals and promotions will underpin future growth, aided by cheaper fuel.

“We’re confident, given our own registered sales last month and the increase in enquiries which were produced, when combined with the increased attractiveness of cheaper fuel, that the local market is well positioned for more growth in 2015.”

Mr McNab reported a spike in SUVs — up 9% on the year — including a strong showing from the Hyundai IX35 and Nissan Juke.

On the luxury scale, Ferraris, Bentleys and Aston Martins were up as much as 70%, while elec-

Hurst expects attractive finance deals and promotions to underpin growth, boosted by a drop in fuel prices tric models and the improving variety of ‘plug-ins’ means “more and more people are keen to try them out”.

Malcolm Kerry, managing director of Donnelly Group, said there had been “a huge uplift in activity in February” across its

40 BUSINESS MONTH 2 March 2015

seven sites. The Corsa and Golf were still popular models — though he also named the Fiat 500 among the top sellers, with the Renault Captur among the popular SUVs. Mr Kerr agreed with the growth in ‘plug-ins’, particularly

with the launch of the Mitsubishi Outlander PHEV, an electric vehicle which is exempt from car tax.

“While small vehicles will dominate the market for some years yet, we are witnessing the slow rise of a new dawn in motoring,” he said.

FOCUS ON: OFFICE SPACE

RE-INVENTING

With the growing trend for ‘hot-desking’, ‘working from home’ and ‘on the move’, Simon Rowe looks at the implications for firms which require their staff to continue working from traditional office spaces THE workplace of the future won’t be what we’re used to.

A massive growth in hot-desking, homeworking, and staff who work ‘on the move’ means the traditional concept of the office is rapidly being shelved.

Technological advances such as cloud computing have created virtual offices at a stroke, making many of the trappings of the conventional ‘fixed space’ office redundant.

For a growing number of workers, the office is now the sofa, kitchen table, café or train. Indeed, a big trend is for workers to abandon their office entirely and organise their working day from a third space that is neither the office, nor the home – a place that has been nicknamed the ‘coffice’.

Rather than having a fixed location to work from, many workers are gravitating towards coffee shops or fast food chains where there is wifi connectivity and coffee on demand.

Companies and employees are reaping the benefits of this revolutionary transformation in work practices.

For employers, it’s an opportunity to cut overheads. For home-workers, it offers reduced commuting times and travel costs — together with the option to be ‘at work’ instantly.

The phenomenon of mobile or remote working is spreading — and the rapid pace of change looks set to continue.

Nearly half of all UK businesses now enable staff to work at home on an occasional basis,

according to a recent BT Business Insights poll, Indeed, many workers already operate on the move and do so more effectively than their office-bound colleagues, the BT study found.

These trends are shaping and transforming the planning and design of tomorrow’s offices.

Modern office designers are now being asked to put the fun into functional, by creating flexible ‘breakout zones’ and

Office space does not have to be traditional and boring — it can be a really fun place for people to work and to relax in during their breaks

42 BUSINESS MONTH 2 March 2015

‘brainstorming hubs’ that appeal to a more flexible workforce. As a result, staid meeting rooms and lifeless staff canteens are undergoing a process of reinvention.

Where this trend is having the biggest impact is in firms that require staff to work from a fixed office space at all times, because as mobile working becomes more common, fixed space offices are under increasing pressure to remain attractive places to work. Office design is therefore seen as playing a vital role in helping to boost staff morale and assist with employee retention.

Grant Thornton, which employs 250 staff at its Clarendon Dock offices in the city, sees office design as important in helping to attract and retain young graduates.

The Belfast-based business consultants have invested large sums of money in re-inventing their workplace to “inspire creativity and productivity” among staff.

“Office space does not have to be traditional and boring — it can be a fun place for people to work and relax during breaks and recommend to their friends as a great place to work,” said Lisa Allen, the design guru who led

CONTINUED ON P44>>

‘OFFICE LIFE’ ust volorrum utatiata volenda quia ni alitati ratiumet et vendus dis et voluptas ut ium nihilla quamus duscipis ressequam quassimus.

2 March 2015 BUSINESS MONTH 43

FOCUS ON OFFICES <<CONTINUED FROM P43 the Grant Thornton design project.

“We sought to design a creative workspace where staff feel excited to work,” she said.

Grant Thornton engaged the services of local fit-out specialists Marcon to advise on build materials and furniture in its office revamp. The end product was a series of themed meeting rooms based on Hollywood blockbusters Harry Potter, Star Wars (right) and Willy Wonka.

“Inspiration for my designs came from what the likes of Universal and Disney can create,” said Ms Allen. “Life, along with work, can be stressful and people can find it hard to gain a work-life balance. My design aim was to create an open functional office design for Grant Thornton people to work in, yet have unique meeting rooms where they can step away from their

44 BUSINESS MONTH 2 March 2015

Office revamp: an exciting place for staff to work desks and feel they have been transported to a jungle when they are in the Jurassic Room, or a spaceship when in the Star Wars room, or magically be in the Common Room at Hogwarts.”

Marcon, which has an impressive track record in office redesign projects and has just completed work for Google, Amazon and Groupon, manu-

factured and installed all of the specialist joinery throughout the Grant Thornton project. As well as constructing the movie-themed meeting rooms, Marcon manufactured and fitted a new curved walnut reception desk, fabric wall panels, feature boardroom tables, glazed screens, and breakout areas.

However, while fun is good, functional still has its place when it comes to office furniture, espe-

cially for reasons of ergonomics and health and safety.

Allister Mulligan, boss of Desk Warehouse, a major supplier of office furniture to call centres and construction firms, says workplace safety remains a big factor in office furniture trends.

“We have a lot of companies who spend a lot of money on chairs just to eliminate any risk to themselves from back injury claims. These companies don’t mind spending hundreds and hundreds of pounds to stop this happening,” he said.

Desk Warehouse is one of Belfast’s biggest office furniture specialists with a 6,000 sq ft showroom and 10,000 sq ft store.

Investment in office design also sends a strong message to employees and makes them feel valued, said Gareth Neill, a senior partner at Grant Thornton.

“It was important for us to invest in a creative environment, showing we care about our people, while inspiring them to grow with the business and most importantly recognising the excellent work that they do,” he said.

