Business Month May 2014

INCISIVE, OBJECTIVE, INDEPENDENT

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

WHY MORE FIRMS SHOULD LIST ON THE STOCK EXCHANGE PLUS: PAUL GOSLING ON COLERAINE’S ENTERPRISE

ZONE STATUS AND NICK LEESON ON PHONE HACKING

CONTENTS

48

Editor’s note Margaret Canning

mcanning@belfasttelegraph.co.uk

W

FEATURES

12 Analysis: There’s still hard work ahead, despite talk of the end of austerity 14 Analysis: The residential sector is leading the way in the property market recovery 16 Economy watch: Despite the success of the agriculture success, farmers are still facing many challenges 22 Analysis: Crowdfunding is flying along, but is it going too fast?

28 SME: Texthelp Ltd chief executive reveals how its software for struggling readers is changing lives 32 Inside Report: Coleraine’s enterprise zone status is vital to NI’s digital ambitions

FOCUS

38 Recruitment: How firms can attract and retain the best candidates 42 Cybersecurity: Why Northern Ireland is so well placed to play a role in tackling hacking

COVER STORY

NUMBERS GAME Why more Northern Ireland firms should think about floating on the stock market

OFFLINE

46 Out to lunch: Restaurant on the Barge, Belfast 48 Day in the life of: James McGarvey is on his bike 48 Quite a catch: Renault's Captur 58 The Chairman: Going to all the right places 62 Last Word: Nick Leeson BUSINESS MONTH 124-144 Royal Avenue, Belfast, BT11EB Editor - David Elliott

54

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

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

ELCOME to the May edition of Business Month, where we’re already well into an exciting month for Northern Ireland and its economy.

We’ve been in the pink since the weekend, when international cyclists of the highest calibre sped through the streets of Belfast and beyond during the Grande Partenza of the Giro d’Italia.

But we are also looking forward to the Balmoral Show, which kicks off at the Maze outside Lisburn in a matter of days. We’ve taken Balmoral as a springboard for a closer look at the agrifood industry.

And, as news filters out that Moy Park, our biggest firm, could be partly-floated by its parent company Marfrig, our cover story considers whether the time is right for companies here to take the plunge and join the lonesome First Derivatives and UTV Media plc with a London listing.

We also consider how the new enterprise zone in Coleraine will work out, and have a close look at recruitment and cyber-security in our Focus On section.

Texthelp is featured in our SME section, we’re off to Dubai in our holiday section — plus, resident party animal The Chairman has been up to his usual tricks, while Nick Leeson discusses phone hacking in the Last Word.

Enjoy.

12 May 2014 BUSINESS MONTH 3

NEWS BITES

7.7%

unemployment rate

26.3% 67.9% 23.1% economic inactivity rate

employment rate

youth unemployment rate

45.5% 6.3% long-term unemployment rate

claimant count rate

NI labour market survey

Warning sounded for Armagh Bramley ARMAGH apple growers must “use it or lose it” when it comes to the EU protected geographical indication (PGI) of the beloved Armagh Bramley.

The labelling means that only apples grown in Armagh can call themselves ‘Bramley' — Lough Neagh eels and ‘early' potatoes from Comber are the only other items from Northern Ireland to also hold PGI status.

However, PGI expert Dr Matthew O’Callaghan warned a meeting of the Northern Ireland Fruit Growers’ Association: “Having gained PGI status, it is very much a case of use it to boost income or lose it.”

He said a concerted effort could help boost Armagh Bramleys' profile, “gain more market share”.

Ulster Bank ends five years of heavy losses ULSTER Bank has turned the corner with its first profits since 2009, marking the end of five years of heavy losses for Northern Ireland's biggest bank.

The bank's all-Ireland results showed operating profit of £17m for January to April, contrasting with losses of nearly £1bn for the last few months of 2013.

Part of Royal Bank of Scotland, Ulster Bank has cut bad debts by 80% with “significant reductions” in its mortgage, corporate and small to medium-sized business portfolios.

Belfast wins global bid for 486 EY jobs BELFAST won out against a number of locations around the world to secure nearly 500 jobs paying salaries of nearly £40,000 at business advisers EY. It is the accountancy and consultancy firm's biggest expansion in Northern Ireland. At present it employs 145 people in Belfast. The announcement will mean 486 new jobs — in auditing and other roles — located in EY's Belfast offices by 2018.

The Irish League of Credit Unions brought its annual general meeting to Belfast's Waterfront Hall last month, with more than 2,000 delegates from around Ireland in attendance. Guest speakers Baroness Nuala O'Loan and Belfast's Lord Mayor Councillor Máirtín Ó Muilleoir joined the ICLU's president Martin Sisk to open the conference and address credit union representatives.

Schrader investment creates work for 241 CONTINUING a run of major job announcements, Schrader Electronics said it is investing over £56m and creating 241 new posts at its Carrickfergus and Antrim plants.

The jobs are to be added over the next three years. The firm, which manufactures tyre pressure monitoring systems, now employs around 1,000 people.

Enterprise Minister Arlene Foster said the new positions would create “£7m a year in salaries and . . . employment and training opportunities”.

Overseas tourists set to spend extra 33% NORTHERN Ireland could see foreign tourist spending rise by 33% to more than £314m by 2017, according to Barclays.

The research forecast that spending on retail, hospitality and leisure will jump as more

4 BUSINESS MONTH 12 May 2014

overseas visitors come to Northern Ireland, lured by sporting events such as the Giro d’Italia and TV programmes such as Game of Thrones which are filmed in the province.

It predicts overseas tourists will spend £148m on hospitality and leisure, up 32% from £112m in 2013. Retail spending is set to rise by 37% to £126m, up from last year’s £92m.

which ultimately required a rescue by bondholders.

His report found “overwhelming” evidence that Britannia chief executive Neville Richardson failed to leave the new business “in a good position” when he departed in 2011.

Executives blamed for plight of Co-Op Bank

THE Kremlin nightclub in Belfast — Northern Ireland's best-known gay venue — has gone on the market for £3m.

Commercial property agents CBRE has been appointed to market the bar and restaurant complex close to the city's Cathedral Quarter.

The site also includes Union Street Bar, where the restaurant is located, and The Shoe Factory Club, where Union Street's club nights are held.

The sale is expected to generate keen interest as it is located close to what will be the main University of Ulster campus.

A DAMNING report into the near-collapse of the Co-operative Bank has laid the blame on executives running the business in the wake of its merger with the Britannia building society.

Sir Christopher Kelly, author of the review, said: “This report tells a sorry story of failings in management and governance.”

The former Treasury mandarin was asked to investigate after the bank was found to have a £1.5bn hole in its balance sheet

£3m price tag for Belfast gay venue

NEWS BITES

Watchdog acts on electricity PAUL GOSLING

▲ EXCHANGE RATE

The pound strengthened against the dollar from $1.49 in July last year to nearly $1.68 in April.

▲ HOUSE PRICES

Northern Ireland house prices rose for the 10th consecutive month, according to the latest RICS/Ulster Bank residential market survey.

▲ MORTGAGE LENDING

Gross mortgage lending in the UK has jumped 33% in the past year, said the Council of Mortgage Lenders.

▲ ECONOMIC GROWTH

The UK economy grew by a slower-than-expected 0.8% in the first quarter of this year, according to the Office for National Statistics (ONS). .▲ UNEMPLOYMENT Unemployment in Northern Ireland rose by 0.4% to 7.7% in the quarter December to February. The UK rate fell in the same period to 6.9%.

▼ ENERGY COSTS

Seventy-one percent of businesses have experienced higher energy costs over the past year, as measured by the latest Quarterly Economic Survey by the Northern Ireland Chamber of Commerce.

ELECTRICITY prices in the province are to fall, following the ruling of a Competition Commission investigation into Northern Ireland Electricity’s pricing policy. The Northern Ireland Utility Regulator referred the matter to the Competition Commission after NIE had rejected the regulator’s proposed changes to pricing controls.

The CC concluded that elements of the price control conditions in place since 2007 now operate against the public interest. It has imposed changes, cutting NIE’s prices by 6.42% below the level proposed by the Utility Regulator — but rejected by NIE as not being sufficiently generous. The CC also instructed NIE to provide more transparent financial reports to the regulator.

Professor Martin Cave, chairman of the inquiry group, said: “We’ve undertaken a major redesign of NIE’s price control conditions and the new model will provide much greater incentives for the company to avoid unnecessary expenditure and to invest efficiently.”

NIE said: “A key aspect of the commission’s determination is the closer alignment of the regulatory framework and reporting arrangements with those applied by Ofgem (the GB regulator). NIE fully supports this change which should facilitate future price control reviews.”

▼ INFLATION RATE

The UK’s annual inflation rate fell to 1.6% in March, down from 1.7% in February, as measured by the Consumer Price Index. The Government’s target rate is 2%.

▼ STARBUCK SALES

Starbucks’ sales in Britain are down in the wake of its taxavoidance row. Revenues shrunk by 3.4% to £399.4m in the year to September from £413.4m.

Typical household bills are to fall by a cumulative £10 by the end of September 2017.

Manufacturing NI said that it is expecting costs for large commercial electricity consumers to be cut by around £15,000 over the next two years. However, its chief executive, Stephen Kelly, said the reduction was insufficient

to provide a competitively priced electricity supply system in Northern Ireland, where costs are the second highest in Europe. Mr Kelly also called for greater progress in the creation of an all-Ireland electricity supply market, given that electricity costs in the Republic are 20% below those of Northern Ireland.

Builders suffering shortage of skills

▼ ECONOMIC INACTIVITY Economic inactivity in Northern Ireland fell by 10,000 in the most recent quarter. The rate is now 26.3%, compared to 21.9% in the UK as a whole.

Manufacturing NI said that costs for large commercial electricity users are expected to fall by around £15,000 over the next two years

PAUL GOSLING SKILL shortages are holding back a recovery in Northern Ireland’s construction sector, claims the Royal Institution of Chartered Surveyors (RICS).

The latest RICS construction market survey has reported signs of recovery for the last three quarters.

But the survey also reported that nearly a third of construction sector employers in the province are having difficulty recruiting skilled people across a range of disciplines.

There are also skills shortages identified in the sector in Great Britain, according to the RICS. Jim Sammon, RICS Northern

6 BUSINESS MONTH 12 May 2014

Ireland construction spokesman, said: “The positive story is that the recovery in the construction industry is continuing, with the latest RICS survey showing that the workloads of chartered surveyors grew for a third quarter, and at an increased rate of growth.

“This is from low levels of activity after such a significant downturn, but this latest survey gives cause for optimism that the recovery is taking hold.

“The other side of the story is that with activity increasing, evidence of skills shortages is emerging. We are also getting indications from local third-level education establishments that enrolment levels for

construction-related courses are at low levels. With skills shortages emerging and the pipeline of professionals potentially hampered by fewer students enrolling on construction-related courses, this gives us real cause for concern.”

Mr Sammon added that students should not be deterred from studying at university in construction-related courses as a result of the problems of recent years.

“We hear from the local universities that employers are currently having difficulty recruiting because of the increasing demand and the lack of availability of students with the necessary skills,” he said.

NEWS BITES

2,000 jobs in string of expansions PAUL GOSLING THERE are optimistic signs for Northern Ireland’s labour market, with some 2,000 new jobs in the pipeline.

Concentrix is to recruit more than 1,000 staff in a substantial expansion of its existing operation in Belfast.

The company, is part of the Synnex Corporation, which employs over 800 people already in the city. Synnex is one of the world’s largest business process services providers.

Invest NI is providing £3.5m of support as part of the £36m investment in the Concentrix expansion. The company’s senior vice president, Philip Cassidy, said: “The support provided by Invest NI, the quality of people and the cost competitive business environment makes Northern Ireland a very attractive location for us.”

Around 330 jobs are to be employed in Londonderry, in a contact support centre operated by Convergys, which has previously had a base in the city under the name Stream — which was bought by Convergys in January. Invest NI is providing funding of £1.5m to support the project.

A further 75 jobs are to be created in Derry, with international law firm SmithDehn setting up a global media advisory hub in the city.

Around 100 people are to be recruited by Delta Print & Packaging. Belfast IT infrastructure business Novosco is to create 50 jobs. It currently employs 70 people at its Northern Ireland Science Park premises. Invest NI is supporting the expansion with funding of £624,000.

New television channel, IrishTV, is to engage 30 people in Northern Ireland as part of a total Irish workforce of 150 people.

And it is hoped up to 750 jobs will be created through an expansion of childcare provision for school-age children. Some 7,000 childcare places are to be made available under the Bright Start Childcare Scheme.

Variable rate risk for Northern Ireland PAUL GOSLING ANY interest rate hikes agreed by the Bank of England will disproportionately hit Northern Ireland, according to analysis conducted by Nottingham Trent University. Homeowners here have the UK’s second highest exposure to variable rate mortgages.

While only 22% of mortgages in the south of England are variable rate, some 79% of home loans in Northern Ireland will rise when interest rates increase. By contrast, just 21% of Northern Ireland mortgage

borrowers are on fixed rate loans, against 78% of those in the south of England who are protected from interest rate hikes.

Alla Koblyakova of Nottingham Trent University said: “We have found that there is a persistent tendency for people in Northern Ireland to hold variable rate mortgages, which is in stark contrast to people in London and the southern regions, who have a tendency towards longer term fixed rates.

“Our research suggests that this is a definitive feature of the

UK mortgage market and the recent credit crisis has only added impulse to this trend.

As variable rate mortgages are more sensitive to financial shocks, it’s a matter of national economic concern that there is such a geographical imbalance in the way that mortgages are distributed in the UK. “It’s very important that policymakers are fully aware of this when considering future monetary policy decisions, as an increase in interest rates is likely to affect poorer regions much more severely than others.”

Nama’s Eagle sale is a ‘shot in the arm’ for construction sector PAUL GOSLING IRELAND’S National Asset Management Agency has sold its ‘Eagle’ portfolio of property loans in Northern Ireland to one of the world’s largest private equity funds, Cerberus Capital Management.

The deal was finalised after Pimco — a division of insurance and asset management giant Allianz — pulled out of negotiations. Final terms were achieved through an open tender process.

The portfolio consists of loans owned by Northern Irelandbased debtors and secured by assets in Northern Ireland, the Republic, Great Britain and other European locations.

The par value of the portfolio is £4.5bn, but Cerberus is likely to have negotiated a substantial discount on this. The sale represents the largest portfolio disposal by Nama and is a clear signal of optimism in the Northern Ireland property market.

John W Snow, chairman of Cerberus Capital Management, said: “This investment, and the underlying assets in Ireland and other European markets, will be an important foundation for our overall European strategy.

“Cerberus is a patient, longterm investor and has a wellestablished track record of making significant improvements to the assets that it manages. We believe Cerberus has the ideal base of expertise and experience to manage the Eagle

8 BUSINESS MONTH 12 May 2014

The National Asset Management Agency has sold a portfolio of Northern Ireland property loans to private equity fund, Cerberus Capital Management portfolio and will be a strong partner for Nama, for Northern Ireland and for all the stakeholders associated with this transaction.”

