Business Month November 2014

INCISIVE, OBJECTIVE, INDEPENDENT

November 2014 • ISSUE 48 PRICE £2.50 (Where sold)

In association with

WE NEED TO MAKE THINGS

After Gallaher’s, whither manufacturing in Northern Ireland?

Glory days: Workers at Harland and Wolff’s engine works tool room, 1935

• DUBLIN WEB SUMMIT PREVIEW • FOCUS ON EUROZONE AND US ECONOMIES • PAUL GOSLING ON WELFARE REFORM

3 November 2014 BUSINESS MONTH 1

CONTENTS

48 37

Editor’s note Margaret Canning

FEATURES

mcanning@belfasttelegraph.co.uk

W

12 Analysis: Firms from the north will be well represented when international delegates attend Europe’s biggest technology event.

14 Analysis: Joan Houston analyses the new loans environment after profound changes in the banking world.

16 Economy Watch: We look at the economies of the United States and eurozone.

22 Analysis: Alan Watts explores how venture capitalists are faring in a new era.

37 On song: The indie cherub who went on to become a top PR man in Northern Ireland.

FOCUS

38 Office space: A lack of top grade office space in Belfast is stifling economic growth, say property agents.

42 Sponsorship of the arts: Commercial sponsorship could come to the rescue and give the cultural scene a much-needed lift in the face of savage cuts.

COVER STORY POSITIVE OUTPUT Despite the gloom,forecasts for the manufacturing sector remain upbeat

OFFLINE

46 Out to Lunch: Joris Minne visits James Street South with Robert J Cooper, the head Harland and Wolff Heavy Industries Ltd. 48 Day in the life: Graham Keddie managing director of Belfast International Airport.

58 The Chairman: Our man about town gives us the inside track on business.

62 Last Word: Restaurantshere areburgeoning.Butthisgrowth couldbehaltedduetothehighrate ofVatcomparedtotheRepublic.

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

48

58

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

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

ELCOME to the November issue of Business Month, in which we tackle the thorny subject of Northern Ireland’s manufacturing sector head-on.

In light of the proposed closure of Gallaher’s in Ballymena in two years’ time, Paul Gosling considers if reports of the demise of manufacturing in the province have been greatly exaggerated.

What we do know is that, notwithstanding Gallaher’s, we have plenty of manufacturers who are in rude health.

Harland & Wolff, as well as being the subject of our front image, provides a case study of how a maker can move with the times.

But we also want to show off our great tech companies — and that’s why we’re taking a special look at the Dublin Web Summit, taking place later this week.

No doubt there’ll be some slightly sore heads today as the mini Belfast Summit took place last night, just as Business Month was coming off the presses.

Paul Gosling is also peering into the murky issue of welfare reform, while our Focus Ons are honing in on office space, and the growing popularity of sponsorship of the arts by the corporate world.

The Chairman is also relieved to see the business social scene cranking up a gear.

Enjoy, and see you again in December.

3 November 2014 BUSINESS MONTH 3

NEWS BITES

5%

increase in overseas visitors

19%

increase in overseas holidaymakers

31%

increase in Great Britain holidaymakers

29%

growth in North America holidaymakers

7%

growth in revenue from all overseas visitors

Source: Tourism statistics for January to June 2014, compared to 2013, Nisra

Invest NI gives Seagate £8m of added support IT company Seagate has received £40m of support from Invest NI in the last 12 years, the economic development agency has said — including £8m towards the company’s latest project.

A new £34.7m investment by Seagate in Londonderry, one of Invest NI’s most heavily-supported companies, will account for over 40% of Northern Ireland’s research and development spending target for 2014. The figure will include 35 new jobs at the company, with an average salary of £35,000 per annum.

Invest NI said that support for Seagate projects will also contribute towards £254m of investment into the economy.

Seagate came to Northern Ireland in 1993 when it established the facility at Springtown industrial estate and now employs around 1,400 people making parts for computer disc drives.

However, in 2008 the company’s Limavady plant shut its doors with the loss of almost 1,000 workers. Money given to that development by Invest NI was eventually clawed back.

East Londonderry MLA Adrian McQuillan said: “While I hope this affirms further commitment to the city of Londonderry from Seagate, it is a pity the people of Limavady could not have benefited from this sort of investment.”

Health giant Eakin buys medical skin care maker CO Down specialist healthcare business Eakin Group has acquired English firm Cliffe Medical, which owns Respond Plus in Larne, for an undisclosed sum.

Comber-based Eakin, which makes medical skin care products for use in stoma and wound care, said the acquisition would boost its workforce by 55 to 280 people.

Cliffe Medical is based in Nottingham and has two trading subsidiaries, Ostomart Ltd and Respond Plus, a home delivery service for stoma patients.

Respond Plus employs 11 staff who dispense stoma products

WINNING FORMULA: Students from Lurgan College helped launch Almac’s schools outreach programme Pathway. At the pharmaceutical company’s Craigavon headquarters are (left to rright) Derek Baker, Permanent Secretary of the Department for Employment and Learning, Jamie Davison and Samantha Bann from Lurgan College and Stephen Barr, managing director of Almac’ Sciences’ business unit directly to patients as well as providing a nurse advisory service.