OFF LINE SECTION MOTORING

DAY INTHE LIFE

MANABOUTTOWN

RIGHT

PAUL

THE

MIX

Mitsubishi’s Outlander enhances hybrid cars

CONVERY

Head of BT Business

CHAIRMAN

Inside track on Northern Ireland business

RISING ABOVE IT ALL A JOURNEY ON PERU’S LARES TREK

2 March 2015 BUSINESS MONTH 45

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OUT TO LUNCH

We’re heading in the right direction, but. . .

Joris Minne goes out to lunch with Noel Brady, one of the top business advisors and fixers in Northern Ireland, and hears his views on the latest bid to rebalance our economy

I

N the last 20 years the Northern Ireland business community has grown in numbers, learned to dress well and become younger. While older establishment figures still rattle around the members’ lounges of the CBI and IoD, the new suits are dominating.

The ICT sector, for example, employs more than 18,000 in greater Belfast, marketing and design agencies are matching the quality of top Dublin and European operators and the agri-food sector has gone all street-foodie and cool.

Is there room in this brave new world for any of the experienced seniors? Noel Brady’s record goes back to the 1980s which makes him one of the establishment. But Brady has approached the challenges with a David Bowie style strategy of continual change and adjustment.

The former CEO of SX3 is now one of the top business advisers and fixers in the north. His agency, NB1, offers potential newcomers, investors and expansionists to Northern Ireland markets the kind of service only an insider with the deepest roots could provide. He says these roots go back 37 years in public and private sectors.

“When I was a civil servant and Margaret Thatcher was in charge, a policy of market testing was introduced to identify areas of government which could be priva-

46 BUSINESS MONTH 2 March 2015

tised,” he recollects over a light and invigorating lunch in Ox. (We are surrounded by some of those earlier establishment figures and Noel nods graciously to them all. They all know him.)

“One of the first functions to be market tested was the area I was in, computing, in the then Department of Finance ,” he says. “The Central Information Systems Division became the first to be outsourced in 1991 and I went with it.” The division became part of the CFM Group, then ICL and now operates under the Fujitsu brand.

Brady appears flamboyant with an expensive brush top hair cut, a pair of redframed spectacles and chunky gold jewellery. His manners are impeccable, there is no hint of narcissism and the clarity of his thinking is unparalleled.

“When companies approach me with a view to entering Northern Ireland I analyse them back to the bare metal. Once I understand their offer, I work out a network engagement plan to begin plugging them into Northern Ireland’s fabric. There are many layers of this fabric. My job is to connect them to those networks,” he says.

There’s something of the doctor’s bedside manner about him. His ability to listen and assimilate complex information is well known. His experience crossing from public to private sector also informs

him of his current economic views.

“Market testing worked 25 years ago so why would it not work now? This is not about taking jobs out of the public sector because 20,000 posts are already earmarked. It’s about doing what we said we’d do which is create more private sector jobs to replace the shrinking public sector.”

If Finance Minister Simon Hamilton wants to rebalance the public and private sectors here, Noel Brady’s advice is to devise a new privatisation strategy, reintroduce market testing and get on with it.

Despite the challenges our economy faces, his outlook is cautiously positive.

“There is a distinct sense that we are heading in the right direction. But I never underestimate how fragile our collective confidence can be.”

Ox Soup Celeriac John Dory x2 Desserts x2 Wine x2 gls Espresso x2 Total

£4.00 £7.00 £36.00 £8.00 £14.00 £4.00 £73.00

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YOUNG ENTERPRISE

Young entrepreneurs turn on a slick sales technique

By Aoidin Gormley of Rathmore Grammar School, Belfast This month I’m going to tell you about my first experience selling at a trade fair. If you had seen me you would have thought I was on The Apprentice or Dragon’s Den. On February 4 a few members of my team and I rocked up to the Kennedy Centre with our products, posters and display board, ready to ‘wow’ the Belfast public — and we did.

But let me tell you, it’s harder than it looks. Selling is hard. People don’t want to be stopped during their busy lives by someone trying to get money from them. They just aren’t interested. And I think charm is one of those things that either you’ve got it or you don’t. But after a short period of flopping we clicked on to the trick — freebies. Who can resist free stuff? Suddenly our table was constantly crowded which gave us an amazing

Michael Lynch, Damon Teer and Aoidin Gormley, from Rathmore Grammar School, take their company, AirOis, to the Young Enterprise Trade Fair at the Kennedy Centre opportunity to promote our business, showcase our hard work and efforts, and get direct feedback from customers on all we’ve done.

For anyone who didn’t get the chance to see us at the Kennedy Centre, our company is selling branded sports bags, which is funding our social aim

to put together a road safety campaign to create awareness amongst young people about this serious issue. We have created a presentation that we hope to deliver to young children, educating them on the dangers we face on the roads and give advice on how to be safer.

At the Kennedy Centre we gave away free reflective gear such as high visibility vests, slapbands, bike lights, bags and pens. We were thrilled to receive such amazingly feedback from the public.

There was a lot of work put in before we were ready to attend the event so the few days prior were very stressful.

Everyone was running around like headless chickens printing posters for our displays, ensuring we had enough stock to last the day and checking the team was prepared for the day.

To be honest, we came home exhausted. However, it helped us identify our strengths and weaknesses as a team and we gained valuable first-hand skills such as persuasive sales techniques and customer interaction which will no doubt help us later down the line.

It was an all-round very successful and enjoyable day, and coming home with two awards definitely made all the stress worth it.

2 March 2015 BUSINESS MONTH 47

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DAY IN THE LIFE

‘It’sthevariation that makes BTan exciting place to work’ Paul Convery Head of BT Business

6.30am

My morning starts with myself and my wife Dervla getting the children up and ready for school. We have a four-year-old and a 14-month-old so you can imagine that breakfast time is never a quiet occasion in our household. It’s definitely a team effort as we both work full time so we usually prepare as much as possible the night before so that each day starts smoothly. When it’s my day for the school run, I tend to check emails at home before I take our daughter to school and then I travel into the office, where I am based at BT’s Telephone House in Belfast.