Northern Ireland Finance Minister Simon Hamilton said the sale, saying it would free up development potential. “A firm like Cerberus, which takes a long-term view and has the scale to invest in its newly purchased assets to realise their value, is exactly what Northern Ireland

needs. This deal could be the shot in the arm for our construction sector that we so badly need.

“Nama’s Northern Ireland portfolio contains assets with considerable development potential. In housing, offices and retail, there are opportunities everywhere. This deal can unlock those opportunities and allow NI to develop and grow and, in the process, provide a much-needed stimulus for the local construction industry.”

NEWS BITES

Plan for boosting skills now in place PAUL GOSLING EMPLOYMENT Minister Stephen Farry has launched a plan to improve the skills based for Northern Ireland’s manufacturing and engineering employers.

“If we are to enable Northern Ireland to compete globally, it is fundamental that we increase our export base and in this context, advanced manufacturing and engineering services will be pivotal,” said Mr Farry.

“To achieve these aspirations, it will be essential that the workforce has the skills and technical knowledge to produce innovative products and to adapt to the challenges facing the sector.”

The working group he set up to identify and address the skills challenges faced by this industry has developed an action plan “which will help to enhance the quality of the workforce, maximise employment opportunities and give our local advanced manufacturing and engineering services industry a competitive edge in the global marketplace”, said Mr Farry.

The plan was welcomed

by CBI Northern Ireland assistant director Kirsty McManus, who said: “In order to meet the demand for 3,000 people per year entering the sector we, along with many others in the business community, saw in 2012 the urgent need for a structured plan which would help the local economy achieve its potential in this crucial field.

“The aerospace, engineering and manufacturing sectors have long called for such a strategy and its publication is a testament to the drive of companies like Bombardier, Seagate and AJ Power in terms of seeing it realised.”

The Federation of Small Businesses warns that employers are only starting to regain confidence to take on more staff

FSB opposed to legislation of flexible working for parents PAUL GOSLING THE Federation of Small Businesses (FSB) has criticised proposals to introduce new parenting and adoption rights for working parents in Northern Ireland. It says employers should be allowed to offer flexible arrangements for new parents, without being required to do so by law.

“Businesses are only just starting to gain confidence again to take on additional

10 BUSINESS MONTH 12 May 2014

staff, so the Executive needs to be very mindful of the danger of placing further burdens on employers that could deter businesses from recruiting,” said Wilfred Mitchell, the FSB’s Northern Ireland policy chairman.

Legislation is to be introduced in the Assembly by Employment and Learning Minister Stephen Farry. Under the proposals, shared parental leave and pay would be established, allowing parents to decide between them

how they balance care arrangement for newly born or newly adopted children. The legislation would also extend the right to request flexible working.

The Department for Employment and Learning also announced that it is to conduct a review of the use of zero hours contracts in Northern Ireland.

Employers’ use of zero hours contracts combined with an exclusivity obligation on employees will be examined as part of the review.

NEWS BITES

Men with accounting still rule CEO roost NEW research has shown that 50-plus male accountants still dominate the chief executive position in UK companies, despite pressure from the government for diversity on boards of directors.

The figures from recruitment group Robert Half, in its FTSE 100 CEO Tracker, analysed the background of companies' chief executives and revealed that half have an accountancy or financial management background.

The research came as the Belfast Telegraph’s Top 100 Northern Ireland Companies 2014 featured a woman at the helm of the number-one company for the first time — Janet McCollum, managing director of Moy Park.

Phil Sheridan, Half's UK managing director, said: “The

New research shows that half the chief executives of FTSE 100 companies have an accountancy or financial management background top companies.” doubling of the attrition rate A similar study released by and the introduction of more PwC's research arm Strategy& advertising and marketing looked at the number of new specialists shows movement in CEO appointments globally the market, but the old guard and found women made up just of finance still holds sway with 3% of the global incoming class executives with a background in 2013, a 1.3 percentage point in accountancy and finance drop from the previous year. holding the reins of the UK's

It found that over the past 10 years, the US and Canada have had the highest share of women CEO appointments at 3.2%, while Europe stood at just 1.4%.

Its survey also shows that women are more often hired from outside their company, and are more often forced out of office than male counterparts.

Strategy& predicts that by 2040, women will make up one-third of new chief executives globally.

While Janet McCollum is now the first woman to lead a number-one company in Northern Ireland, there are just four other firms in the Belfast Telegraph Top 100 Companies led by women.

The arrival of Ms McCollum to the Top 100 also coincides with the departure of another female CEO — former Translink boss Catherine Mason, who has been replaced by interim chief executive Gordon Milligan.

However, Northern Ireland Water is now headed up by Sarah Venning, another female newcomer. Alliance Boots’ Bernadette Lavery, Ulster Bank’s Ellvena Graham and the Progressive Building Society’s Darina Armstrong make up the remainder of the famous five.

12 May 2014 BUSINESS MONTH 11

NEWS ANALYSIS

On road to recovery With many predictions that the days of austerity are behind us, Michael Hall, managing partner of EY Northern Ireland, warns there’s still hard work ahead

A

FTER years of austerity and negative growth forecasts, economic recovery is finally under way in Northern Ireland with employment levels rising and confidence returning. The majority of economic commentators are now forecasting growth in 2014 and EY’s Item club is forecasting real wage growth.

Despite this good news and improving sentiment, not all economic indicators are heading in the right direction.

Northern Ireland’s biggest economic challenges remain its dependence on public spending, compounded by the small size of its private sector and export base along with over-reliance on the economic direction of the UK and Ireland. The rate of recovery is forecast to be below the corresponding rate in the UK and many consumers will experience little improvement in their personal finances.

However, after the worst recession in living memory business is re-establishing confidence and this confidence will determine the speed and extent of our economic recovery. At EY’s recent budget briefing in Belfast we carried out polling questions with over 150 business executives — 55% of delegates indicted they expect to make significant investment in 2014. This is encouraging and highlights that businesses are resilient and will emerge from the recession stronger than before. It was equally encouraging to see 59% said current economic conditions are improving.

Throughout the recession the agri-food sector has shown resilience and consistent growth.

This is Northern Ireland’s biggest export sector and continues to show strong levels of growth. Other traditional sectors are also looking to export markets. Local construction companies, a sector impacted the worst by the recession, are increasingly looking to the expanding infrastructure spend in the UK. Elsewhere local soft-

ware and IT companies biggest issue is the need for more staff and some have to look overseas to fully staff their businesses.

Great Britain remains the core destination market for the external sales of Northern Ireland goods, accounting for 60% of trade. Next are Europe (11%), the Republic of Ireland (10%), and North America (8%). Exports remain crucial to the fortunes of the all island economy.

The Executive continues to make a hard push on inward investment and it has secured some notable recent inward investment successes. Simultaneously, the private sector is promoting the importance of Northern Ireland as a place to invest and work in order to accelerate growth through the Growing Something Brilliant agenda.

Planned investment from foreign direct investment (FDI) has totalled more than £2.5bn in Northern Ireland over the last decade, resulting in the creation of more than 26,000 jobs.

The majority of these jobs, just shy of 19,000, have been created in the services sector. North America has been the primary

12 BUSINESS MONTH 12 May 2014

source of FDI, with the US and Canada alone making combined investment in excess of £1.5bn in over the last 10 years.

All eyes will be on the Scottish independence referendum, after which we understand a decision will be made on Northern Ireland’s corporation tax, which will play a vital role in continuing to attract FDI. After a prolonged financial crisis, there is now evidence that businesses are turning a corner and identifying growth opportunities. The quality of our local businesses should never be doubted.

Growth requires funding and it would be difficult to say credit is flowing. The recent recession and credit crunch has understandably had knock on consequences to business funding. Businesses need to start thinking more broadly than banks for funding.

The main local banks are all actively chasing good lending opportunities. Balance sheet issues have been dealt with and the banks need profitable business to get them back to profit.

If you have a strong business looking to expand then there

will be competition by the banks for your business.

Outside traditional bank funding the range of options has rarely been as plentiful and Invest NI must be congratulated for the support they have provided. There are now two new Northern Ireland venture capital funds, Crescent Capital and Kernel, and Invest NI has committed £15m of funding to each fund, which has the potential to invest over £48m in SMEs over the next five years.

Overall business sentiment is on the rise. Recent measures announced in the Budget, such as enhanced tax relief and reducing employers National Insurance Contributions (NIC) costs, should have a positive impact on businesses here. Interestingly, at EY’s budget briefing last month, 43% of attendees indicted a reduction in employment taxes stood out as the most influential factor impacting investment. Therefore, we cannot become complacent and there are very clear indicators that more needs to be done to support business and exports, enhance inward investment and employment.

NEWS ANALYSIS

Property hopes brighter All the signs are that the market across the board is recovering but the residential sector is leading the way, says Mark Carron, associate director of Osborne King

C

AUTIOUS optimism, probably the most widely used phrase to describe the Northern Ireland property market for 2014, is giving property investors and developers both hope and confidence that we have eventually turned the corner and market conditions are beginning to improve.

Since the downturn in 2008, market conditions have continued to deteriorate, however, increased market activity in 2013 going into this year indicates the market is finding its feet again. That said, we are starting from a very low base in terms of volume and value.

During 2013, Osborne King was involved in the disposal of over 30 pubs and hotels. Most of these sales emanated from receivers or administrator clients. Key sales included the CHA (Diamond) and Kurkova portfolios, totalling in excess of 20 pubs with a combined value in excess of £7m. During the first quarter of 2014, sales have continued in a similar vein,

with notable deals including The Leighinmohr Hotel, Ballymena; Harry’s Bar, Banbridge; and Wine & Co, Holywood. We expect licensed transactions to slow down in 2014, as distressed appointments dwindle and operators go through a phase of reinvestment with banks beginning to lend again to established operators.

Numerous new bars and restaurants will continue to open throughout Belfast. Overall, the hospitality sector seems positive, although issues such as VAT, excessive commercial rates and antiquated legislation remain factors.

Similarly for the retail market, rates are still a major obstacle to recovery, coupled with the growth of online sales and poor consumer confidence.

Thankfully, we are seeing a number of locally owned businesses expand, as opposed to national brands, who are reluctant to enter into or grow their market share locally due to reasons such as burdensome rates liability. We expect this sector to pick up, notably in Belfast,

14 BUSINESS MONTH 12 May 2014

with the province improving gradually over the year and beyond.

The Belfast office market is also showing signs of recovery.

In excess of 400,000sq ft of space was let in 2013, the highest for some time. Notable lettings were completed to, among others, Aepona, Allstate Insurance, Citi Group and Land & Property Services.

A lack of new speculative development is putting pressure on rents as supply diminishes, with prime grade-A rents now reflecting £12-£13 per sq ft. This lack of development could impact on job creation as inward investment companies struggle to find accommodation — a risk that Invest NI and the Executive should note.

The most positive signs of recovery are in the domestic housing and development land markets, with the return of investors, first-time buyers and house builders. This market is being fuelled by a sustained period of low interest rates, a protracted inactive market, improving credit conditions and a

more positive economic outlook. Evidence of this flourishing market was reflected in our March auction, where bidding was brisk, in particular for the residential lots. All of the houses and development land were sold. A 7.7 acre plot with planning in Portadown sold for £540,000, 50% over its reserve and a site in Lurgan went for £145,000, 90% over its reserve.

Finally, another common term in the market at present is ‘loan sales’, where a financial institution sells off its loan portfolio. The most recent and largest to date was Nama’s Project Eagle loan portfolio, acquired by the world’s leading private investment company, Cerberus Capital, for a reported £1.3bn. The view seems to be that in the short-term, debt sales will not impact greatly on the local market. We do not envisage a flood of sales which would undo the recent revival.

Overall, the green shoots of recovery are evident. A slow and steady recovery should assist in long-term sustainable property returns.

ECONOMY WATCH

Seeds of

Agriculture has been one of Northern during the downturn but as our promising farmers are still faced with

N

ORTHERN Ireland has been experiencing something of an economic recovery, with demand returning for various sectors.

However, total private sector output still remains more than 14% below its pre-downturn peak, and the construction sector is still suffering a lack of demand with output less than half of that of mid-2007.

By contrast, strong demand is a given within the agri-food sector. Indeed, the fact that the UK has a trade deficit in food of more than £18bn per annum indicates the scale of food demand, and the potential for local firms to grow significantly by capitalising on this.

Over the last number of years, the demand for agricultural products has soared and this trend is set to continue. ‘Buy farms, not flats’ was the headline on a recent editorial of the Money Week magazine. The publication highlighted that one of the greatest global bull markets ever seen is taking place within agricultural land.

But while agriculture enjoys stability in demand, it has volatility in spades elsewhere.

Northern Ireland’s agricultural sector, like the industry worldwide, has traditionally been the sector most exposed to global markets, exchange rates and adverse weather conditions. As a result, it experiences more volatile conditions than any other sector. Annual doubledigit increases or decreases across a range of indicators are par for the course.

Despite this volatility, the agriculture and wider agri-food sector has been one of the best performers during the downturn. Output, sales and employment are all up relative to 2007.

Gross agriculture output by volume was up 4% in real terms, although gross input was up four times this figure. As a result, gross value added actually fell by 10%. However, unlike other

AGRI-FOOD

Richard Ramsey

Chief economist Ulster Bank sectors, gross value added and output are not the key indicators to measure agricultural performance.

Within agriculture, however, fluctuations in prices and subsidies mean the key performance measure is income and profitability, not output. 2013 was a strong year for the agriculture sector as far as farm income was concerned with total income from farming (TIFF) increasing by 31% in real terms. However, this followed a decline of the same amount in 2012 and highlights the volatility within the sector. Last year’s increase was attributed to a rise in producer prices, notably the 21% rise in milk prices, and an increase in the value of farm subsidies.

Despite volatility in recent years, last year TIFF was still some 27% higher in real terms relative to 2007, which was a bumper year for the agriculture sector. TIFF increased by 48% in real terms in 2007. This figure jumps to 88% when comparing the rise between 2006 and 2013. At a headline level,

16 BUSINESS MONTH 12 May 2014

comparing the performance of the local agriculture and construction sectors over this period could be summarised as seven years of feast and famine.

The agriculture sector has been one of the few areas to be fairly resilient to job losses. Over the six-year period from Q4 2007-Q4 2013, agriculture, forestry and fishing recorded a rise in employment of 6.5% (780 jobs). If the rise in employment numbers in the food processing sector is included employment has risen by an extra 1,200 jobs.

This position of net employment growth compares favourably with the Northern Ireland economy as a whole. Over the corresponding six-year period, the average decline for all sectors of the economy was 3.1%. This is after 36% of the jobs lost during the recession have been recouped. The average for all sectors conceals the 36% decline in construction employment over the past six years.

Analysis of Northern Ireland’s manufacturing sales and exports survey also reveals that

the local food, drink and tobacco (FDT) sector has been the star performer throughout the downturn. In 2012/13, NI’s FDT sector posted annual sales of £8.8bn which represented more than half of all manufacturing sales. This represented a rise, in real terms (adjusting for inflation and exchange rates), of 4% or £343m, on the previous year’s record high. Over thef our years to 2012/13, FDT sales to the Republic of Ireland and to Great Britain have increased cumulatively by 46% and 34% respectively.