With a turnover of £72m, the Eakin Group is one of Northern Ireland’s biggest success stories in the health sector.

Tesco hit as it admits £263m accounts hole TESCO’S share of the Northern Ireland grocery market has fallen steeply over the 12 months to September 2014, figures show.

The supermarket giant, which has owned up to a £263m hole in its UK accounts, is the dominant player in the region’s grocery market with 56 stores and a 35.5% share, according to figures from Kantar Worldpanel. This is nearly double rival Sainsbury’s market share of 18%. But the dominance of Tesco is on the wane, the Kantar figures suggest, with its market share decreasing from 35.9% in 2013, and its sales growth dramatically falling from 3.9% to 0.1%.

Tesco has acknowledged that it has a £263m hole in its ac-

4 BUSINESS MONTH 3 November 2014

counts, more than the £250m previously expected. As a result of the profits error, shares in the group dropped by 7%, wiping a colossal £2bn off its value. Chairman Sir Richard Broadbent has announced he will step down.

Master Builders warn over public sector cuts THE Federation of Master Builders has said looming public sector cuts could hit the recovery in Northern Ireland’s small and medium-sized construction sector.

The warning came as the FMB published results of its state of trade survey for quarter three 2014, showing Northern Ireland has remained in positive territory for the sixth successive quarter.

In contrast, businesses stating lower levels of activity declined to 10% from 14%.

Louise Ward from FMB Northern Ireland said: “The SME construction sector has been slowly recovering over the past 18 months but it is important

to remember that the wider construction sector won’t reach pre-recession levels until 2017.

“Worse still, the looming public sector spending cuts in Northern Ireland are likely to pull the rug from under us before we have managed to regain our footing.”

Goldman Sachs makes first big NI investment INTERNATIONAL investment bank Goldman Sachs is making its first substantial investment in Northern Ireland with a deal to buy loans on Belfast’s Merchant Hotel and other assets from Ulster Bank.

Goldman Sachs is the preferred bidder to buy loans relating to the Cathedral Quarter hotel and four others in the Republic — packaged up as Project Nadal — after winning out over four other bids.

All the properties remain open for business as Ulster Bank continues the process of divesting itself of property debt through portfolio sales.

NEWS BITES

Cigarette plant jobs under consultation PAUL GOSLING

▲ HOUSE PRICES Northern Ireland average house prices rose by 19.5% in the last year to £109,392, according to the Halifax.

▲ IRISH HOUSE PRICES

The average house price in the Irish Republic rose by 15.0% in the last year, according to Ireland’s Central Statistics Office.

▲ DIY

Spending on home improvements will rise 38% in the next three years, predicts the Federation of Master Builders.

It says parents want more space to accommodate young adults who cannot afford to leave home.

▲ CONFIDENCE

Consumer confidence has hit a six year high, according to the Danske Bank’s consumer confidence index.

▲ BORROWING

UK government borrowing is continuing to rise — it increased by £1.6bn in the year ending September.

▼ INFLATION

The Consumer Prices Index was 1.2% in the year to September, down from 1.5% in the year to August.

▼ WAGES

UK real wages have fallen between 8% and 10% since the onset of the recession in 2008, according to the Centre for Economic Performance.

▼ STERLING

The pound weakened against the euro. A pound bought more than €1.28 in early October, before falling back to less than €1.25 in mid October and then rallying to €1.27 at the end of the month.

▼ BUILDING

Northern Ireland’s construction output has fallen. It fell by 3.7% in the second quarter compared to the first quarter and by 6.0% against the same period a year before.

▼ MANUFACTURING JOBS

The sector was responsible for 25% of UK jobs in 1978: it is now just 8%.

THE announcement of potentially almost 900 job losses at the JTI plant in Ballymena was hedged in terms of consultations about possible closure, rather than a definite decision.

In its statement the company said: “JTI will undertake appropriate consultations on proposals to change its product sourcing, which could lead to the closure of some of its manufacturing sites. JTI’s facilities in Lisnafillan (Northern Ireland) and Wervik (Belgium) would cease to operate, with production moving to other facilities, potentially in Poland and Romania.”

It continued: “Consultation with employees’ representatives and the European Works Council will be appropriately conducted.

Support for affected employees will be discussed as part of the consultation process. This proposal would affect approximately 1,100 full-time jobs across the European Union.”

Although the statement was not definitive, it is a requirement of European Union law for large closures to be subject to employee consultations. A spokesman for JTI said: “Consulting is part of a clearly outlined legal process in order to give the employees’ representatives the opportunity to understand and discuss the economic rationale of the company’s plans. JTI has completed considerable investigations before making this announcement, however it is prepared to consider any proposals which are made.”

It’s hoped JTI will keep some operations in Ballymena Employment and Learning Minister Dr Stephen Farry and Enterprise Minister Arlene Foster met representatives of JTI after the announcement to discuss opportunities for retraining. But Arlene Foster indicated that the Executive hopes JTI will retain some operations at Ballymena.