8am

This week, we are hosting an event for key SMEs in the local market to introduce them to the benefits of our latest offering, BT Cloud Voice. BT Cloud Voice is a new business-grade IP voice service, which uses proven IP communications technology to deliver reliable, high quality calls over the internet. This technology is the future of business voice communications and it is an important tool to help equip companies for success. We

are proud that the event will offer businesses the chance to listen to two inspiring special guest speakers. This will include Jonny Quinn, drummer in international band Snow Patrol and co-founder of music publishing company Polar Patrol Publishing, and Chris Johnston, founder and CEO of Adoreboard, a brand intelligence company that was recently awarded ‘Best tech start-up’ at the ITLG Silicon Valley Global Technology Forum. Both businessmen recognise the importance of using technology to future-proof their business and stay connected to clients even when they are out of the office — a key benefit of BT Cloud Voice.

11am

I manage a large team of people located across Northern Ireland and I am ultimately responsible for the customer experience of our business customer base in Northern Ireland. It is extremely important for me to remain in touch with my teams on a daily basis to help them to deliver the top class experience that you expect from BT as a world-class communications provider. As

48 BUSINESS MONTH 2 March 2015

many of my teams are based outside of the office, technology is key to staying connected with them. Throughout the day, I rely heavily on our conferencing facilities to keep in touch with the local sales teams and to also bring larger virtual teams together from across the UK to ensure shared learning and regular contact with colleagues in GB. Communication is what it’s all about.

3pm

Customers expect superior customer service from BT and with this in mind high levels of service delivery are expected for each customer. As well as using technology to stay connected to customers when I am in the office, it is also important for me to regularly meet with as many customers and partners as possible and talk to them about their experiences of our services. Any given day can involve a customer site visit so this could mean I am travelling to Derry one day and then to Carrick the next. Mobile communications are at the heart of what we do and given our agile working lifestyle, the ability to stay in touch reaches well beyond the office.

5.45pm

I normally aim to leave the office at around 5.45pm to try and avoid the height of the rush hour. Once I’m home, Dervla and I spend time with the children. We all have dinner together and always make sure that there is time for play.

I tend to prepare all evening meals the previous weekend, so it usually makes for a hassle free night for the whole family.

Bedtime is a tag team operation, with Dervla and myself putting our daughters to bed.

What’s left of our evening is normally given up to a tidy up and preparation for the next day. But one of the great benefits of working for BT is that I can use the latest technology available to stay connected remotely from my home office, so I generally check the inbox to ensure that things are as they should be and if there is a customer escalation or something that needs urgent attention, I deal with it quickly. Every customer is important and I like to deal with every mail as quickly as it comes to me.

It’s fair to say no two days are the same, but it’s the variety that makes BT an exciting and innovative place to work.

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Titanic hosts conference for transport managers THE Freight Transport Association’s Transport Manager Conference is taking place at Titanic Belfast on March 3. The conference provides all the information and advice transport managers need to meet the challenges of the rapidly changing transport scene in Northern Ireland.

The event, sponsored by Brigade Electronics and Volvo Trucks, and supported by media partner Export & Freight magazine, is covering the key issues facing transport managers in the year ahead and will include a keynote address by Environment Minister Mark H Durkan.

The minister will address the conference on the latest roadside enforcement measures, future proposals and legislation. There will also be an insight into the future enforcement of regulations by the Transport Regulation Unit (TRU).

Keith Morrison, the chief executive of the Health and

Safety Executive Northern Ireland, will discuss safety in transport and warehousing.

Volvo will discuss the trucks of the future. Sally Gilson from the FTA will discuss the driver shortage/ There will be a Transport Manager interactive quiz, while the PSNI will discuss the latest enforcement priorities.

Call for politicians to help reduce road deaths THE Royal Society for the Prevention of Accidents (RoSPA) is backing calls for graduated driver licensing to help cut the number of young drivers killed or injured on the UK’s roads.

It is one of a range of potentially-lifesaving initiatives that RoSPA would like to see included in a Green Paper on young drivers, in a bid to save the hundreds of 17 to 24-year-olds killed or injured on the roads every year — 131 were killed in 2013, while 1,159 were left with serious injuries.

RoSPA has written to all major political parties, asking them to agree to a Green Paper on young drivers and include

it in their manifestos ahead of the General Election. Graduated driver licensing is a part of this, along with telematics (or black box technology) and enhanced training. It is backed by 24 influencers, charities and organisations.

Tom Mullarkey, RoSPA’s chief executive, said, “Far too many young lives are being lost on our roads each year, so it is imperative that we take a more radical approach in order to reduce the number of casualties.

Premier driving event comes to Bedfordshire COMPANY Car in Action (CCIA), the UK’s premier driving event, will celebrate its 25th anniversary when it returns on June 16 and 17 at Millbrook Proving Ground, Bedfordshire.

Over 20 motor manufacturers, including BMW, Fiat Group, Ford, Hyundai, Infiniti, Jaguar, Kia, Land Rover, Lexus, MINI, Maserati, Peugeot, Renault, SEAT, Toyota, Vauxhall and Volvo, will be bringing their latest cars to the ‘arrive and drive’ event.

Organised by Fleet News, the

MOTORING NEWS

fortnightly business-to-business title for the fleet industry, CCIA offers motor manufacturers and fleet industry suppliers an opportunity to reach key fleet decision makers.

As well as driving on four unique and purpose-built test routes — city, off-road, alpine hill and high speed — all in one location, visitors to this year’s event will be able to view informative displays and services in the exhibition hall. They will also be able to take part in series of industry debates on running a low emissions fleet, which will offer practical steps to implement policy to drive down fleets’ CO2 emission.

There will be a debate on running a safer fleet, which will combine presentations and a panel discussion with specialists who have experience implementing duty of care policies. There will also be discussions on running an efficient fleet in the public sector, which will share best practice as well as offer a comprehensive guide to the very best and most innovative means of efficient, compliant and cost effective fleet management.

2 March 2015 BUSINESS MONTH 49

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MOTORING

Best of both worlds M Mitsubishi’s new Outlander enhances the appeal of hybrid cars, says Jim McCauley

itsubishi’s Outlander PHEV is the world’s first all-wheel drive, plug-in hybrid SUV which is set to extend the appeal of this new generation of vehicles.

Hybrid or twin-powered vehicles represent the marriage between the internal combustion engine and electric motors in order to improve economy and address environmental issues.

As with petrol and diesel engine technologies, manufacturers have developed

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their own unique packages for hybrid vehicles with Mitsubishi being one of the first to address electric power and have a car in series production.