Given that FDT accounts for more than half of total manufacturing sales, its performance has concealed even greater declines in other sectors. Stripping out FDT sales reveals that in 2012/13 the remaining subsectors have sales levels 24% below the 2008/09 peak. At a market level, manufacturing sales to the RoI (excluding FDT) in 2012/13 were a staggering 61% below their 2007/08 levels.

The surge in Great Britain sales largely stemmed from significant moves in the sterling exchange rate against the euro. During the downturn, the big moves in the sterling/ euro exchange rate resulted in a marked appreciation in the euro against sterling which made Irish exports to GB uncompetitive. Local manufacturers stole a march by displacing their Republic of Ireland counterparts as suppliers to the GB market. Looking ahead, however, the exchange rate tailwind that the agri-food sector has enjoyed throughout the downturn appears to have run its course. Given the strength in sterling against the euro in 2013/14, this price competitiveness should ease.

That said, with wider conditions for the industry, notably the high demand from within the UK, in place to support growth, the agri-food and drink industry should enjoy a bright future into the years ahead.

success Ireland’s best-performing sectors experts note, while the future looks volatility and succession problems

K

EY to every business is foresight and planning. For farmers, however, the factors driving their businesses are dogged with risk and uncertainty. Input costs are a classic example with the prices of fuel, fertiliser, feed and foreign exchange constantly changing in volatile world markets. Farmers simply can’t predict their cost of production.

On the other hand the price they receive for their products is not tied to these volatile costs. The margin therefore varies from year to year. It’s not a logical business to be in.

Thankfully farmers persevere because they believe in the long haul and consider that things will balance out over time.

One current uncertainty is the Common Agricultural Policy (CAP) reform. Our farmers would be happy to work in a subsidy-free world, if they thought the market would compensate accordingly. That’s not going to happen any time soon. Until then EU subsidies will provide a significant proportion of most farms’ incomes.

However, government here has yet to decide how CAP reform will be applied in Northern Ireland. There are many conflicting interests and no outcome which suits all the stakeholders.

The consequence is a standstill for farm investment and production decisions. No business can afford to stand still but at present our farmers have little choice. The decision will be made eventually. In the interim it would benefit foresight and planning if farmers knew that they had a period of several years to bed in whichever reform is to be adopted.

The success of any business depends on its people. This is problematic for farmers. Farm businesses are often husbandand-wife partnerships, the former being everything from production director to operative, the latter being everything

FARMERS

Colin McDonald

Chief executive of the Royal Ulster Agricultural Society from financial director to office junior. There is no cover for sickness or holiday save that which is bought in. There’s maybe one other man employed and family members may help on a part-time basis.

Essentially the farm income can’t support full employment.

This becomes a serious issue when planning the business succession. How will the farming couple be able to retire?

What will fund their pension?

Who will take over? How will the siblings get a share of the assets? A plus factor in the CAP proposals is the additional support earmarked for young farmers. In the first instance this will bring down the average age of farmers. The current figure of 58 is unsustainable.

Some farmers are looking to integration for a solution. In this regard the poultry sector here has a world-class player in Moy Park. It contracts farmers to grow chicken to a specified size and quality. The farmers are paid a margin over feed accordingly. Moy Park looks

after processing, product innovation, marketing, deals with the supermarket and manages the risks. It’s a system that attracts bank funding. Derivatives of the model are now being looked at seriously by the egg, pork, beef and dairy sectors. As natural entrepreneurs, farmers are independently minded. The issue is that it’s not easy to move away from the way things have always been done, or to form groups or trust tie-ins with processors.

The Going for Growth document launched at last year’s Balmoral Show envisages the need for a £400m investment in agri-food up to 2020. Delivery of this will represent a tremendous pump priming exercise for the industry.

There’s an old adage that the fourth son in the farming family becomes the engineer. These days it’s just as likely to be the daughter. It reflects the fact that farmers here have an innate ability to come up with better ways to do things. Better being defined as a job being

done more efficiently in terms of labour used, time spent and cost incurred. All businesses need to innovate and, on a micro level, farmers here do just that. However, they have to compete in a world market with access to the results of research and innovation on a huge scale. Our institutions here can more than match that research and innovation.

Many astute farmers here incorporate the latest thinking in their businesses. The issue is how to transfer the technology to micro-level. It’s how to get the most up-to-date ideas to men who would be willing by nature to apply them.

SMEs can fail when they can’t grow big enough to compete or grow too big too quickly. Farm businesses here have to face both these issues at the same time. A generation ago a dairy farm was financially viable with about a quarter of the cows needed today. Thus farmers today need about four times the land needed previously. This additional land is rented were possible or purchased as a necessity. As a result farm businesses are generally asset rich and cash poor. It means our farmers have to trade with extensive borrowings which is frightening in the current financial climate.

One thing is not an issue for our farmers is integrity. The term food security is now common parlance. This means ensuring we have sufficient food to eat as world demand outpaces supply. It means ensuring a safe food chain from farm to fork. These requirements can only be delivered by farmers with the skills to increase production sustainably and the integrity to do that right every time.

Farmers such as our farmers.

The Royal Ulster Agricultural Society organises the Balmoral Show which runs from May 14 to 16

12 May 2014 BUSINESS MONTH 17

COVER STORY

MAKE IT

YOUR AIM

Northern Ireland companies have tended to shy away from the stock exchange, but right now there are lots of good reasons to go for a public listing, as Rebecca Kincade discovers

T

HE past 18 months have seen a strong pick up in the initial public offering (IPO) market in the UK. Yet Northern Ireland lags behind the trend, with a relatively low level of listed businesses.

Colin Walsh, managing director, Crescent Capital, and chairman of the CBI in Northern Ireland, even describes the level as “chronically low”.

Crescent Capital is a Belfastbased venture capital fund manager. Their primary focus is on Northern Ireland companies operating in the information technology, life sciences and manufacturing sectors.

Mr Walsh told Business Month: “As it stands there are only two publicly listed companies in Northern Ireland. The takeover of Andor by Oxford Instruments earlier this year means that only First Derivatives and UTV Media remain. Andor was the last local company to go public and that was back in 2004.

When compared on a per capita basis to Scotland or Wales, we should have dozens.”

Once a company opts to go public it has several obligations.

It must declare its directors and shareholders, file regular accounts and provide a full picture of its ongoing performance.

That, Mr Walsh says, is one of the main stumbling blocks for Northern Ireland business owners: “With continuous announcements about and analysis of a company’s trading performance, publicly listed companies offer their clients much better visibility and secu-

rity. People in Northern Ireland are cautious about this scrutiny, but realistically the worst thing that can happen is embarrassment over a poor performance.

“Even if a public company is performing badly they can still usually raise additional capital on the stock exchange to rescue the business. This is why [they] generally offer a more secure option for banks, allowing greater access to funds when required.”

Mr Walsh urges more companies here to consider listing as a future move. He recommends that any emerging tech business generating over £10m in sales, with a strong growth story, should look into the possibility.

More traditional businesses would need to have sales of over £50m to be seen as a contender.

“Choosing to go public brings added visibility. When Andor made the move, they were a university spin-out business.

18 BUSINESS MONTH 12 May 2014

Even when they were securing global sales, that label stuck.

Going public gave them more credibility with their clients and their suppliers,” he says.

In order for a listing to be successful a business must be able to demonstrate an opportunity for strong growth, have the ability to make good margins and have a strong management team in place that are prepared to withstand the public visibility.

Mr Walsh says: “We are now seeing a wave of companies across Great Britain going public, but not in Northern Ireland.

There are less barriers compared to a few years ago. Investors are ready to invest in new and emerging companies. The scrutiny needs to be seen as a positive as it drives good corporate governance and puts pressure on directors to run a professional business. Local companies may need someone to hold their

hand to take them through the process and that is part of the problem we are facing. We don’t have enough good role models. I am very concerned that we may have no public companies at all in a few years rather than the dozens we should have.”

AIM is the London Stock Exchange’s market for smaller companies. A range of businesses including early-stage venturecapital backed, as well as more established companies join AIM in search of access to growth capital. To join a company has to release a minimum of 15% of its shares, with approximately 25% required for the full exchange.

Mark Fahy, head of UK small and mid-caps at the LSE, comes to Northern Ireland monthly to raise awareness of the benefits of floating. He believes that, while a lot of work is needed to educate the marketplace, there is a growing level of interest coming from local companies.

“Each company needs to assess their own reasons for wanting to float. Perhaps they need capital, or want shares as an acquisition currency. They might want to maintain key employees, build credibility or open up broader access to finance. For some, it could be an exit strategy or simply the next step in the company’s forward movement,” he says.

Mr Fahy meets with interested business owners, taking them through the process. He engages with advisors, accountants, lawyers and venture capitalists through events and round table discussions, promoting the value of listing.

“Interested companies need

>> Turn to page 20 12 May 2014 BUSINESS MONTH 19

COVER STORY >> From page 19 to draw together a team of their own trusted advisors from a very early stage. They need to find people, with expertise in the market. This is the strongest pipeline we’ve seen in the IPO market for a long time and the support is out there. AIM has some positive changes coming up that will encourage more movement. From the end of this month it will be exempt from stamp duty, making it a great option for smaller, fast-growing companies.”

Alastair Keith, corporate partner at lawyers A&L Goodbody, has advised on a wide range of transactions both at a national and multi-jurisdictional level.

He specialises in acquisitions, venture capital, group reorganisations, joint ventures and initial public offerings.

He says: “IPOs are tied to the economic success of a region so for the last few years they haven’t been a realistic option.

We are now seeing that change and the outlook is healthy for 2014.

“Northern Ireland has a historically low level, driven by a reticence of local owners to put their companies in the public

20 BUSINESS MONTH

domain. This is an entrepreneurial society but many familyowned businesses don’t want to give up the level of control that is needed.”

Mr Keith is, however, noticing an attitude change. “There is a lot of ambition out there. Businesses are hoping to grow and they aren’t discounting IPOs. With access to funding providing a barrier, the new generations of owners and directors are realising that this can be a good choice for them. I think we

12 May 2014

will see an organic rise in local publicly listed companies.”

Going public can be an expensive process. The business will need to appoint a nominated advisor, or nomad, to help market the company ahead of listing. Accountants and lawyers are also needed.

Mr Keith says: “Listing can be more expensive than taking on other forms of finance, but what tends to happen is that when you are looking at how much you are hoping to raise you build

the costs into that amount so it shouldn’t impact on the business.”

The message from advisors is that the market is good for IPOs at present.

There’s a window of opportunity for Northern Ireland companies to take the next step if they are considering going public. It remains to be seen how long this window will stay open and whether any of our business owners will use it to take the leap into the public domain.

NEWS ANALYSIS

Getting crowded out Crowdfunding is flying along, but is it going too fast?

Alan Watts, director of Halo, the NI Science Park-based business angels, tries to help you keep the wheels on

Y

OU can’t have failed to catch some of the buzz about crowdfunding — and the UK is leading the world in many aspects here. For example, crowdfunding generated £939m in 2013 in the UK and this is up 91% from 2012.

Two years ago it stood at only £300m.

The figures are amazing, but I foresee trouble ahead.

First of all, what is crowdfunding? Actually it’s a whole raft of different things, but all with the common theme of a lot of people putting some money into something enabled by a website. Here are some of the different flavours: Peer to Business (P2B) lending: Companies can borrow money from a group of people, cutting out the banks. Companies pay (much) lower interest rates and lenders get much higher interest in return, often well over 10% Invoice trading: Just like P2B but with the group of individuals acting like factors, ie they ‘buy’ the invoices as companies sell their goods Equity-based crowdfunding: This time the crowd invests in shares, usually in small amounts, so spreading the risk over many shareholders Reward-based crowdfunding: Just like equity, but no shares are given. Instead the crowd hope to get a product, eg a new type of watch or tickets to a theatrical production, that their money has helped develop There are others, including the largest of all which is — believe it or not — donationbased crowdfunding, where the crowd just give money.

And the growth rates are just phenomenal — 618% for equity and 211% for debt in the UK in 2013. In fact the report from innovation charity Nesta from which these figures come states: “We can cautiously predict the United Kingdom alternative finance market will grow to £1.6bn in 2014 and provide £840m worth of business fi-

nance for start-ups and SMEs”.

And they also say that 5,000 start-ups and SMEs received some form of crowd funding in the last three years. This is really good news and shows that the miracle of money flowing into new, small but innovative companies is somehow actually happening.

It just seems too good to be true, doesn’t it?

Let me state right now, that I’m a big fan of crowdfunding. I see it as an important and longterm part of the entire access to finance landscape and it most certainly isn’t going to go away.

And Halo has partnerships with two major crowdfunders Seedrs and Crowdcube to ensure Northern Ireland companies get their fair share of the money.

However, I do think these growth rates can’t continue and

12 BUSINESS MONTH 12 May 2014

also that two major bumps in the road are on the way.

Firstly the report highlights that the number of what they call “active backers and donors,” ie, the crowd, is continuing to grow. It is now 9.4m people in the UK. The UK population is 64m, so already 15% are sticking money in. And the point must be reached soon where this must taper off.

There are only so many people with the money, the interest or the plain stupidity to put money in. And the UK government is actively taking steps to regulate who can get involved, so that the innocent, or those who don’t understand the risks, are largely excluded from being able to do so — and that’s a good thing.

So there will be a ceiling on those putting money in.

And then there are the fail-

ures. Crowdfunding is new, fashionable and even ‘cool’.

This is fine and dandy until some of the companies receiving the money crash and burn.

In the angel world where I work, the percentage of failures is well over 50%. So there will be losses, bad headlines and much wailing and gnashing of teeth.

So hold tight, it’s going to be a bumpy ride and the paint may get a bit scratched. But the wheels will stay on and crowdfunding will come through to play a major part in developing innovative companies.

And we’ll all benefit from that.

More information about Halo, the Northern Ireland business angels, can be found at www.haloni.com . Alan can also be contacted through this site.

BREAKING THE MOULD

Cyclist sees the sense Software engineer Philip McAleese tells of the flash of inspiration that led to the invention of the world’s first intelligent bicycle light Name: Philip McAleese Company: See.Sense I got into business because...

I’m an engineer and a cycle commuter. While I was living in Singapore and on my daily commute, I cycled through quite busy traffic. It was here I realised the importance of staying visible on the roads at all times.

On one particular commute, I looked at the smartphone on my handle bars and had a lightbulb moment — I realised that the sensor technology in the smartphone device could be applied to a light. It would make a cycle light bright when I needed it and conserve energy when I didn’t need it.

From there I decided to create the world’s first intelligent bike light, able to sense and react to the cyclist, the road, and its environment to improve visibility — See.Sense. I moved back from Singapore to Northern Ireland, and, with my wife Irene, an experienced project manager, we focused exclusively on establishing See.Sense.

Philip and Irene McAleese of See.Sense

I didn't always do this...

I have over 20 years’ experience in electronic and software engineering. I graduated from Queen’s University Belfast with a Bachelor of Engineering (electronic and software engineering). Following university, I spent two years designing air traffic control simulators for National Air Traffic Services.

I then went on to design, build and maintain trading systems for several multinational investment banks. I held a number of vice president and director roles and delivered dozens of large projects incorporating both hardware and software.

understanding of both that has allowed me to be able to design both the electronics and the complex embedded algorithms that make See.Sense possible.

Starting a company from scratch and taking on ambitious goals for our future is challenging but also exhilarating. It’s been wonderful to be recognised as a best Early Stage company in Northern Ireland at the InterTrade Ireland Seedcorn Investor Readiness competition, as well as Breakthrough Company of the Year from the Invest NI Propel Programme, and also a winner of UK Trade & Industry Global Jumpstart Competition.

The best thing about my work is...

After working my way up the managerial ranks in the investment banking world, it has been wonderful to get back to my engineering roots and do something I really enjoy.

Not a lot of engineers have knowledge of both software and hardware, and it’s the deep

The person I take inspiration from in business is...

There are two people. Firstly, Richard Branson, because he has a very good way of not looking to, but achieving a huge amount and instilling values into his organisations that allow them to have a true sense of identity in order to excel. Secondly, James Dyson because he

24 BUSINESS MONTH 13 MAY 2014

had a new technology product and faced repeated setbacks and was sufficiently dedicated to overcome them all and be successful.

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

We have ambitious goals to create a global cycling technology and software company and this means we have also created an extremely busy agenda for ourselves. As parents of two young children, we’ve had to work hard to ensure we allow time for family among the fast pace of being a business start-up.

We’ve gone from a concept to having a product released to customers in under a year. This included establishing our business model, running a successful Kickstarter crowdfunding campaign, establishing the production process and routes to market, moving into a small office and starting the recruitment process for employees, to now seeking investment. While

exhilarating and exciting it is also a lot of work and we’re thankful to have had support from our families.

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

Ensure you have a good social network of support around you.

Tap into the start-up networks around and learn from your peers as well as established names. In Northern Ireland there is a great architecture of support and we would highly recommend the services of Invest NI, the Propel Programme, InterTrade Ireland’s Seedcorn competition, as well as the more informal peer support for start-ups at events like The Friday Night Mashup.

In 10 years time I hope to be...

Retired, living on an island!

I couldn't go to work without...

A freshly ground coffee in the morning, and a brisk cycle ride to fuel both body and brain!

AND I’LL TELL YOU ANOTHER THING

Enjoying taking the long route From operational research in the aircraft industry to chief executive of a software firm focused on the detection and analysis of cancer tumours. Des Speed tracks the journey Name: Des Speed, CEO of

PathXL, based at Northern Ireland Science Park, and former chief executive of Lagan Technologies

My first job was…

My first job was in operational research in the aircraft industry.

After some years in that role, I switched across into computer software, which has been my long-term career since then in a wide variety of organisation types and sizes. I’m fortunate to have learned greatly from this variety of experience.

The person who taught me how to succeed was…

Nigel Wilson, now chief executive of one of the largest companies in the UK. As my boss, he provided me the opportunity to become a founder director of Sx3, then a subsidiary of the Viridian Group. Nigel taught me that with visionary leadership, creativity, confidence in people and boundless energy, great things can be achieved — way beyond the typical expectations of “business as usual”. He also took a risk in backing what he saw as potential in me, when others weren’t so sure — that gave me more confidence to back my own judgment.

My business mantra is…

Persistence, persistence, persistence.

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

I’m now chief executive of PathXL, a company that focuses on the detection and analysis of cancer tumours using a type of software called digital pathology — a unique mix of generally available software with highly specialised research and mathematics.

For me, this is a long way from some of my original roles in aircraft manufacture and electricity distribution. I’m fortunate to be surrounded by an outstanding and very dedicated team. We have launched ground-breaking new products, the first and best of their kind in the world. These are targeted

Entrepreneur Des Speed, left, with Peter Hamilton of PathXL at helping improve timescales and consistency in cancer drug discovery and research.

In 10 years’ time the world will…

We will be even more overwhelmed by the pace and volume at which information is available — at personal, social network, organisation and government levels. This will create so many more challenges to distil what is useful, relevant and interesting — separated out from all the loud ‘noise’ of messages that are pushed at us through so many electronic and traditional channels of communication.

My one business regret is…

I’m fortunate not to have any significant business regrets. If

26 BUSINESS MONTH 12 May 2014

I had found the opportunity, I would have moved earlier from the larger company cultures where I had worked into entrepreneurial business growth.

Entrepreneurship isn’t for everybody — there are many risks and opportunities to fail as well as succeed. However, what drives me is a huge sense of achievement in creating business propositions and employment opportunities from scratch. I also believe that entrepreneurial businesses have the potential to create cultures where everyone in a company feels that they make a difference — which they do.

And that for the long-term health of our economy, we must have strong, vibrant, thriving indigenous companies that create experiences and role models

for future spin-outs, business growth and wealth generation.

My one piece of business advice is...

Always think about what customers want — today and into the future. The acid test of any business value is that customers like and want to buy these products and services, rather than spending their money on something else. And nothing ever just sells itself.

I couldn’t start the day without...

Having some sort of plan for what I want to achieve. I think of each business day as an opportunity to take some small step towards longer term goals, and hopefully to enjoy the journey along the way.

SME WATCH

Word perfect

Amanda Ferguson talks to Texthelp Ltd chief executive Mark McCusker about how its software for struggling readers is changing lives across the globe

F

ROM a Falklands war veteran to schoolchildren in Kentucky, a software company in Antrim has been helping a range of people to overcome their literacy problems.

Award-winning firm Texthelp, which also has offices in Woburn, Massachusetts, uses software to support people with dyslexia and literacy difficulties in learning to read, write, study and communicate with ease and independence.

The company was set up in the 1990s to bring its software to education, corporate and English-speaking markets. It also has a dealer channel that covers the UK, Republic of Ireland and Australia.

Chief executive Mark McCusker said: “Fundamentally

what we do is design technology for people who struggle with reading and writing.

“In the early days of the company we were very focused on the likes of the dyslexic community, whereas now as we have grown and broadened the software so it is equally useful to someone who has English as a second language or someone who is functionally illiterate — a very broad range of people.

“In terms of the evolution of the company we started off in only English-speaking markets and grew in the UK, Ireland, North America, Australia, New Zealand, South Africa.

“More recently we have started to focus on markets where English is not the first language, so we are doing work in China, India and Brazil.”

28 BUSINESS MONTH 12 May 2014

Texthelp's software enables people to develop their reading, students to achieve a degree and employees to operate effectively in the workplace.

Customers include schools, universities, private corporate concerns, local government departments and publishers such as Pearson, McGraw Hill and Discovery Education.

“We have a broad range but the common link to the technology is helping people who are struggling with reading and writing,” Mark said.

“In most cases the consumer of our technology doesn't actually pay for it. It's unusual. The ultimate user very rarely pays for our software — it is usually a third party in the supply chain that pays for the software.”

Texthelp has 121 staff, with

some 28 of them based in America.

All technical development, administration, and sales and marketing in the UK and the rest of world, excluding North America, takes place at the headquarters in Antrim.

Invest NI assisted Texthelp when it moved into the US market and continues to provide it with valuable assistance.

Hispanic children embracing the technology in Kentucky schools got the company thinking about how Texthelp could assist people who do not have English as their first language.

“Kentucky was determined it was going to be one of the top states for supporting students who were struggling readers, not just dyslexia, but any form of struggling reader.”

Then around three years ago the company began moving into non-English speaking countries.

“When you look at someone who was learning English, the typical errors they make are not actually dissimilar from someone who is dyslexic,” Mark explained.

“For example, they will tend to spell phonetically and struggle with pronunciation of words. So we started to adapt the software for that market and that has led us into the markets of China, India and a little bit of South America.”

Texthelp has ambitious plans for the future.

“When I joined in 1998 there was six of us and we are now at 121,” Mark said.

“We are pushing on forward.

Our growth plans are largely focused on the rest of the world now.”

Queen's University Belfast graduate Mark (55) has a background in engineering. Now he says running a business that helps others is very rewarding.

“We talk about the change you can bring. We have a whole series of feedback from customers we talk about.

“My favourite one is from a woman who contacted us one day to say that her husband, a Falklands war veteran, was very dyslexic and he was a little bit embarrassed.

“She bought our software, put

it on the machine and told him to try it. When she came back 15 minutes later he was crying because for the first time in his life he could actually read an email from his daughter.

“At the end of the day we are a

hard-nosed commercial organisation, but there is a very strong counterbalance in terms of the satisfaction in delivering something that does changes lives.

Our mission is that we change lives. That is what we do.”

12 May 2014 BUSINESS MONTH 29

ASK THE EXPERTS I WANT to give a young person a chance through work experience but I’m confused by the range of schemes there are — what do you advise?

IT’S great that you are keen to give a young person work experience. At Business in the Community, we are aiming to get business to pledge their support in helping 3,000 young people into jobs over the next three years.

Every organisation willing to offer employment support for young people will help us achieve this ambitious goal.

You’re right though, there are lots of different work experience and employability schemes available and it can get confusing as to which one is best for your organisation.

Some schemes last for a matter of weeks, while others last for up to a year. Some target young people that are at risk of becoming long-term unemployed, whereas others engage with graduates seeking to acquire experience to help them get a job. Some of the schemes have financial incentives attached, and others don’t.

A good starting point is to map out what kind of opportunity you want to offer. Ideally, how long would it last for? What skills does the young person need in order to be successful? You’ll also need to think about who will mentor the young person and if you can offer them a wage.

Once you’ve thought through a bit more of the detail, contact the employability team at Business in the Community and we’ll help you find the right solution to both fit your business and provide the best work experience opportunity. Give us a call on (028) 9046 0606.

SW

Jim Andrew Accountant TaxAssist Accountants

Ciara Lagan Lawyer Law firm Tughans

Sheila Whelan-Duffy Head of Employability Business in the Community NI

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

AS the owner of a small business, I’m worried that I'm not up to date with finances. Have there been any changes I should be aware of?

SMALL businesses should ensure they make the most of the new benefits and don’t get caught out by the changes. The cost of employing people came out as the top issue facing small businesses in a recent survey we conducted.

While the latest Budget didn’t provide a silver bullet for this issue, there are new tax breaks and changes from last month which small business owners need to be aware of and in some cases could help them to make those vital recruitment decisions.

Key changes from April include: ■ Employment allowance — from April 2014 most businesses and charities will be entitled to a £2,000 employment allowance per year towards their employer National Insurance contributions (NIC) bill; ■ Employees’ and employers’ NIC — the point at which employees and employers start paying NIC will be aligned from 2014/15 at £153 per week; ■ Statutory sick pay (SSP) recovery — from April 6 2014 the recovery of SSP will be abolished; ■ Personal allowance and tax code 2014/15 — the personal allowance for 2014/15 rises to

I OWN and run a successful medium-sized business but am looking to retire in the next five to 10 years. How do I pass on my business to the next generation?

TO ensure the smooth exit of an owner on retirement, it is vital to address succession planning early. There are ongoing management and ownership issues that need to be considered.

The business will need a suitably qualified and skilled management team to continue its success. If the next generation do not have such skills, consideration should be given to getting the right team in from outside the board as soon as possible. Outside management can be incentivised without the next generation relinquishing majority control of the business.

If there is more than one successor to the business, formal structure should be introduced, such as a family constitution to set out decision-making processes and reward entitlement.

This avoids uncertainty and minimises risk of conflict.

Is the next generation interested in the business? If they do not want to be involved in the business there are other options such as a trade sale or management buy-out.

Tax advice should be sought early to ensure tax efficiency of any business transfer.

CL £10,000 from £9,440 in 2013/14; ■ Workplace pensions — from April 2014, it will be the turn of employers with between 50 and 250 employees to comply with the new rules. From April 2015, the new rules will also apply to employers with less than 50 employees; ■ RTI reporting concession for small employers — the concession for small businesses

with between 10 and 50 employees comes to an end on April 5 2014 when they will need to start reporting PAYE information in real time. Employers with nine or fewer employees can continue to report PAYE information on or before the last payday in the month until April 2016.

JA

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

30 BUSINESS MONTH 12 May 2014

INSIDE REPORT

THE CLOUD’S SILVER LINING Coleraine is to have the province's first enterprise zone. Paul Gosling examines why the move is so significant to the province’s digital ambitions

T

HERE was little on offer in the Chancellor's Budget of March 19 that was specifically targeted at Northern Ireland. But Coleraine benefited from one announcement that is expected to lead to new jobs and substantial investment. The north coast town is to become Northern Ireland’s data centre capital.

A small enterprise zone is to be created on the edge of the town, forming the basis for a high-technology business park within the University of Ulster’s campus. Coleraine’s will be the first of the new generation of enterprise zones in Northern Ireland, offering substantial financial support for capital intensive investments.

However, the inducements available for enterprise zones here are different from those in England. For businesses locating in English enterprise zones, discounts can be provided on their business rates, improved access to higher quality telecommunications infrastructure and fast planning decisions. In some instances, enhanced capital allowances are available, though European Union state aid rules prevent these being available alongside business rate discounts.

Of these incentives, three are irrelevant to Northern Ireland.

We already have a telecommunications infrastructure that is better than most of England’s and business rate setting policy is devolved to the Assembly. A fast-track planning decision

was achieved for the Coleraine development, without needing enterprise zone status to achieve it. The decision was made in just nine weeks, but before enterprise zone status was granted.

It is the enhanced capital allowances that were the vital ingredient for Coleraine, attracting a £20m investment from specialist investor 5NINES into a new data centre.

This has provided a more effective substitute for the jobbased grant assistance that in other circumstances would have been provided by Invest NI, but was not attractive in this instance because only 15 jobs are expected to be created in the near term.

A data centre is an essential part of the modern digital infrastructure, particularly as the use of cloud computing accelerates. Cloud technology enables businesses and individuals to store data remotely, rather than overloading their own systems and devices.

Demand for cloud storage is escalating with the massive increase in use of and storage of data. Data centres are heavy users of energy, so access to reliable electricity sources is necessary, as well as very highquality telecoms connectivity.

Finance Minister Simon Hamilton explained the importance of the capital allowances in attracting 5NINES. “Designating this enterprise zone in Northern Ireland is another tool to lever economic growth,” he said. “It will enable

32 BUSINESS MONTH 12 May 2014

the 5NINES project to benefit from the additional incentive of enhanced capital allowances, which allows them to claim 100% first-year allowances for qualifying plant and machinery expenditure. This is particularly attractive to capital intensive investments such as this data centre.”

Officials say the approval of the Coleraine enterprise zone was not connected to the near simultaneous announcement of around 300 job losses at the Driver and Vehicle Agency operation in the town. Negotiations with the Treasury have taken place over an extended period and the planning approval for the data centre was agreed in October, several months before the decision was taken regarding the DVA redundancies.

The University of Ulster failed to respond to a request to discuss the development on its land, or its involvement in the project. But minutes from a meeting of the university’s governing council shed some light.