Now that early expertise based on 40 years of research has been further developed in their Outlander SUV, producing a vehicle that can be truly seen as the leader of the pack, in that is has covered all options in an attractive and well packaged solution.

And furthermore, the new Outlander PHEV is not on sale at a crippling premium

over the company’s diesel alternative, but at a similar price, an initial bonus for pondering customers.

The driving power in the Outlander PHEV is a pair of 80hp electric motors, one on each axle which provide permanent all-wheel drive.

Supporting the power of the electric motors is the company’s well proven 119bhp 2.0-litre petrol engine which essentially sees that adequate battery charge is always available, but can additionally directly complement the electric motor

on the front axle as the need arises. The total motive power package is rated at 200hp, indicating the performance potential of the vehicle.

As well as the on-board generation of electricity, the Outlander PHEV can be plugged into the mains for a full battery charge which will allow it to cover around 32 miles before the petrol engine needs to cut in. So immediately it can be seen that relatively short drives, which are statistically what we most use our vehicles for, can be covered for a few pence of

MITSUBISHI OUTLANDER PHEV Engine: 2.0 litre petrol and 2 X 80 HP electric motors giving a total working output of 200 BHP Drive: Automatic to all four wheels Performance: 0-62mph (100km/h) in 11.0 seconds; max, 106 mph (170 km/h) Fuel on combined cycle: 148.7 mpg (1.9 l/100km) CO2: 44 gms/km; VED Band A for zero annual car tax Trim: GX3H Price: £28,249 including £5,000 government grant Insurance: N/A Warranty: 60 months / 62,500 miles Benefit-in-Kind: 5% Euro NCAP: Percent driver: 94% Percent pedestrian: 64% Percent child: 83%

mains electricity, while on longer journeys with the petrol engine support, the range from its 45-litre fuel tank is in excess of 500 miles.

On road, and with a fully charged battery pack, a simple ‘Ready’ on the instrument panel allows you to drive off silently with no tailpipe emissions. Simple graphics on the display highlight the power source and also indicate when regenerative braking further assists in charging the batteries.

With automatic power delivery, there are just two choices on the ‘gear-lever’ — forward or reverse — and the vehicle drives no differently from any other engine option.

The Outlander PHEV can complete the benchmark 0-62 mph sprint in just 11 seconds with mid range acceleration always instanta-

neous en route to a top speed of 106 mph.

With the weight distribution carefully balanced throughout the vehicle, it rides well and steers competently, disguising its hi-tec packaging to feel like any other SUV competitor, and confirming its engineering excellence as well as driver appeal.

Keeping to the mainstream feel, the cabin is also biased towards traditional layout, reinforcing the fact that this is an alternative choice in the Outlander model range rather than something that has to be different for the sake of it.

A cavernous cabin provides excellent room with comfortable seating for all occupants as well as a large boot area.

And this traditional familiarity extends to the exterior in a vehicle that carries an

elegance in a softer design statement than is generally associated with SUVs. But the true appeal of the vehicle is in its economy and low running costs. While the limited mileage official economy test records the model at 148 mpg in mixed driving, the truth is that this could be exceeded if the majority of driving was done with frequently mains charged batteries using the vehicle mostly in electric (EV) mode only. For longer journeys, when the engine would also be used as a generator or front axle power support, the figure would be much less. However, in several days mixed driving on local roads with overnight charging, I was able to comfortably exceed the official mileage figure for the diesel Outlander.

With a CO2 emissions

figure of just 44 gms/km, the Outlander PHEV is exempt from annual road tax and is particularly appealing for business users with a BIK tax rating of only 5%.

Equipment-wise, the test vehicle was in basic GX3H trim but includes seven airbags, 18-inch alloys, hill-start assist, rear parking sensors, automatic lights and wipers, dual zone climate control, fabric/leather-look upholstery, cruise control with speed limiter, and Bluetooth connectivity as the highlights in a comprehensive specification list.

Including the Government grant of £5,000, the Outlander PHEV is available for £28,249 and is covered

by Mitsubishi’s comprehensive three-year/unlimited mileage warranty, with five years support on electrical components.

2 March 2015 BUSINESS MONTH 51

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TECHNOLOGY 2. Bluesmart Suitcase approx £200 @ www.

Bluesmart is the world’s first smart carry-on suitcase. It connects wirelessly to the users’ phones allowing them to lock and unlock, weigh, locate, receive alerts and track their suitcase and trips, all from an easy-to-use mobile app.

The suitcase has a built-in battery charger that allows the user to charge a device up to six times, with easy-access, protected compartments for laptops and electronic devices. The Bluesmart app syncs with the suitcase and online travel services to provide the user with reports, smart notifications and alerts. The technology allows features such as digital lock that gives users the freedom to forget about keys or combinations and lock and unlock the suitcase from the phone app.

3. Smarter Coffee wifi coffee machine £149.99 @ www.firebox.com Do you literally want to wake up and smell the coffee? Well now you can with another everyday device that has become smarter. Now you can control how and when you make your coffee with your smartphone or tablet. This futuristic appliance makes delicious coffee straight from bean to cup, grinding and brewing it in one fell swoop.

Best of all, it grinds and brews “on demand” so you won’t waste a single bean. And Smarter Coffee is tailored to your personal tastes.

1. JUNE AVBracelet approx £70 @ www.netatmo.com Electronics company Netatmo unveils its first bracelet that measures sun exposure by advising women how to protect their skin from its rays. The JUNE bracelet and its companion App track UV intensity in real-time and the total sun exposure absorbed by the user’s skin throughout the day. Depending on the woman’s skin type, the App calculates the suggested maximum daily exposure. To avoid sun damage, the App can notify the user when to protect their skin and the App also features a summary of time spent in the sun. The bracelet observes the habits of the user and the companion App determines the recommended sun protection for their skin type whether it be applying SPF, putting on a hat, wearing sun glasses or seeking out shade. It comes in gold, platinum and gunmetal.

4. Sony 4K BRAVIATVs approx £1000 @ www.sony.com Electronic giant Sony is launching 12 new 4K Ultra HD BRAVIA LCD models. Boasting even more picture quality than before this new line of BRAVIA sets includes the world’s thinnest series of TVs as well as the world’s first series with Hi-Res compatible speakers.