The minutes record: “The vicechancellor confirmed that there would be no cost to the university under the terms of the proposed contract with 5NINES. The agreement with 5NINES would hopefully act as a catalyst for further businesses to locate in the business park.”

There are two key advantages for 5NINES in locating at Coleraine. One is the enhanced capital allowances agreed with the Treasury, the second is its close location to the landing

point for the Project Kelvin high-speed broadband cabling with North America.

According to one senior person familiar with the deal, the recently deceased Eddie Haughey, Lord Ballyedmond, was actively involved in bringing the scheme to fruition.

Lord Ballyedmond, the chairman of Norbrook Veterinary

Pharmaceuticals, was a generous benefactor to the University of Ulster.

Sinclair Stockman is also rumoured to have been a central figure: he is a visiting professor at the university’s computing faculty and chairman of data centre development company, Data City Exchange. Both Stockman and

Data City Exchange failed to respond to requests for comment, as did 5NINES. However, Justin Gilbert, a partner in 5NINES — which is developing data centres globally — has previously spoken to the Belfast Telegraph. He said: “Local people have been very, very supportive of what we are doing, particularly Coleraine

Borough Council. We travelled all over Northern Ireland to find the right spot and clearly because of the landing station, Coleraine has a big benefit.”

He explained that data centres are not only central to the infrastructure for high-technology sector expansion in Northern Ireland, but can also indirectly generate substantial numbers

of jobs. “We need data centres if we're going to make a new digital industry in Northern Ireland,” he said. “We could generate over 16,000 jobs, but in order for that to happen, someone has to build data centres, which are the foundation of any digital economy.”

>> Turn to page 34

12 May 2014 BUSINESS MONTH 33

INSIDE REPORT >> From page 33 The company is expected to follow up the Coleraine data centre with similar projects elsewhere in Northern Ireland, including in Belfast. 5NINES is a substantial business, holding contracts with many heavy users of cloud storage systems and other data centre services, including the UK Government and leading outsource service provider Capita.

Enterprise Minister Arlene Foster stresses that the creation of the data centre at Coleraine is extremely important in terms of building a high-technology infrastructure in Northern Ireland and in attracting related inward investment. She said: “Over many years the Executive has shown the priority that we attach to having a world-class telecommunications infrastructure. This opportunity allows us to further exploit the extensive superfast fibre-optic broadband network available across Northern Ireland and the direct international connectivity that Project Kelvin provides to North America and continental Europe.

“Data centres are a strategically important piece of the telecommunications infrastruc-

34 BUSINESS MONTH 12 May 2014

ture and the Executive was keen to demonstrate its support for the proposal in an innovative way. Such investments can be crucial in the development of the ICT sector as a whole and will, without doubt, enhance the proposition NI can offer to inward investors who are increasingly globally connected.”

In a written reply in the Assembly, the minister added: “Subject to timescales for establishing the zone, we will liaise with the University of Ulster and Coleraine Borough Council as appropriate to agree how the site will be marketed... Invest NI will promote the new data centre to relevant companies in international markets. This, along with the excellent telecoms and IT research base at UU Coleraine and the engineering talent available in the north-west region, should help attract more FDI [foreign direct investment] and local companies to explore the location as a suitable place to establish and grow their operations from.”

If building telecommunications infrastructure is like a digital jigsaw, another piece is now being fitted into place. The whole of NI should benefit, though Coleraine most of all.

TICKERS

The month’s local indicators at a glance Ulster Bank economist Richard Ramsey gives a rundown on the latest key pointers STERLING’S effective exchange rate, which is a weighted average of the pound’s individual exchange rates against a basket of currencies, plummeted by 30% following the credit crunch in the summer of 2007.

This has been a mixed blessing. On the one hand, sterling’s weakness boosted export price competitiveness. On the other hand, its depreciation exacerbated food and energy price inflation and squeezed household incomes in the process.

However, as the economic has seen a recovery, so to has the value of sterling. This has been particularly evident since last summer with the currency’s effective exchange rate appreciating by over 9% since the end of July 2013. As a result, sterling’s effective exchange rate is now at its highest level since the end of October 2008.

Sterling’s appreciation has been linked to the UK’s improving economy and expectations that the Bank of England will begin raising interest rates ahead of its counterparts in the European Central Bank (ECB)

and the Federal Reserve. Of the three, the eurozone’s ECB will potentially provide additional monetary policy stimulus; options could include a further cut in its benchmark interest rate and an asset purchase programme. Financial markets’

expectations surrounding the ECB’s likely policy action have weighed on euro sentiment, particularly against sterling.

The euro/sterling exchange rate has fallen from 87.4p (£ = 1.143) at the end of July 2013 to around 82p (£ = 1.217) at the end of

April 2014. Meanwhile sterling has hit a five-year high ($1.69) against the dollar. Sterling’s strength is good news for UK holidaymakers heading abroad.

However, UK exporters will experience an erosion in price competitiveness.

ACCORDING to the Northern Ireland Composite Economic Index, the economy grew by 0.6% q/q in Q4 2013 with private sector output also increasing by 0.6% q/q. Putting the recovery into perspective, however, NI’s private sector has clawed back less than 20% of the output lost during the

recession with output in Q4 2013 still 14.4% below the Q2 2007 peak. Private sector services output remains 12.6% below the Q3 2006 peak. Construction sector output remains 48.4% below its Q2 2007 peak. To date, NI manufacturing has recouped 44% of the output lost during the recession.

ULSTER BANK’S PMI, shows Northern Ireland’s private sector recovery still firing on all cylinders at the end of Q1 2014. Local firms have now posted three successive quarters of strong growth. The pace of business expansion eased in March but the corresponding acceleration in new orders growth suggests

strong rates in this area should continue for some time yet.

Northern Ireland’s private sector firms have now reported growth in new orders for 10 consecutive months. This sustained growth is feeding job creation. In March, firms saw staffing levels increase at the fastest rate since the PMI survey began in August 2002.

36 BUSINESS MONTH 12 May 2014

ANALYSIS

Seasons aren’t in fashion

A designer is shaking up the fashion business with a trans-seasonal collection more in keeping with the poor weather,writes Maureen Coleman Photography by Neil Kerr, www.neilkerr.com'

A

LEADING Ulster designer has launched her first ever trans-seasonal collection, claiming Ireland's harsh climate has helped change fashion.

According to Una Rodden, a lack of sunshine in recent years means the traditional spring/ summer collections are no longer relevant to her clients.

The Belfast-based designer said the women buying her clothes wanted pieces they could wear all year round and that summer clothes were no longer value for money, as continued poor weather prevented them from having much wear.

And in another new move, the award-winning designer has swapped the traditional catwalks for fashion film instead, teaming up with Belfast visual artist and photographer, Neil Kerr, to reveal her first transseasonal collection, Usine.

Una unveiled her new collection with a fashion film screening and live model presentation in Belfast nightspot Aether & Echo. The film and photo-shoot

were shot by Neil in a vast, empty warehouse Donegal.

She said: “We work with clients every day . . . what they are looking for are pieces that will last them longer than just one season. The customer is dictating what they require and we are fulfilling that brief.

“What we're seeing is that the weather here is a huge factor in what we wear and how we wear it. The seasons are so messed up. We don't really have a spring/summer anymore and if it does happen, it doesn't last long. The rest of the year is more like spring or autumn.

“So I didn't want to give the collection a label of a particular season, as a lot of our clothes can be worn all year round.

With our weather, we need something more weighty in summer, or lighter in autumn or layered up for winter, hence the trans-seasonal collection.

“The recession has also had a knock-on effect. People just don't have the disposable income to buy so many different wardrobes. They want pieces that will work for three

or four occasions, not just one.”

Una pointed out that highstreet store Zara steered away from seasonal collections as well, instead introducing new pieces ever six to eight weeks.

And designer Christopher Kane was so disheartened by the weather last year, he arranged a preview of his autumn/winter collection before the summer was out, to help generate sales.

Una had been considering new ways of unveiling her collections, when 34-year-old Neil walked into her shop one day and asked if he could photograph her work.

After showing Una a Polaroid image, they immediately clicked.

“I was looking for someone to photograph my clothes in a non-realistic, quirky way and Neil’s photography is very cool and artistic,” she said.

Una told him she had been toying with the idea of a live model presentation and Neil agreed it would complement a fashion film. The pair teamed up for the first time last year, presenting Una’s collection at the Meter House in the Gasworks in Belfast.

Una said: “It was like an art gallery experience. The models were placed in the centre of the room and everyone there was unsure if they were real or mannequins. Then they started to move. “The great thing is that people got to see every angle of every dress and garment.”

The Usine collection was revealed with a display of Neil’s Polaroid pictures, live models and a fashion film.

Una said: “When I started out in fashion I worked for Michelle O’Doherty and there was no-one else doing what she was doing back then.

“When she moved to Amsterdam, we opened up here, but we were very much on our own.

Now there are so many younger designers coming through.

“But we have to stay ahead in this industry and that’s the main reason we’re moving away from catwalks and using fashion film instead. There are new faces coming through and we have to be more gutsy, take greater risks.

“If we keep doing the same as everybody else, we will get lost.”

12 May 2014 BUSINESS MONTH 37

FOCUS ON: RECRUITMENT

PERFECT FIT

Choosing the right staff is vital to success in business. Clare Weir speaks to recruiters

M

AJOR global recruitment firm Hays has 50 recruiters in Northern Ireland and regional director John Moore says that the firm, which deals with 70% of Northern Ireland’s top-100 companies, has seen a 100% rise in the number of permanent appointments in the past year alone — a real sign of a boost in business confidence.

“Looking at recent trends, I think it is well documented that within IT, the demand for staff is unparallelled. There was no let-up throughout the downturn,” he said.

“The demand has accelerated much faster than the universities can cope with and we are seeing a real war for talent in the sector.

“In construction, estimators, planners, buyers and quantity surveyors are in demand but because a lot of the output from the main contractors is in Great Britain or further afield, anyone who wants to develop their career needs to be flexible on location. Within the public sector we are starting to see the impact of the ongoing cost controls, and that salaries are not as competitive as they used to be.

“If we want to boost the jobs market I think it is very important that Northern Ireland is seen as a great place to live and work.”

Firstsource, which provides customer management and business services to organisations in the financial services, telecommunication and healthcare sectors, has developed an innovative strategy of recruitment among long-term unemployed people and has a number of flexible working programmes for students, parents and carers in a bid to attract and retain staff.

Headquartered in India, the company set up in Northern Ireland in 2006 and has over 2,000 employees across its four sites

38 BUSINESS MONTH 12 May 2014

in Belfast and Derry.

Laura Hourican, head of HR for UK and Ireland for Firstsource, said that developing the firm’s people has helped the company achieve huge growth.

“We’ve given people options, to move location, to move into a different part of the business, to work around term time, to work around their families or dependents. We allow parents to apply for additional leave over the holiday period — we go beyond our legal requirements and that helps us retain and develop our best people,” she said.

“We’re a 365 day, 24/7 operation. Evenings and weekends can be busiest for some clients, so we have the the ability to offer a lot of flexibility.

“We have positions in HR, IT, management, payroll, accounts — every contact centre has massive support functions and there are always new opportunities.

“You can start in Firstsource by answering a phone and end up managing a team of 100 people.

>> Turn to page 40

PANEL: John Moore, Northern Ireland director, Hays: “I would also say that hiring managers need to look beyond the 25-40 bracket if they want to grow their business. If everyone is looking in the same place, companies are going to be understaffed. Hire for potential, on one hand and hire those who still have lots to give, on the other.”

Laura Hourican, head of human resources,

UK and Ireland, Firstsource “The candidate has to have a positive experience. Every candidate is an ambassador for your company and giving and receiving feedback is very important.”

Ciaran McCallion, senior HR manager, Allen & Overy “We think it is important to provide young people with a range of skills that they can take anywhere in the world.”

FOR THE JOB

and HR experts to find out how companies can attract and retain the best candidates

12 May 2014 BUSINESS MONTH 39

FOCUS ON: RECRUITMENT >> From page 39 “I think when choosing staff, you have to be very clear on what you are looking for in terms of the brief and the skills, right from the start. If you don’t, it’s harder to find the right people.

“We also run assessments as well as having face-to-face interviews — we look at skills, qualifications, we sometimes ask for a presentation or undertake a psychometric profile. We don’t think you should underestimate what is available, or overlook the other assessment tools you can use as well as interviews.”

There’s an old saying that you should “start ’em young” and global legal firm Allen & Overy, based at the Obel building in Belfast, have taken that message to heart, creating a documents skills course at the South Eastern Regional College (SERC) and delivering outreach project with Ashfield Girls’ School and Mercy Primary School in Belfast.

The firm also has a number of IT apprentices in place and in addition has established partnerships with the local universities in the areas of law and librarianship.

Ciaran McCallion, senior human resources manager at A&O, said that in the past two years, seven people out of the 25 people who have completed the SERC course have gone on to work with the company.

“We’re playing a long game. We’re building an alumni of people who, if they do not come

40 BUSINESS MONTH 12 May 2014

in to work with us immediately, will go on to use those skills with other employers and in future years they may come back to us.

“It’s a really good way to build the future workforce from the ground up and we think it is important to provide young people with a range of skills that they can

take anywhere in the world. In the past two-and-a-half years, we’ve hired over 370 people and we’ve had over 9,000 applications through the door.

“We have great, talented people in Belfast and the office is recognised throughout the company’s global network.”

FOCUS ON CYBER SECURITY

HELPING TO NET CROOKS

With the demand for cybersecurity growing at a rapid pace, Clare Weir discovers why Northern Ireland is so well placed to play a role in tackling hacking and the like

T

HESE days, everyone with a smartphone in their pocket is a one-person software company.

And with more and more everyday transactions taking place through mobile devices such as phones and tablets, the opportunity for cybercriminals to access our financial details and personal information is on the rise.

Bigger companies too are suffering, with hacking, phishing and disruption of service attacks — as well as intellectual property theft — causing increasing financial and reputational damage.

With the demand for cybersecurity experts growing at 12 times the rate of the overall job market, Business Month took a look at what steps can be taken to safeguard our online presence, both personal and in a business capacity, and which companies are capitalising on the need for tougher security.

Andy O'Donoghue (pictured) from BeaumeX, Ireland's leading Apple and entertainment distributor, is a broadcaster and cybersecurity commentator. He says that the biggest threat to businesses is a lack of awareness.

“SMEs (small and medium-sized en-

terprises), in particular, have no idea of the cost of a security breach . . . it's not just financial, it's not just the theft of money or of credit card details, but the theft of information and the damage to reputation,” he said.

“If you have five or 10 people in a company, if most of the

The cost of one hacking attack would put most small firms out of business

42 BUSINESS MONTH 12 May 2014

sales come from online — if a website goes down for two or three days, lost sales and damage to reputation can be hugely expensive.

“The cost of one hacking attack would be enough to put many small firms out of business. It's been estimated that just three to five days of a website being down could cost between £30,000 and £50,000.

“Initiatives like the Innovation Voucher and the 10 Steps to Cyber Securi-

ty plan are a step in the right direction but there needs to be more awareness. Hackers are gaining access to customer lists and credit card information. In lots of cases companies are hacked and they don't know it. A customer's credit card details will be used and tested in small transactions and eventually the rate and size of the transaction may increase.