In addition, Sony is equipping a wide range of 4K and Full HD sets with Google’s latest AndroidTM TV operating system to make cross-functionality between TV and mobile richer than ever.

Sony’s One-Flick Entertainment interface provides a unique user experience with intuitive flick-operation via touchpad remote to access a library of content just a flick away.

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Light side

Pleated skirt approx £45@ M&S Grey chinos £30 @ River Island

By Grainne McGarvey

P

ASTEL colours are always a strong trend when it comes to this time of the year. They just ooze a spring feeling that helps us embrace the lighter side of life.

However if you can’t decide which soft tones suit you best, then combine a mix of pastels in colour-block layers or delicate ombre washes. For SS15 the inspiration is the sky with plenty of cerulean blues and sunny yellows, which offer a subtler palette.

As there is plenty of choice on the high street you will have the chance to integrate the trend easily into your everyday wardrobe.

FASHION

Leerid Graphic T-Shirt £45 @ Ted Baker

Camden Town bag£199 @Radley

Biker-knit cardigan £99 @ Karen Millen Ice-blue herringbone coat £99, Jaeger@ TheOUTLET

Open weave polo £69 @ Reiss

2 March 2015 BUSINESS MONTH 53

TRAVEL

HEAD FOR THE CLOUDS

James Cusick has a philosophical journey on Peru’s Lares Trek, which is quickly catching up on the famous Inca Trail to Machu Picchu as a tourist attraction

M

OUNTAINS bring out the philosopher in you. It can’t be helped.

It’s something to do with fundamental consciousness, the presence of eternity, the freighted Zen of the earth’s natural monuments, the closeness of the transient sky. So, at 4,414 metres up in the Huchuy Qosqo Pass in Peru’s Sacred Valley, when I should have been contemplating the legacy of Pachacutec, Atahualpa, and other Inca rulers, why was the prospect of a hot Jacuzzi, a cold beer, and an emerging blister on my left foot the only stuff on my mind?

There was a time when I could bag a Munro before lunch and head home for a round of golf that afternoon.

Now, the fourth floor of the Peter Jones department store in London might as well be the Eiger Nordwand if the escalators are out of action. Given an over-worship of the sedentary gods, a week’s high-altitude hiking in the mountain passes either side of the Urubamba Valley, with 7am starts and twilight finishes, was likely to end like a scene from A Fistful of Dollars where I’d be taken back to town, lifeless, ignominiously slung over the back of a mule. A Munro such as Schiehallion near Aberfeldy, at just over 1,000m is, as the locals say, a tough wee walk.

But marching about at 4,500m, the level of the summit of the Matterhorn? Well, you could hitch a lift from the International Space Station at that height.

High in the Andes, out of breath just thinking about the next step, and with a heartrate mimicking the William Tell Overture, they say you’ll find out what you’re made of.

Sensing my answer wouldn’t be good, I flew from Lima into the Inca capital, Cusco, and began following advice that drinking tea made out of coca leaves helps alleviate altitude sickness. The psycho-active alkaloid of coca is cocaine; so coca tea is surely the cuppa which would’ve had Jimi Hendrix’s approval.

Apparently an excessive coca tea regime is a mistake.

I’d also been taking acetazolamide tablets without realising one side-effect was paresthesia, pins and needles in your feet and fingers. I woke up in Cusco at the ultra-comfortable El Mercado hotel sensing just the hint of a Nazca Plate earthquake in my room. There wasn’t one.

The Sacred Valley, stretching from Pisac to Ollantaytambo — where an hour on the train will then take you to Aguas Calientes just below Machu Picchu — was the heart and soul of an empire that from the 13th century stretched

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out from Cusco to conquer a large swathe of pre-Columbian South America. Before the Spanish conquistadores, led by Francisco Pizarro, destroyed the Inca dynasty in the mid16th century, their governed territory covered an area the size of western Europe.

The hard-school exploration of the high mountain route which ends at Machu Picchu’s Sun Gate is the classic four-day Inca Trail. But conveyor-belt overcrowding in places has led to an alternative route north of the Urubamba River, the Camino Salcantay, gaining in popularity. A few years ago, a local operator, Mountain Lodges of Peru (MLP), opened plush, small-scale lodges along the Salcantay receiving applause from no less an authority than National Geographic, which called it “the cool way” to the Inca ruins.

MLP, sticking with the same high-end formula, has now turned to the Lares Trail in the Sacred Valley and opened two classy lodges, with a third on its way this autumn, that serve as a deluxe reward after a hard day’s trekking. The basic idea is that a drafty bothy, re-heated soup, and a damp duvet isn’t always required for the full mountain experience.

So instead there are beautiful

bedrooms, Michelin-aspiration cuisine, hot powerful showers — and, as mentioned, the above-the-clouds Jacuzzi at 3,800m at Huancahuasi. If you think your legs and lungs are incapable of another grinding step, it’s surprising what the peace of a five-star kip in crisp linen and a decent Chilean merlot can do for the spirit.

The party that set out on the Lares Trail included two young MLP staffers, two expert guides, and Tracey, a middle-aged redoubtable traveller from Australia’s Northern Territory who was taking in Peru en route to a family Christmas in Las Vegas. A weekly football game in Cusco at 3,431m meant the two staffers were used to altitude and took to the mountains like teenagers using shopping mall lifts. The tough Australian wasn’t going to cave. And I assumed that as the ritual sacrifice of journalists — helicoptered off the hill suffering deflated egos — was no longer practised, I’d be okay.

My backpack on day one had enough clothing to accommodate weather in the Bahamas and Nepal. I was a bit over-prepared. However, on the first day’s hike from Chinchero, over the Huallata Pass and then down towards a late lunch at Huchuy Qosqo (‘Little Cusco’)

Staying there El Mercado Tunqui, Cusco (0800 014 8886; elmercadotunqui.com).

Inkaterra Machu Picchu Pueblo Hotel (00 51 84 582 640; inkaterra.com).

More information Peru.travel/

I’d been sweltered, cold, rained on, and went through nearly every item, plastic poncho included, that had been stuffed into my day-pack.

There are no roads into the archaeological site at Huchuy Qosqo (pictured left). You need to walk. Below the main site, there are renovated store houses where the Incas used to keep the maize, potatoes and beans that guaranteed a regular food surplus throughout their empire. The Incas mastered high-altitude farming by constructing layered micro-climates and storage complexes that could accommodate 70 crops capable of being stockpiled for up to seven years.