“I think with the the surge in online and mobile payments, which is set to really increase over the next two years, and with the increase of things like online and mobile checkins at airports, more avenues for cybercrime will be opening up and this raises a lot of questions.

“Will identity have to become further embedded in phones, will physical attributes become part of security? Clever electronics companies like Apple and Samsung are already looking at fingerprint and retinal ID technology.”

Northern Ireland is already home to some major companies which specialise in security and biometrics.

One such firm is Core Systems, which makes software which drives security systems in a growing number of jails in the UK, the US, and other parts of the world. From its Crumlin

Road base, it develops security and biometric software which can identify people from their personal characteristics, such as fingerprints or eyes.

That lends itself to the the custody sector, including prisons, police stations and immigration centres, and it has found an eager market for its high-tech products.

Core Systems is investing £700,000 in an expansion and research and development project to secure new opportunities in the US market.

The firm frequently appears in the Deloitte Technology Fast 50 Awards, a list of the top 50 fastest-growing technology companies in Ireland and recently won an award at the Invest NI/British Airways Export Challenge Competition.

A far younger company, which has spun out of the Centre for Secure Information Technologies (CSIT) at Queen's University Belfast, is Liopa, the world's first lip authentication processor for mobile devices, which could eventually replace the traditional security password.

Initial product development has been funded through the Technology Strategy Board and the company is now working with a local point-of-sales firm

>> Turn to page 44

Countering the attack

Smartphone technology is increasing the risk of cybercrime

É In March, The Economist Intelligence Unit launched CyberTab, a free and anonymous calculator that helps companies tally the cost of specific cyber attacks. É CyberTab users can input a range of expenses and estimated costs for either a specific attack scenario or actual breach. The tool will then generate a report details the cost and enables a cost-benefit analysis of security strategies. É The Cyber Security UK Challenge is bringing together experts to design and develop a series of challenges and competitions that will test the nation’s cybersecurity skills. This group is led by a management team consisting of professional bodies, government departments, private industry, and public sector organisations. É The Technology Strategy Board in the UK has launched Innovation Vouchers for SMEs, entrepreneurs and early-stage start-ups who see value in protecting and growing their online business by having effective cyber security. The TSB makes £5,000 available to each successful applicant to fund initiatives such as a 'cyber audit' for existing processes and for start-up companies needing to build cyber security into the business. É The Cyber Security Guidance for Business, produced by CESG (the information security arm of GCHQ), the Department for Business Innovation and Skills and the Centre for the Protection of National Infrastructure, aims to help the private sector minimise the risks to company assets.

The guidance includes a 'Ten Steps to Cyber Security' programme for companies.

12 May 2014 BUSINESS MONTH 43

FOCUS ON CYBER SECURITY >> From page 43 to trial the software with a view to including it in their verification process.

David Crozier, from the firm, was involved in organising the fourth annual cyber security conference hosted by the CSIT, at Queen's University recently.

Speakers from 12 different countries on four continents — representing Facebook, Intel, IBM, GCHQ, the Korea Information and Security Agency, Estonian Information System's Authority and McAfee — all addressed the event.

The conference heard that Queen's University is to offer a new masters degree in cyber security, which will be launched this September.

“Having our first reference company for Liopa is a big step and we are looking to build the company out, seek investment and ramp up recruitment and sales from an initial team of four,” said Mr Crozier.

“The selling point for lip biometrics is that companies don't need to invest in biometric hardware like fingerprint

44 BUSINESS MONTH 12 May 2014

Cybersecurity is a major issue for firms scanners or sensing equipment — we are taking advantage of sensors and cameras already

installed on phones, there is very little additional hardware needed,” he explained

He added that Northern Ireland is well placed to fill the global cybersecurity gap.

He said: “If you look at the Belfast market in terms of skills, the raw material is . . . really well placed, in . . . our computer science and electronic engineering graduates, and the roll out of the MSc will just enhance that.

“We try not to play up concerns but we are seeing more industrial espionage — attacks on intellectual property and trade secrets and the details of major infrastructure projects or sensitive security matters.

“Small companies making tiny parts, which are part of a bigger international supply chain, need to look very carefully at their security as they could be seen as a weak link where criminals can gain an access point.

“Network intrusion to seek customer databases and records, can sometimes not only be used to cause financial damage but to set up mirror companies and websites which can then be used for more advanced organised crime.”

OFFLINE SECTION

MOTORING

DAY IN THE LIFE

MAN ABOUT TOWN

Renault Captur is a beast of a car

Owner of James McGarvey Cycles

Inside track on Northern Ireland business

QUITE A CATCH

JAMES GARVEY

THE CHAIRMAN

SKY’S THE LIMIT

DUBAI HAS GOT ALL YOU COULD EVER WANT

12 May 2014 BUSINESS MONTH 45

offline

OUT TO LUNCH

Graduate has all the right ingredients Food is our success story of the 21st century, Dr Una McMahon Beattie of the Ulster Business School tells Joris Minne, at Holohan’s Restaurant on the Barge, Belfast

S

OME people give their profession a bad name. Dr Harold Shipman, the mass-murdering GP, did it for doctors and David Van Day of Dollar did it for pop musicians.

But others like Una McMahon Beattie have managed the opposite and actually ratchet up the reputations of their profession — in this case, academics.

Dr McMahon Beattie is head of department for hospitality and tourism at the Ulster Business School. She has two bases: Belfast where hospitality and the culinary arts are taught, and Coleraine which is home to the disciplines including travel, tourism, leisure, events and food production and development.

Today we are inspecting the work of a graduate. We are in Holohan’s, the restaurant housed on the deck of the aging Confiance barge moored on the Lagan close to the Waterfront Hall. The restaurateur is Calvin Houlihan Doyle who is a former UBS pupil and whose finals included a business plan submission for a restaurant. And here it is.

The business plan has been put into practice, the lights turned on, the gas turned up and furniture placed.

Dr Una is delighted to see the place busy (as is Calvin). There is boxty on the menu and a salad of black pudding, Irish bacon, hen’s egg, soda bread and a stout vinaigrette. So does education cut the difference between a

46 BUSINESS MONTH 12 May 2014

successful culinary business and a failure?

“There will always be success and failure and preparing for success definitely raises the chances of survival,” she says.

“If you study the subject, learn the disciplines of management, accountancy, marketing, customer relations and the other essential features of the restaurant and hotel sector you will be in a far better position to deal with challenges which might otherwise knock a less able and less well prepared business leader,” she says.

It makes sense, and while the restaurant market is volatile it has proven strong and reliable for those who are experts and know their subject.

The UBS trains its students the hard way: placements for up to 150 students each year could involve working in the kitchens, front of house, in airlines, hotel receptions and every conceivable tourism activity.

McMahon Beattie is a firm believer in what the French call formation.

“Work experience, education and training will make a better professional, help see problems arise, guide the person towards the most efficient way of doing things and engender a sense of leadership,” she says.

Apart from being devoted to the training of young people — this school is among the oldest in the UK having started up in the 1970s — she is deputy editor of the influential Journal of Revenue and Pricing Management.

Having grown up in a publican family she knows all about the importance of analysis and she is soon on to the subject of gastrosexuals. I swallow hard and wait for an explanation.

“These are 24-44 year old males influenced by celebrity chefs, kitchen designs and equipment and they are partly the cause of the rock and roll status which chefs now enjoy,” she says.

She is a true boffin and talk soon turns back to the food product development suites in Coleraine where mysterious work in collaboration with producers is conducted and where the analytics of the sector become as complex as any science.

“Food is the Northern Ireland success story of the 21st century,” she declares, “and Ulster Business School is more committed than ever to industry development and the formation of the next generations of experts.”

Holohan’s restaurant Boxty with ham hock Salmon and shrimp cake Salad Colcannon Carrageen moss Chocolate & hazelnut torte

£7.50 £7.50 £6.00 £3.50 £4.00 £4.00

Total

£32.50

offline

Streetview No.34: City Reptiles Ron McBride

I

n the heart of Belfast a small business selling exotic species manages to survive in the urban jungle. A short distance from the Europa Hotel it is possible to investigate snakes, lizards, frogs, tortoises, spiders and insects from exotic climes.

Wayne Hull’s City Reptiles opened almost 30 years ago.

The shop has a modern frontage with the foliage in the window display hinting at what lies inside. Staff numbers have fallen but both he and Scott have years of experience. Today they are assisted by volunteers gaining work experience in the field.

The interior of the shop is dominated by vivariums neatly laid out. On entry an attractive boa constrictor lies at ease.

Walking around, the variety of stock becomes apparent if time is taken to observe closely. As might be expected, each vivarium has its peculiar environment.

City Reptiles supplies various

sizes and accessories. In the shop it is apparent that these creatures are sentient and need considerable attention as the staff spray to adjust humidity, feed crickets and check the UV lighting, temperature, water and substrate.

Some of the snakes and frogs are indeed very attractive in their setting. It is fascinating to read about the Green Tree Python which grows to about six feet. They are docile, unless provoked, and content to coil

around a branch for long periods. They need 10 hours of UV lighting per day and spray-misting twice daily. Artificial branches which can be removed, snake and all, are used for easy cleaning of the cage.

They should be fed every 10 days or so.

The trade has been criticised in the past in terms of bad practice but City Reptiles operates on an ethical basis, educating beginners as to their duty of care. It is not possible to walk

SHOP FRONT

in and buy a Western Hognose or Reticulated Python without satisfying the staff that the relevant conditions are in place.

Their website is informative, providing interesting care sheets. Some creatures such as tortoises must have CITES certification. Most of the stock comes from wholesalers in Hertfordshire but local breeders, some of whom started off as hobbyists years ago, supply the shop.

Prospective buyers need to be aware that long-term care is needed, that cages of a suitable size are vital and that they must be prepared to feed snakes, lizards or whatever properly.

The question of feeding is worthy of consideration as beginners may feel uneasy.

City Reptiles has links with the biology departments in local schools and with QUB. Should anyone be interested in a new, responsible hobby, a visit to the shop would at least be interesting.

Should you already have a reptile — why not board it with them on holiday?

12 May 2014 BUSINESS MONTH 47

offline

DAY IN THE LIFE

Meet the man keeping the city’s cyclists on the road James McGarvey Owner manager, James McGarvey Cycles 8am

Before I leave the house I check emails and update our new website, mcgarveycycles.com.

We’re also new to the worlds of Twitter and Facebook and I spend some time catching up with our followers.

9.30am

I open the shop and as usual I’m greeted by cyclist commuters with bike emergencies. Many customers need their bicycles to get to work or college. We can do repairs within the hour depending on how busy we are, which allows customers to get back on the road quickly.

We are lucky to have regular customers who have been with us for years. We have seen more tourists coming into the shop of late, which could be due to the Giro d'Italia 2014 hype building. I enjoy giving them a traditional bicycle shop service, which you don’t usually get from a big chain retailer.

10.30am

I work on deliveries, assemble bikes and get them ready for

display. When I started my career I was seeing iconic bikes such as the Raleigh Chopper or the Royal Enfield Tourist.

Nowadays I’m repairing the latest downhill mountain bikes with hydraulic brake systems or top-class carbon fibre racing bikes with electric assisted transmissions.

Although this shows improvements in bike technology, we still receive the old broken and worn bicycle that’s in need of a new lease of life.

11.30am

Two special cyclists come into the shop with a Trek Tandem bike in need of a full service. This type of of twowheeled bike is not uncommon. The customers in this instance are planning to use it in an upcoming event in Cork.

12.15pm

I start getting ready for the lunchtime rush. Workers from across the city pop in for repairs or accessories and parts for DIY home bike repairs.

48 BUSINESS MONTH 12 May 2014

1pm

The cycling community in Belfast is very close knit and our shop is seen by many as a hub to meet and enjoy some banter.

People of all ages call in to the shop during their lunch hour — in fact, at this time of the day we are like a small pub or restaurant without the food or drink.

We chat about bikes or life and share a few jokes. The Giro d'Italia 2014 is a big talking point — some of my customers have volunteered to act as marshals during the event and have promised to share photos with me.

2pm I tidy up showroom and have a bite to eat. I then phone or text customers with estimates or let them know that their bikes are ready. This is followed by a few more repairs. I finish work on a BMX bike. The young owner was insistent that it must be ready when he finished school, so this job had to be a priority or I would have been in trouble!

3.00pm

I usually start wheel repairs when it is a bit quieter. I prepare and build a few wheels and today I am repairing a wheelchair wheel. Building bicycle wheels is my passion, as I’m able to use my tools which have been passed down to me — my stand was made in the 1930s and was used by my father and grandfather when they had a bike shop in Smithfield Market.

4.30pm

I deal with some paperwork.

5pm

A customer comes in with an emergency puncture and he waits in the shop while I fix it.

5.30pm

I close the shop.

7.30/8pm

I head out for a gentle spin on my bike to take time out and get ready for the challenges of another unpredictable day in the shop.

offline

Depreciation more costly than fuel MILLIONS of pounds are wasted every day by drivers who focused on fuel economy when they chose their car, instead of the real cash-killer — depreciation.

That’s the warning from the independent experts on motoring costs, CAP Automotive.

According to its car ownership cost figures, the average cash value lost by the typical medium family car bought three years ago is £12,559. But the same cars, driven 12,000 miles a year, have only burned an average £4,000 of fuel. Depreciation has therefore cost the typical motorist three times as much as they have spent at the pumps.

VW ‘very satisfied’ with delivery rates THE Volkswagen Group delivered 2.40 million vehicles from January to March this year.

Deliveries in the month of March ran at 929,500 up 7.6% from the same month last year.

“All in all, we are very satisfied with the way deliveries developed in the first three months,” group board member for sales

Christian Klingler said. “The positive momentum in the AsiaPacific region continued, with China remaining the group’s largest single market. Furthermore, there are signs of a return to modest growth on the markets in Western Europe.”

All motorists in France require a breathalyser THE IAM (Institute of Advanced Motorists) and AlcoSense Breathalysers are reminding motorists travelling to France that it is now a legal requirement to carry an NF approved breathalyser in all vehicles.

The easiest way to tell if the breathalyser complies with the French legislation is to make sure it has the blue circular NF logo. The legal limit in France is 50mg per 100ml of blood, lower than in the UK where the UK limit is 80mg.

group’s operations director, Colin McNab, scooped the Lifetime Achievement Award at the recent ‘Business Eye Fleet Awards for Northern Ireland’.

Mr McNab said: “I love my job and relish the challenges it brings. So to get an accolade for something that means so much to me already, it is a real honour.”

MOTORING NEWS

amassed 40.72 million cumulative sales by the end of February this year.

Even though Corolla has not been part of Toyota’s UK line-up since 2007, more than half a million were sold here from the mid-1960s and almost 200,000 are still on the road today

Volvo celebrates 50 years of child safety

LEAF drives 30% rise in Nissan fleet sales NISSAN fleet sales leapt 30% in the last financial year as demand for the all-electric Nissan LEAF surged to new heights.

LEAF sales were up 132% in the 2013 financial year and contributed to a total of 27,912 core fleet and leasing sales for the manufacturer. Sales of Qashqai increased by 15% while those of the Juke crossover were up by 36%.

McNab wins Lifetime Achievement Award

Toyota Corolla claims world bestseller status

ONE of Northern Ireland’s most experienced motor industry insiders has been honoured at Northern Ireland’s first Fleet Industry Awards. Charles Hurst

THE Toyota Corolla claimed the world’s bestseller status in 2013, with internal data confirming 1.22 million sales. Launched in 1966, the popular nameplate had

VOLVO Car Group’s dedication to protecting the smallest and most vulnerable car occupants celebrates its 50-year anniversary in 2014.

The groundbreaking work started with the world’s first rear-facing child seat prototype in a PV544 back in 1964 — and the latest innovation is an inflatable child seat concept that is easily tucked away in a small bag when not in use.

The differences in anatomy between children and adults form the foundation for Volvo Cars’ child-safety developments both in terms of car integrated features and accessories. Children are not small versions of adults, which is why children need special restraints when travelling in cars, said Volvo.

12 May 2014 BUSINESS MONTH 49

offline

MOTORING

QUITE A CATCH A compact crossover which combines the best of three worlds, says Jim McCauley

R

ENAULT'S Captur began life as a threedoor concept model and while the production variant has been toned down for everyday practicality, it remains an exciting shape. Based on the new Clio platform, the Captur adds excitement and individuality to its excellent underpinnings

50 BUSINESS MONTH 12 May 2014

and presents itself with a definite ‘wow' factor, particularly when finished in two-tone body colours.

At 4.1m, the car falls into the supermini Crossover category, a design gathering momentum in which the vehicle takes the best features of established traits — bigger than a hatchback, smaller than an SUV and

bordering on an estate. Within this sector there is a lot of competition and in Northern Ireland significant demand, but to attract buyers the car has to have, among other attributes, personality. The Captur has this in abundance, both in its exterior design and youthful cabin, adding practicality to its aesthetic appeal.

Engine availability is a three-way choice of small capacity turbos, two petrol and one diesel, with the test choice focusing on Renault's famously frugal 1.5 litre 90 dCi diesel.

This returns a 0-62mph time of 13.1 seconds with top speed crossing comfortably into three figures, but overall performance is about more than

RENAULT CAPTUR 1.5 dCi Engine: 1.5 litre, fourcylinder turbo-diesel; 90bhp @ 4,000rpm; 220Nm torque @ 1,750rpm Drive: Five-speed manual gearbox to front wheels Performance: 0-62mph (100km/h) in 13.1 seconds; max, 106mph (170km/h) Fuel on combined cycle: 76.4mpg (3.7l/100km) CO2: 95gms/km; VED Band A for zero annual car tax Trim: Dynamique Energy Price: £ 16,395 Insurance: ABI (12E) group Warranty: Four years, 100,000 miles; four years’ free servicing; four years’ roadside assistance; four years’ finance package Benefit-in-Kind: 12% Euro NCAP: Five star Available extras: Metallic paint, £495; rear-parking sensors, £275; leather seats, £830

off the mark figures. As diesels go, this is an extremely refined unit and with maximum torque coming in at 1,750rpm offers smooth progression through the gears, the fivespeed manual 'box coping competently with all needs.

Brisk overtaking requires a change-down to fourth, and if the driver is seen to be lingering too long in any gear a small light bar at the base of the instrument panel changes from green to orange to advise on an up-shift. Further improvements to economy can be made by selecting the Eco button which reduces engine torque, modifies throttle response and adjusts the control

program of the air conditioning to improve efficiency. The car also features stop/start technology to further increase fuel economy.

Despite its high ground clearance of 200mm, a longer wheelbase than the Clio and wider track ensure confident, comfortable and stable handling while ride response continues to improve with a full complement of five occupants.

The cabin of the Captur majors on practicality with good storage and colour-coded metal highlights on the air vents and speaker surrounds.

Accommodation is excellent with rear-seat room providing as much as 75mm more than

in the Clio. The sliding rear seat allows the volume of the luggage area to increase from 377 to 455 litres depending on requirements. A twin-floor boot provides covered underfloor storage while with the rear seats folded, luggage capacity extends to 1,235 litres.

An innovative feature of the car are the zipped-on seat covers which can be removed for cleaning if required.

But the ultimate secret of the Captur is its running costs.

While fuel economy is officially given as 76.4mpg on the combined cycle, mixed driving on local roads recorded just short of 60mpg and that was without using the Eco setting.

With one of the lowest CO2 emissions of any engine at 95gms/km, the Captur diesel is in Band A for zero annual road tax while in the ABI's 50 category insurance ratings, it enjoys a lowly 12E rating.

For anyone looking for practicality, economy and stylish good looks, the Captur has to be high on the list, not least for its competitive pricing and above-standard warranty cover. With five-star EuroNCAP crash protection and a full complement of safety features including six airbags, electronic stability control and hill start control, the diesel range starts at £13,895.

12 May 2014 BUSINESS MONTH 51

offline

TECHNOLOGY Casio GPW-1000 smartwatch, approx £500 @ www.casioonline.co.uk Another day, another smartwatch – or so it seems.

Even celebrities are getting in on the act with Will.i.am launching one later this year.

Casio is taking a slightly different approach however, and is looking at ways it can improve its existing G-Shock range without going down the full smartwatch touchscreen route. This model is very much a watch at heart and I’d be very happy to be seen with it on my arm. It also has a useful battery life that won’t leave you scrabbling for a micro USB lead each time you head into the office or get home, which is often a problem with smartwatches.

Casio has managed to cram a Sony GNSS (global navigation satellite system) chip inside, so wherever you go, satellites inform the watch where it is.

Get Invited ticket service, pricing varies @ www.getinvited.to Get Invited is a local web service for online ticket sales and event management. It enables event organisers to sell tickets, promote events and perform post-event analysis.

With Get Invited you can send digital tickets, delivered directly to your customers’ smartphone; and manage attendees with ticket scanning and check-ins. Additionally, event organisers can view social conversations, photos and videos from their event in real time.

ToneFone iPhone case, £22.90-£25.40 @ www.desirablebody.co.uk If you’re the type of person who wants to exercise, but doesn’t have the time to get to the gym, this could be a gizmo for you. The ToneFone is the world’s healthiest iPhone case, as it turns your iPhone into a dumbbell you can carry around and use. You can take it with you anywhere and every time you pick your phone up you’ll be working out. The case is primarily constructed from steel, which is then wrapped in a protective layer of rubber. The heavier version replaces steel with lead to increase overall weight to 1.5kg.

52 BUSINESS MONTH x January 2011

HTC One (M8) smartphone, various contracts @ stockists nationwide If you feel a smartphone is often more style over substance, you’ll be impressed with the latest HTC One (M8), which has both style and substance. Its features are off the scale and it has everything you can possibly want from a phone.

What stand out are the HTC Sense™ 6 capabilities, which means the device is able to detect movement, without turning on the screen. A swipe will activate the device, auto answer allows you to answer a call by putting the phone to your ear without touching the screen.

You can double tap the dot view case, in addition to checking the time, new texts, emails and calls — without touching or revealing the screen. What also comes in handy is the extreme power saving mode that makes your battery last 40% longer.

All this, and it’s pretty as a picture.

GMcG

offline

FASHION

Summer Suits

Strellson summer suit, £299 @ Bogart

Grainne McGarvey

I

F YOU want to dress to impress you can’t go wrong with a smart suit, but it can be tricky to get something suitable for summer that is both comfortable and fashionable. The secret is to choose light grey or pastel colours, or even white teamed with monochrome, which is bang on trend this season. Lightweight fabrics such as linen or cotton will always be easy to wear throughout the day. If you don’t have the budget for a Saville Row handmade number, there are some great Capped high-street sleeveless options yellow dress, which look £130 @ good for a French fraction of Connection the price.

Yemlin checked suit, £400,@Bogart

Classic capri cotton jacket, £130 @ French Connection

Saville Rowinspired suit £299 @ Marks and Spencer

Jacket, £75, and shorts, £35, @Wallis White waffle suit, £345 @ Reiss

Hammond & Co Prince of Wales suit, £299 @ Debenhams

x January 2011 BUSINESS MONTH 53

offline

TRAVEL

YOU SAY HELLO The emirate is a fabulous one-stop shop for travel, concludes Charlotte Hawkins, who is won over by the opulent hotels, glorious sunshine, fine food and great shopping

R

IGHT up until the moment I arrived, I'd dismissed Dubai for being a big show-off; for needing to have the biggest, tallest and grandest of pretty much everything; for being an arrogant creator of new islands, golf courses and even ski slopes in one of the hottest countries in the world. Before I arrived, I was convinced all that man-made modern splendour wouldn't be for me. Not at all.

But, honestly, I couldn't help but be impressed. First off, the spotless airport gleamed its welcome; a cleaner was busy polishing a surface that I could already see my reflection in; there was copious glass, marble and gold. Then, a couple of hours later, I encountered the beach. I have never seen sand so clean. There was barely a pebble in sight and the crystal-clear warm blue water made me wonder if the emirate went so far as to sieve the sea itself.

Before you begin to wonder whether I simply have a mania for cleanliness, I was convinced of Dubai's merits because of the enticing combination of easy access from Northern Ireland and warm sunshine — a delicious respite from the uncertainties of our weather at this time of year and ideal before the searing heat of the Emirati summer.

This was to be a four-day trip, scarcely enough time even to get around all the shops in Dubai Mall (the largest, by area, in the world). It did, however, give me just enough time to get a snapshot of what one of the world's most lavish cities has to offer.

That driving urge to be the biggest and best came at a price for Dubai. When the economic crash hit in 2008, it was badly affected: the cash dried up; cranes were left hanging; building projects were shelved.

But much of that now seems a distant memory. Wherever you go, you're never far from a new development. Many of the suspended projects are back on track, and new hotels continue to spring up: a Waldorf Astoria on the Palm is the latest.

My place of rest was Al Qasr, in the Jumeirah complex, which rises like an intricate sandcastle out of the beach.

Should you wish, you have no need to

54 BUSINESS MONTH 12 May 2014

venture further afield: everything you might possibly need is here. If you get too hot while sunbathing they'll even spritz you with cold water or bring iced towels. But, after all the spritzing, perfect sand and sieved sea, you should really explore a bit. Just to check out some more Dubai stats.

Step inside The Burj Al Arab (the fourth tallest hotel tower in the world) and the opulence immediately hits you. The fiercely modern design is interspersed with flashes of Arabian art. There's a laser fountain in the lobby, the suites have marble staircases and obligatory Bentleys, Lamborghinis and Ferraris line up outside.

Way up on the 27th floor, in the Skyview Bar, you get a sense not just of the scale, but the buzz of the city, your eyes drawn by a vista of twinkling lights.

Unable to decide which of the restaurants to dine in, I opted for the ‘Culinary Flight’ experience which means you get to have a course in each of them. The most glamorous, Al Mahara, is set into the side of an aquarium where you dine with sharks. There's not much chance of conversation: everyone remains transfixed by all the sea creatures gliding before their eyes.

But don't expect many locally caught delicacies in Dubai. This place is all about flying in the best of the best from around the world. My dining experience at the seafood restaurant Pierchic, at the Madinat Jumeirah resort, had a distinctly multinational feel: French oysters, Scottish scallops, Canadian lobster, Norwegian crab and Dover sole. Ludvik , the restaurant manager, is French, while the head chef, Rosalind, hails from Surrey.

Again, I decided that the only way to manage such choice was to have a bit of everything (the seafood platter seemed to be the perfect solution). Equally, the Asianfusion menu in Buddha Bar at Grosvenor House demands that you be bold and run the gamut from sushi and sashimi to Australian wagyu beef.

Dubai's brasher side is evidenced in the fact that much of the food that I ate had flown even further than I had to be here; concerns about your carbon footprint are unlikely to be allayed in the middle of a

desert city. You can't dispute how good it tastes, but it comes at a price. Strict laws govern alcohol consumption in this Muslim land. You can expect to pay the same for a glass of champagne in a restaurant as you would pay for a bottle in London. It didn't surprise me that the world's most expensive wine has just gone on sale here.

If you've a spare £122,000 you can pick up a balthazar of Chateau Margaux 2009.

Rather cheaper is a litre of petrol. At 1.50 dirham (30p), this means taxis are entirely affordable — handy, because despite the city having emerged from the desert, you have to drive some way to catch a glimpse of a sand dune. I headed there for the obligatory dune-driving experience and all our hectic commotion made for a strange contrast with the group of Bedouins that we spotted herding their camels in the far distance.

My guide, Zeeshan, talked me through Dubai's recent history. The symbol of Dubai was once the horse, he said.

Before the economic crisis a more accurate symbol would have been a crane. Now, said Zeeshan, Dubai's symbol would have to be the shopping mall.

He's right about these shopping arcades.

Dubai Mall may be one of many — but it's the biggest. It has more than 1,000 shops, a 22-screen cinema, an Olympic-sized ice rink and a giant aquarium with 33,000 aquatic inhabitants. And it all stands in the shadow of the world's tallest building, the spiralling Burj Khalifa (830m).

It would be easy to dismiss Dubai — as I did — for being superficial and showy. But having been there, I now wonder whether Dubai is, in fact, setting its sights on trying to cram the best of travel into one place.

After all, if we're doing tick-lists of what you can get from a destination, what's not to like about opulent hotels, glorious sunshine, fine food and glamorous shopping?

Sure, all those statistics can leave your head spinning — but sometimes it's good to leave the quiet life behind and embrace the opulence of the emirate. When it comes to exploring Dubai, I feel like I've just had the starter.

Charlotte Hawkins is a presenter on ITV’s Good Morning Britain

I SAY DUBAI

Travel essentials

Getting there Flights to Dubai are offered by Emirates (0844 800 2777; emirates.com) from six UK airports, and from Heathrow by British Airways (0844 493 0787; ba.com), Qantas (0845 774 7767; qantas.com), Royal Brunei (020 7584 6660; flyroyalbrunei.com) and Virgin (0844 209 7777; virginatlantic.com).

Staying there Al Qasr (00 971 4 366 8888; jumeirah.com) offers doubles from AED2,113 (£350), including breakfast.

Visiting there É The ‘Culinary Flight’ experience at The Burj Al Arab (00 971 4 301 7777; jumeirah.com) costs AED815 (£135) for lunch and AED1,020 (£169) for dinner. É Pierchic at the Madinat Jumeirah (00 971 4 366 6730; jumeirah.com). É Buddha Bar at Grosvenor House (00 971 4 317 6000; grosvenorhouse-dubai.com). É Dubai Mall (thedubaimall.com).

More information definitelydubai.com Dubai by numbers 830 The height, in metres, of the Burj Khalifa. Reaching like a needle into the sky above Downtown Dubai, the 164-floor behemoth is the tallest man-made structure in the world. A visit to the vertiginous observation deck costs AED125/£20 (burjkhalifa.ae).