Day two meant a climb to the Challwaccasa Pass, a downhill trek to the village of Viacha and a further trek to the hilltop Inca fortress at Pisac. Sanctuary at the end of the first two days was at Lamay Lodge just south of Calca. The next two days’ base camp was Huacahuasi Lodge, which is north of the Urubamba River and sits on the edge of a mountain

village. Both buildings are new, big, and have yet to work out how they can deliver intimate comfort in open public spaces.

Americans might expect roaring log fires. I would’ve taken a blanket, a big sofa, a large malt whisky and a room full of candles. The food is elaborate, international, and borders on being over-formal.

That’s not a criticism, but the change of pace from mountain physicality to dining room does throw you. If dining is to be the day’s major sign-off, the connection with the location needs to feel stronger. It’s early days — and the right mix will come.

The balcony Jacuzzi didn’t throw me. I ran the boiling water nearly to the brim of the huge bath and waited, getting in as the clouds encircled the lodge. Memorable stuff.

Day three meant Cuncani, a two-hour hike to the Cruzccasa Pass at 4,188m and a lengthy descent back to Huacahuasi.

Day four was the toughest with a series of ascents and descents through two passes, lunch at Qeywaqocha Lake and an

end to the day at the village of Qelqena, where a beer felt like a justified survival ceremony.

The fifth day, supposed to be easier, wasn’t. It involved a trek up the Ipsaycocha Pass (4,333m) and then down to a glacial lake for lunch.

Over the week, the trail’s tented lunches became a hybrid of rescue and emergency miracle work. Soup, trout farmed in high lakes, mashed spuds, stir-fries, wine-poached pears, barbecued guinea pig and chicken, sweet fruit and teas: all appeared just when you felt your feet might abandon you. So, resuscitated and revived, you go on.

Out of the mountains, on the drive to Ollantaytambo, and later on the train to Aguas Calientes and the morning spent at Machu Picchu, I began to sense the importance of the journey, glad that it hadn’t happened without a bit of a adventure.

The Camino Salcantay and the Lares Trail are about being in the mountains with all the time you never seem to have.

Here you’ll think, wonder at

nature, and marvel at Inca history? Maybe. But your heartrate, breathing and stamina, and the next step, will seem just as important. You’ll find you’re capable of keeping going when you can’t. And that Plan B thing, quietly on offer for those who can’t cut it and need an easy day. Well, you sure as hell aren’t going to let that happen.

Getting there James Cusick travelled with Rainbow Tours (020 7666 1250; rainbowtours. co.uk), which offers a 10-night Lares Adventure to Machu Picchu from £3,135 per person.

The price is based on two sharing a twin or double room on a bed and breakfast basis, with all meals included during the Mountain Lodges of Peru Lares trek.

Flights from Heathrow are included along with airport transfers and a guided tour at Machu Picchu on the final day of the trekking programme. He flew from Heathrow to Lima via Madrid with Iberia (020 3684 3774; iberia.com).

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TRAVEL

Ten of the best: romantic getaways Valentine’s Day may be over but that’s no reason not to consider a romantic getaway. Liz Simpson, editor of boutique accommodation website i-escape.com, suggests hideaways to quicken the pulse

Croft 103, Scotland

What could be more romantic than complete seclusion? These two self-catering boltholes are at the very tip of Scotland in a landscape of soaring mountains, aquamarine seas and views that stretch for miles under a vast sky.

Port na Con, Laid, Durness, Sutherland IV27 4UN (01971 511202). From £242.

Iglu-Dorf Zermatt, Switzerland

Snuggle down on fur throws for a night on ice. This collection of igloos in the Swiss Alps is the stuff of fairytales. The bedrooms have murals carved into the icy walls and sleeping bags that zip together.

Rotenboden, Gornergrat Skigebiet, Zermatt, Switzerland (00 41 41 612 27 28). From Sfr518 (£491), half board.

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Le Grotte della Civita, Italy

unique. Uchisar, Nevsehir, Turkey (00 90 384 219 31 30). From €178, B&B.

Ever slept in a cave? It’s more romantic than you could possibly imagine at this stunning hotel in the Unesco-listed troglodyte town of Matera. Flickering candles, roaring fires and central heating warm the 18 cave bedrooms.

Via Civita 28, Matera, Basilicata, Italy (00 39 0835 332744). From €140, B&B.

The Caves, Jamaica

The perfect place for starry-eyed lovers. The “Sous les Etoiles” room at this hilltop B&B in rural Provence near Avignon has a private roof terrace, and the bed is on a track so you can wheel it out to sleep under a blanket of stars.

31 Montée du Vieil Hôpital, Méthamis, Vaucluse, Provence, France (00 33 4 90 34 46 84).

From €190, B&B.

Kalundewa Retreat, Sri Lanka

Metafort, France

Argos in Cappadoccia, Turkey

A glorious jumble of ancient stone houses, caves and underground tunnels, this hotel is

This extraordinary cliffside cluster of colourful rooms in Negril is dazzling in all respects.

Adults only, with blissful views, superb service and peaceful seclusion, it’s a place to recharge batteries and watch sunsets.

Lighthouse Road, West End, Negril, Jamaica (001 876 957 0270). From US$480 (£320) room only.

Deep in Sri Lanka’s Cultural Triangle, hidden among lush foliage and stilted over a lake, is this ultra-peaceful trio of chalets.

You’re rafted out to your accommodation, then left alone to enjoy lake views.

Kalundewa Road, Dambulu Oya, Dambulla, Sri Lanka (00 94 77 307 63 41). From US$258 (£172), room only.

The Sarojin,Thailand

Service is with a capital S at this dreamy Thai beach resort in Khao

Lak. Naturally there’s a super spa, double daybeds in a turquoise pool, and rooms are both elegant and spoiling.

60 Moo 2 Kukkak, Takuapa, Thailand (00 66 76 427 900).

From TB7,150 (£145), B&B.

Lotus Houseboat at Neeleshwar Hermitage, India

I defy you to find a more beautiful craft than Neeleshwar Hermitage’s Lotus Houseboat. Book it exclusively (there are two teak bedrooms, with baths and showers) and take a two-night cruise through Kerala’s tranquil backwaters.