33,000 The number of marine animals on display at Dubai Aquarium and Underground Zoo. Located on the ground floor of Dubai Mall, it has the capacity to hold 10 million litres of water and hosts more than 140 different aquatic species, including a collection of sand tiger sharks (the dubaiaquarium.com).

502,000 The area, in square metres, covered by Dubai Mall. Not content with being the largest retail space in the world, the 1,200-shop whopper is expanding in a bid to hit the one-million-square-metre mark and welcome 100 million visitors a year (thedubaimall.com).

400,000 The number of fireworks used in Dubai’s recordbreaking New Year's Eve display to welcome in 2014. The six-minute show danced across the emirate’s sky and rocketed it into the Guinness World Records (definitelydubai.com).

7 The number of stars claimed by the Burj Al Arab hotel. The sail-shaped, suite-only retreat offers 200 rooms with butler service, nine restaurants, four pools and a goliath spa. Helicopter transfers cost a mere AED10,000/£1,637pp . . . one way (jumeirah.com).

12 May 2014 BUSINESS MONTH 55

offline

TRAVEL

Splendid proof life’s a Beech Hill “IF it's good enough for a president of the US — not to mention any friends we might happen to run into — it’s good enough for us.” It’s a rule of thumb which worked well when we chose the Beech Hill Country House Hotel as a place to stay during a flying, but still restorative, visit to Londonderry.

President Bill Clinton is one of many famous figures to have soaked up the hospitality of the beautiful Georgian 30-bedroom country house hotel a few miles outside Derry. Tradition, old friendships and Irish-American bonds are cherished here, as the estate was used as the US Navy’s operating base during the Second World War. It’s set in 32 acres of mature parkland — including the beech tree which inspired its name — and there are waterfalls and ponds, with plenty of walks and mountainbiking opportunities. It’s family-run — by Patsy O’Kane, nee Donnelly, and members of the Donnelly family.

The house has a rich history, dating back to 1729 when it was built by Captain Thomas Skipton. New wings and a porch have been added but its innate historic character remains. Two quonset huts in the grounds are a fascinating reminder of its Second World War history. Guests can read mementoes of that tumultuous chapter, such as a menu for Christmas dinner in 1942.

We are lucky enough to stay in an elegant master suite with a garden view. A large sitting room adjoins our bedroom, which has a king-sized bed, roomy en suite and walkin wardrobe/dressing room.

There are gilt-edged furnishings and an Irish lace table-

8 BUSINESS MONTH 12 May 2014

cloth on the coffee table.

Such is the size of the suite that we wonder, will we hear the waiter’s knock when he brings breakfast?

Every bedroom has been individually restored in a Georgian-style, some with four-poster beds. But even the hallways are dotted with antique dressers and bookshelves, adding to the oldcountry house atmosphere.

We are welcomed into the grand bar area of the Gallery Lounge ahead of our evening meal — grandeur itself, with high ceilings, cornicing and an open fire.

We are eager to get started but this is not a place where dinner is rushed. Instead, we sink into a sofa in the lounge to unwind before our order is taken — all part of the pleasing formality which makes coming here such a getaway.

To our delight, we run in to friends from home, who are also up for the night.

If you manage to tear yourself away from the all-enveloping comfort, the hotel can arrange outdoorsy activities in the area. And if you’re on a mission to soak up some of Derry’s history, a walking tour from the fivestar rated Martin McCrossan Tours is a brilliant introduction. The sprightly and knowledgeable Garvan Kerr takes us around the city’s historic walls, bringing in events in its long history from the Siege of Derry in 1689, through the tragedies of the Troubles, including Bloody Sunday, to its presently growing vitality as a cultural centre and tourist destination. Its calendar year as UK City of Culture may be up, but there’s still plenty to capture your attention in Derry.

12 May 2014 BUSINESS MONTH 57

offline

Appointments

OUT AND ABOUT

with The

CHAIRMAN Our man about town was witness to a host of well-deserved awards, topped only by the Lord Mayor’s rousing speech

Paul Johnston has been appointed as a consultant in litigation and dispute resolution at A&L Goodbody. A renowned specialist in the defence of catastrophic injury, he has more than 35 years of experience in litigation and dispute resolution.

Lucy Cairns has been appointed digital communications executive at Lighthouse Communications. She will be responsible for strategically placing key messages online through social media channels, blogs and news sites.

Graeme McCluskey has been appointed business development manager at Eircom. He has over 20 years’ direct sales and management experience in the telecoms and telematics industries.

T

HERE are few more impressive settings in Belfast for dinner than the Harbour Commissioner’s Office. This 19th-century architectural gem has been restored to its full glory and was the setting for a dinner attended by the board members of the Belfast Telegraph’s parent company Independent News & Media, advertisers and politicians.

Also in attendance were prominent business people from around Northern Ireland and the Lord Mayor of Belfast, Mairtin O Muilleoir. Proceedings began with an introductory speech from Leslie Buckley, chairman of INM plc, who praised the Belfast Telegraph for its excellent journalism and continued innovation, while also outlining the steps INM has taken to grow its business in a tough environment.

Mr Buckley's praise for the Telegraph was echoed by the Lord Mayor, who unavoidably arrived late but more than made up for it with a rousing speech. Mr O Muilleoir praised the Telegraph's campaigning journalism and described it as an institution and essential part of the city's heritage and future.

The wide selection of guests also included Professor Deirdre Heenan of the University of Ulster, Rotha Johnston, entrepreneur and Pro Chancellor at Queen’s University Belfast, and the legendary Dame Mary Peters. There was praise as well for Dr Len O'Hagan, chairman of the Harbour Commissioners and INM board member, for hosting the dinner in the magnificent surroundings.

Other attendees included Simon Brien of BTWShiells,

58 BUSINESS MONTH 12 May 2014

Professor Deirdre Heenan, UU; Gail Walker, Deputy Editor, Belfast Telegraph.

Tom Kelly, Stakeholder; Feargal McCormack, FPM; Lord Rogan; Richard McClean, Managing Director, INM (NI); Dr Len O’Hagan, Chairman, Belfast Harbour Commissioners.

Dame Mary Peters; Leslie Buckley, Chairman, INM plc; Ellvena Graham, Head of Banking NI, Ulster Bank.

Appointments

Gavin Elliot has been appointed director of capital markets at CBRE. He will be responsible for the disposal and acquisition of commercial property as well as asset management and development.

(l to r) Darren Lemon of Eircom, Sir Mike Rake, CBI chairman Colin Walsh and Adrian Doran of Barclays

Julie Cathcart has been appointed senior surveyor at CBRE. Working within the professional services department, she will be involved in all aspects of landlord and tenant work.

(l to r) Jacinta Parkhill, Claire Bonner and Moya Neeson of Morrow Communications Brian Ambrose of George Best Belfast City Airport, David Dobbin of Dale Farm, Ellvena Graham of Ulster Bank, and Feargal McCormack, of accountancy firm FPM. John Knapton, his offices within view across Belfast Lough, represented the Northern Ireland Science Park at the dinner.

Finally, there was a special mention for Vincent Crowley, departing chief executive of INM, for his work in bolstering

the company's financial position and leaving it in a position of strength as he departs.

----CBI Northern Ireland held its 2014 Annual Dinner at The Ramada Plaza, Belfast, and The Chairman was delighted to attend. He was enthralled by CBI chairman Colin Walsh’s words of wisdom as he urged the Northern Ireland Executive to set aside political difficulties and focus on tackling key chal-

lenges such as education and skills, public sector reform and energy.

The evening also included a keynote address from Sir Mike Rake, CBI president, and chairman of BT Group, deputy chairman of Barclays, and a director of McGraw Hill.

Sir Mike and Mr Walsh discussed the issues of the day with Darren Lemon, general

Continued on page 60

Sean Doherty has been appointed senior building surveyor at CBRE. Working within the building consultancy department, he will carry out a full range of professional services on dilapidations, building surveys and planned maintenance programmes.

12 May 2014 BUSINESS MONTH 59

offline

THE CHAIRMAN

Appointments

Paddy Henry has been appointed senior surveyor at CBRE. His main focus will be on service charge budgeting and implementation.

Dwaine Smyth, founder of The Meat Cleaver, was named the Sir Allen McClay Young Business Person of the Year Award at the Craigavon Business Awards. Lady McClay, wife of the late Sir Allen McClay, presented the award, while host Jim Fitzpatrick looked on.

John Trethowan has been appointed chairman at Progressive Building Society.

For over 40 years, Mr Trethowan has been involved with both public and private enterprises throughout Ireland.

Barry McGrane has been appointed chief financial officer at Moy Park. He joins the company following a career spanning over 20 years with United Drug plc, where he held the position of group finance director.

manager of Eircom UK and Adrian Doran, Barclays head of corporate banking in Northern Ireland. (In the picture on p59 The Chairman is out of shot, plucking up the courage to ask Sir Mike on what a man’s got to do for a knighthood these days). Also among the great and the good at the Ramada were Morrow Communications’ Jacinta Parkhill, Claire Bonner and Moya Neeson.

Lord Rana, managing director of the Andras Group — of which the Ramada Plaza is part — was chatting to Sir Mike Rake, and The Chairman was pleased to run into Gary McDonald of the Irish News, as he usually does at these events.

Davy Elliott was there, too — no, not the much-missed former master of this publication, but Davy Elliott of AES. Mr Elliott posed for a picture with fellow Davids, David Watters of RSM McClure Watters and David Mills of Aon Risk Solutions — and having seen no pictures taken of a single David thus far, The Chairman was amused to see three photographed at once.

----THEY say the road to Craigavon should be called the A1 — that's just how The Chairman would describe

60 BUSINESS MONTH 12 May 2014

Canteen at the MAC management team are pictured celebrating two top years, (l-r) Paul Gillen, Duty Manager, Sharon Wright, Director, Terry Reilly, Duty Manager and Sean Mc Cann, Head Chef. the Craigavon Business Awards.

Organised by Craigavon Borough Council’s Development Department, in association with Portadown Chamber of Commerce and Lurgan Chamber of Commerce, the glittering ceremony, compered by the hardest working MC in the business, Jim Fitzpatrick, was held at the Craigavon Civic and

Conference Centre and saw 14 awards handed out to companies selling everything from tasty meats to slurry tankers.

One accolade was in memory of The Chairman’s old friend, the late Sir Allen McClay, one of Northern Ireland’s finest entrepreneurs and founder of the Almac Group.

That trophy was handed out

Appointments

Brian McDowell has been appointed sales and marketing director at Hughes Insurance. He will be responsible for the marketing strategy across PR, advertising, affinity relationships and business development.

Jayne Taggart, chief executive of Causeway Enterprise Agency (CEA) has been awarded the Queen's Award for Enterprise Promotion. She has been closely involved in promoting enterprise in the Causeway area since 1994 when she joined Causeway Enterprise Agency

Kieran Gilmurray has been appointed operations director at Hughes Insurance. He has a first class MBA from Queen’s University and 20 years’ experience in business operations.

International law firm Pinsent Masons has announced the promotion of three new partners to its Northern Ireland operation, amongst 15 new partnerships globally. The new Belfast partners are Paul Gillen in the employment department, Laura Gillespie in litigation and regulatory and Richard Murphy in energy and natural resources. The promotions take effect from the start of this month to Dwaine Smyth, founder of The Meat Cleaver, as he was named Young Business Person of the Year. Lady McClay, wife of the late Sir Allen, presented the award to Mr Smyth, commending his business philosophy and his efforts in putting Craigavon on the business map.

Mr Smyth and his team will now receive valuable mentoring

from Almac and seven of its business partners.

The Best New Business award went to Scallywags of Lurgan, New Forge House claimed the Best Green Business, JH Label winning the Most Innovative Business Category while Ballydougan Pottery were awarded Tourism and Hospitality Business of the Year.

SlurryKat, often a winner, came away with three awards including the 2014 Craigavon Legacy Award.

Other winners on the night included Icons Coffee (Best Restaurant or Food Provider), BNL Productions (Best Creative Business), Funky Monkeys (Best Multiple Retailer) and Segway NI (Best Rural Business).

Ian Marshall has been appointed president of the Ulster Farmers’ Union. His appointment comes at an important time within the agri-industry and he will work on key areas such as CAP reform, Going for Growth and farm safety.

12 May 2014 BUSINESS MONTH 61

LEESON’S LAST WORD

with Nick

Leeson

Phone hacking and rate fixing are very real activities which have revealed the sinister underbellies of banking and the media – but let’s not forget the distortion of reality

I

GOT a phone call last week that for many would have been disconcerting. For me, apart from a slight increase in heart rate as I had to speak to the Metropolitan Police, the subject matter did little more than raise a wry smile. A UK-based journalist has admitted trying to hack my phone and as a consequence I am now part of Operation Weeting, the hacking enquiry to follow the Rebekah Brooks and News of The World trial.

The call reminded me of two things. Firstly, like the banks, how the media world had completely lost the run of itself over the past decade and was engaged in activities that were winning them no friends. Agreed, it was only certain media and certain banks but when you peel back the glossy veneer it exposes an underbelly that is often quite sinister.

I’ve learnt over the years that it is easier to work with the media rather than in any way try to withhold information so I’m amazed that the journalist in question didn’t just pick up the phone and call.

It would have saved a lot of time and money but maybe it wouldn’t have ratified his new hacking techniques and justified the handsome salary he was paid.

The average banker is as dodgy as any used car salesman that you’ve ever met. Hot on the heels of PPI, swaps, Libor and associated rate fixing, we are now told that the FX rate fixing inquiry makes the former look like kids’ play.

Investigations are ongoing in New Zealand, Hong Kong, the US and various locations in Europe.

Bankers currently on gardening leave number in the hundreds and look sure to escalate further.

How easy is it to manipulate a market? In the very short term, if you have enough money at your disposal, the answer is not that difficult — but consistently fixing a rate is a coordinated, consolidated, consistent practice and needs collusion. In short, fraud! It cannot happen without collusion.

62 BUSINESS MONTH 12 May 2014

Does it end here? No, I’m reliably informed that the commodities market is the next to come under the spotlight.

The second thing that I was reminded of was the power of the media. Perception is not always reality and the media and marketing play a huge role in how certain information is perceived and understood.

Banks are fully aware of this and while they have been the whipping boys of the editorial for some time now they are also the darlings of the advertising pages as they have big budgets to spend.

We are told that banks are lending. It’s not the first time we’ve heard this. Three years ago we were told that the number of new loans was increasing rapidly, but the banks were simply massaging the numbers by converting overdrafts to loans. AIB are supposedly approving four out of every five mortgage applications at the same time that they are frontpage news in allowing mortgage write-down. Where do I sign up?

Permanent TSB have renamed

In short, fraud! It cannot happen without there being collusion themselves PT Yes B and Ulster Bank are beating the street, approving nine out of 10 mortgage applications. Now, on foot of the Tomlinson report and deliberating engineering default, if Ulster Bank has even seen 10 applications, I’d be surprised. Everyone is looking for the good news story but manipulating numbers is far easier than manipulating rates.

The moral of the story, don’t hack my phone, just call — if I can help, I will. Secondly, bankers are giving used car salesman a bad name, but most importantly don’t believe everything that you see and hear in the media — only this article!