Neeleshwar, Malabar, Kerala, India (00 91 124 236 7088). From R12,017 (£130), full board.

Bamurru Plains, Australia

Getting here is no easy feat, but the remoteness of this retreat, at the edge of Kakadu in Northern Australia, is its appeal. It’s a place to switch off. Luxury here is exhilaration: a 180-degree view of wildlife from your bed — and

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Appointments

OUT AND ABOUT

withThe

CHAIRMAN

The Chairman is relieved to report from a string of interesting social events as the glitterati lure him from his BT9 mansion

Catriona Saunders has been appointed finance manager at Northern Ireland Chamber of Commerce and Industry. She has been responsible for the financial management of various organisationsin both private and public sectors, and has experience across the fields of accountancy, tax and audit.

Malachy McLernon has been appointed an equity director with PKF-FPM. He has more than 16 years’ experience working with private businesses across the UK and Ireland, and has significant general practice and corporate finance experience.

Gillian Skelton has been appointed consultant with DMS Ireland. She will design and deliver Chartered Institute of Personnel and Development (CIPD) qualifications and programmes and brings to DMS an extensive background in the human resource field.

I

T’S the most wonderful time of the year....no, not Christmas, but the start of black-tie season for Northern Ireland’s business community.

The Institute of Directors had the honour of firing the starting pistol with its annual dinner in the pleasing surroundings of the Europa Hotel.

The Chairman donned his finest, cummerbund included, and was delighted to run into his old friend, the always charming Alyson English from Lighthouse PR. Ms English was joined by her fellow Lighthouse keepers Amy Black and Stephen Smith – and the conversation was given even more sparkle by the presence of the elegant Naomi McMullan of the Profit Margin.

There was also plenty of merry banter with Gary McDonald of the Irish News, who declared he was enjoying his third black-tie do in as many weeks, the lucky devil.

The Chairman was deprived of the chat of David Elliott of Ulster Business, who was seated away from the unruly press pack with his lovely wife Geraldine Elliott.

The Chairman has enjoyed his business career but is constantly plagued by ‘what ifs’ every time he hears an after-dinner speech from an entrepreneur.

What if The Chairman had brought his Auntie Angela’s crab apple jelly to market? Or even his grandmother’s lemon curd?

Could he have been successful as young Scots whippersnapper Fraser Doherty, whose SuperJam range is stocked in Waitrose, and who

58 BUSINESS MONTH 2 March 2015

Bill Beers, David White and Adrian Kerry at the Insitute of Directors’ annual dinner

Catrina Gibson and Rosemary Lundy also attended the dinner at the Europa Hotel enjoys a particularly devout following in the Far East?

The rosy-cheeked laddio made a mint from his grand-

mother’s jam recipes after experimenting with her recipes from the tender age of 14, and happily shared the secrets of

Appointments

Grace Collins has been appointed sales development manager with Willowbrook Fine Foods, having previously worked for Deli Lites and the Bite Group. As well as supporting and developing business with existing customers, she will identify business opportunities in the Republic of Ireland.

Kieran Mailey has been appointed specialist agri-advisor with First Trust Bank.

Having previously worked as a livestock specialist with the Irish Farmers Journal and as farm development adviser at the College of Agriculture, he will provide on-farm support to banking customers.

Marie-Thérèse McGivern, chief executive of Belfast Metropolitan College received the IoD Lunn’s Award of Excellence from Suzanne Lunn of Lunn’s the Jewellers; Paul Terrington, chairman of IoD Northern Ireland, Ian Sheppard of Bank of Ireland and Alan Taylor of Arthur Cox. his success with the IoD crowd.

The Chairman was also pleased to surprise his old pal Dr Helen Wright with a hearty ‘hello’ after overhearing her dulcet tones. ...

THE Chairman does enjoy the odd cold and frothy tipple when not sipping a fresh and vibrant little Pinot Noir.

And as the lights dimmed amid the backdrop of Dublin’s St James’s Gate, Ireland’s most famous brewing export re-

vealed its latest attempt to ease in to the craft beer market.

And with much aplomb, Guinness unveiled Hop House 13 to the awaiting media – nestled among massive mash tuns and glitzy branding.

The Chairman then enjoyed a rather diminutive and somewhat over-chilled sample of their new brew, in the company of brewer Peter Simpson.

He’s the enthusiastic man behind the hop and malt creation which the firm is hoping will help penetrate the burgeoning market for beers with

sizeable flavour and depth.

Of course it’s not the first time in its 256 year history that the Dublin beer maker has brought a new lager into the market.

They’ve tried with the rather unsuccessful Guinness Black, which failed to attract Ireland’s lager drinkers to the dark side.

But St James’s Gate will be hoping that the third new product in its Brewers Project line will prick the taste buds

Turn to page 60 >>

Elaine Smyth has been has been appointed Head of Programmes with NISP CONNECT at the Northern Ireland Science Park. With more than 18 years’ experience in the science and technology industries, she will oversee NISP CONNECT’s programmes.

2 March 2015 BUSINESS MONTH 59

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THE CHAIRMAN Appointments

Joanne Stuart has been appointed director of development at the Northern Ireland Science Park. She has more than 25 years of experience in the IT industry, including nine years with the Oracle Corporation and will be responsible for the development of strategic relationships.

Fedora Heavey, Peter Simpson and Luis Ortega announcing the release of Hop House 13, a double-hopped lager made from Irish barley and aromatic hops << Continued from page 59 of the public and enliven sales.

And while it’s certainly not pushing any boundaries by any means, The Chairman certainly prefers it over the firm’s bland and lacklustre lager stalwart in the form of Harp. ...

Andrew Ryan has been appointed planning and environment partner with TLT. Previously partner and head of energy, environment and planning with Tughans, he has particular expertise in the Northern Ireland planning system having advised on numerous projects.

Gareth Morrison has been appointed managing director of biometric technology firm The Lava Group. Mr Morrison worked for three years as technology manager at the firm. He will be using his experience to target new export markets and the connected health sector.

As well as making the most of black tie season – limbering up for the Belfast Telegraph’s Women of the Year Awards later this month, to say nothing of his excitement at the Business Awards next month - the Chairman is already looking forward to the Balmoral Show.

So it was with great enthusiasm that he attended a breakfast hosted by Ulster Bank to mark their sponsorship of the greatest (agricultural) show on earth.

Yes, The Chairman shunned his customary Thursday kedgeree to save some room for a remarkable breakfast spread prepared by the fair hands of none other than celebrity chef Paula McIntyre.

The Chairman was nigh-on moved to tears, not to mention bursting point, by the splendid produce provided.

David Elliott of Ulster Business popped up anew, beaming with pride as his parents’ enterprise Marlfield Farm had provided the eggs for the occasion. Other produce on the plate included potato bread from Jackson’s of Ballynure, sau-

60 BUSINESS MONTH 2 March 2015

Anita and Donna Ross from My Sister’s Closet Blog collected new Skodia Fabias from John Mulholland Motors. The sisters were joined at the revamped site in Randalstown by managing director John Mulholland and sages from McAtamney Meats and, the Chairman’s childhood favourite, vegetable roll from McKees of Maghera.

The Chairman enjoyed a catch-up with Ellvena Graham and Cormac McKervey of Ulster Bank.

And it’s no show without punch – so the media pack was much in evidence, including Margaret Canning of the Belfast Telegraph, Adrienne McGill of Ambition, Gary McDonald and Simon Cunningham of the Irish News and Alyson Magee from the Ulster Grocer.

Wholeheartedly appreciating the produce were food critics Joris Minne, John Ferris and Kevin McGuinness. ...

The Chairman seldom makes

it to the pictures but has been pondering making a trip to cheer on home-grown thespian and former male model, Jamie Dornan.

However, he understands a contingent from at least one business in Northern Ireland has already enjoyed an outing to watch the blockbusting Fifty Shades of Grey in a Belfast movie theatre.

It’s believed staff were turning 50 shades of pink at the prospect but the offer of cocktails before curtain-up was too much to resist.

An institution that likes to say ‘yes’ took over one screen to treat staff to an exclusive sneak peak of the hot – sorry, hit – movie.

Perishing the thought of running into any acquaintances, the Chairman might just wait for the DVD...

THE LAST WORD

with John

Sherrocks

As companies compete to find and retain the most talented, skilled employees, are employers getting value for money in what’s fast becoming a ‘perks arms race’?

I

T’S jokingly said that Bikram yogis don’t drink alcohol because it interferes with the suffering. As someone who enjoys a glass or two of wine I can vouch for the fact that no amount of booze detracts from the tortuous delights of the 90 gruelling minutes spent putting my ageing body through 26 contorting postures in a room heated to a sweltering 40°C. No, I’m not a masochist; I enrolled at the local studio as part of a New Year’s resolution aimed at avoiding the stroke I’m headed for unless I get a little less unfit.

Signing up also enabled me to take advantage of my employer’s offer to subsidise the cost of such activities.

Every Bikram session ends with Savasana or ‘dead body’ pose, which entails lying on one’s back for at least two minutes, thinking of nothing but the mechanics of breathing. Despite having endured at least 20 classes I’ve yet to succeed in emptying my head of all other thoughts.

During one of my mind-wandering excursions I got to thinking about company perks, which are on the rise as businesses around the globe compete to attract and retain the best of the relatively small pool of skilled and talented people.

It seems that the prospect of more money or a corner office is no longer sufficient an inventive to keep us motivated and loyal.

And it’s not just the corporate giants who are out to woo staff with ever more inventive enticements. The likes of Facebook’s offer to freeze employees’ eggs (the $20,000 perk is intended to enable women staff to establish their careers before taking time off for motherhood) and Virgin’s uncapped holidays might be grabbing the headlines, but run-of-the-mill companies are also upping the ante. Typically, extras include paid maternity and paternity leave, on-site childcare, flexible work hours and 100% paid health benefits.

The question that most distracted me from focusing on my laboured wheezing was whether companies reap sufficient return on perks or is the business world, as some commentators suggest, caught up in a ‘perks arms race’ gone mad?

Do perks such as free fresh fruit boost morale and loyalty? Are employees more productive if make-up or spa services are on offer? Does a lunchtime massage stop talented staff from jumping ship?

Or does the interest-free loan to buy a bike to cycle to the office just feed resentment among those employees who do not wish to take advantage of the perk but are

62 BUSINESS MONTH 2 March 2015

not presented with a suitable alternative?

What about the risk of inequities ruining the good intentions if certain benefits are linked to the seniority of the employee?

On the whole it appears that employees do value perks. A study by the Chartered Institute of Payroll Professionals indicated that 85% of workers rate flexible employee benefits as either ‘very important’ or ‘important’.

Interestingly, a study by Mercer, the HR firm, conducted across 12 European countries had UK firms are leading the way with close on half (48%) providing options for employer-paid perks.

According to the study, the vast majority of employers believe it is necessary to offer flexible benefits, with 80% doing so primarily to stay competitive in the hunt for the best staff. And 55% claimed that these schemes also help to improve levels of motivation among employees, which in turn can lift productivity.

Even during the economic downturn most organisations retained flexible benefits offerings, the Mercer study revealed.

Some 62% of the companies surveyed across Europe said the recession and its aftermath had not caused them to alter their strategy in this area. In fact, 13% of the companies polled actually offered a wider range of choice when the economy got tougher – presumably in the hope of appeasing staff when pay freezes and redundancies became unavoidable.

Of those who have introduced a flexible benefits programme, just 18% said it pushed up total costs. Over a third of employers maintained that they are able to save money, while 46% said their scheme had been cost neutral.

To sum up the reams of research on the subject, it seems that the secret to successful perks lies in being able to tailor incentives and to allow employees to choose those which best suit their needs.

After all, what excites one employee might well be a complete turn-off for another. More money might work for someone with a huge mortgage, while extra time off will motivate another. Working from home isn’t everyone’s idea of bliss – especially if your home also doubles up as a playground for your toddler children.

Before introducing any benefits, employers need to do some research – both in terms of what works generally and what will best suit their particular workforce.

Having an HR department might make life easier. Conversely, a small business can get everyone involved in the decision making.

Personally, if the choice had come down to half a dozen bottles of nice wine a month or subsidised membership of a Bikram yoga club, I’d probably have opted for the former. It might have increased the risk of a stroke but it has to beat standing, sweat-soaked on one leg in a heated, mirrored room, staring at my ‘third eye’ while pretending to be a tree.

Before introducing benefits, do some research – in terms of what works generally and what best suits your workforce

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