She said: “We are in the unique

position of having a considerable period of time to explore every available option to maintain some presence at Lisnafillan. Together with my officials in Invest NI, I will explore every option available to the company in terms of, for example, support for research and development, to avoid complete closure of the factory.”

Mixed bag in unemployment figures UNEMPLOYMENT in Northern Ireland has fallen yet again and is now down to 6.1%, as measured by the Labour Force Survey. This is only marginally below the UK rate of 6.0%. The Northern Ireland rate fell by 1.2% in the last year.

However, other statistics present a negative picture. Claimant count unemployment in Northern Ireland is actually the highest of any UK region at 5.9%. The UK average rate is a mere 2.8%.

Northern Ireland does even worse when rates of economic inactivity are considered. It has the highest rate of inactivity across the UK at 27.2%, compared to

6 BUSINESS MONTH 3 November 2014

22.2% across the UK. Some 29% of those who are inactive are sick or disabled, 27% are students, 25% are home carers and 12% have taken early retirement.

By comparison, of the UK figure, only 24% of the UK economically inactive are sick or disabled — the major factor in the difference with Northern Ireland.

Some 26% are students, 25% are home carers and 15% have taken early retirement. Northern Ireland’s high rate of economic inactivity means that it has the UK’s lowest employment rate at 68.3%, compared to the UK average of 73.0%.

Northern Ireland’s employ-

ment situation has improved significantly in recent weeks with a number of positive job announcements, which exceed the number of potential job losses at JTI. PwC is to recruit more than 800 new staff in Belfast, Allen & Overy has announced 100 new jobs in Belfast, Rapid7 will take on 75 people in Belfast, Version One will employ a further 50 staff in Belfast and Chelsea Apps is creating 33 jobs in Belfast.

Away from the capital, there were announcements of 60 new jobs with Autoline in Newry, 49 new jobs with Lakeland in Enniskillen and 35 new jobs at Seagate in Derry.

NEWS BITES

British-Irish visa scheme should open the north up to Chinese, says tourism bosses AGREEMENT on a co-ordinated British-Irish visa system is expected to increase tourist visitors to Northern Ireland.

Businesses involved in tourism have long complained that visitors from China and elsewhere have been blocked from visiting Northern Ireland because Ireland and the UK have different systems for approving visas for foreign nationals.

Niall Gibbons, chief executive of Tourism Ireland, said: “The introduction of the British-Irish Visa Scheme is really good news, making it easier than ever before for visitors from China and India to visit Northern Ireland and the island of Ireland.

“It is a significant step in helping us to grow visitor numbers from these markets — whether those visitors wish to travel here for sightseeing, golf or simply as business tourists.

“For the island of Ireland, the majority of our overseas visitors come from Great Britain, North America and mainland Europe, and while this will continue, it is important that we expand our focus beyond these markets and look to the long-term opportunities presented by new tourism markets, particularly China and India, which we believe will play an increasingly important role for travel and tourism.

“Given that visitors from these markets are travelling a considerable distance, and often want to include more than one destination on their itinerary, it makes sense to make it as easy as possible for them to visit both Ireland and the UK on a single visa.

“We will be working closely with our colleagues in VisitBritain, to leverage the benefits of the new scheme in both India and China.”

The joint visa scheme will be in place in time for bookings for summer 2015.

Overseas property investors move in PAUL GOSLING THE banking crisis has led to a raft of overseas investors buying-up property in Northern Ireland, the Republic and Great Britain.

According to figures from the Property Industry Alliance, overseas investors are now the largest owners of UK commercial property. Previously, institutional investors were the largest group of owners.

The value of portfolios held by overseas owners in the UK has more than doubled over the last decade to £94bn. Sovereign wealth funds were particularly active last year in making large scale property acquisitions. Overseas investors now own almost one quarter of all commercial property investment. Institutional investors’ holdings of commercial property fell in the same period by 16%, to £75bn.

Sir Robert Finch, chairman of the Property Industry Alliance, said: “Drawing on recent work by the Investment Property Forum, the (Property Data) Report highlighted that of the £683bn total UK commercial stock, retail is the largest sector by value, £305bn; followed by offices, £195bn; and then industrial property, £126bn.

Other commercial property, including hotels and leisure, was valued at £58bn.”

The Northern Irish commercial property market has been particularly active in recent months.

In one of the most recent deals, Goldman Sachs has bought a portfolio of Northern Ireland property-related loans from Ulster Bank at the completion of the so-called Project Nadal operation.

Ulster Bank is also selling its Project Aran portfolio of non-performing loans in the Republic, Northern Ireland and GB. This may lead to the buyer taking

ownership of the underlying properties — probably at below market values.

In a third major transaction, Ulster Bank is making progress with Project Achill, a portfolio of loans secured on commercial and residential properties.

These include some of Northern Ireland’s most high profile property schemes including Belfast’s Waterfront Plaza, the Arc Apartments in the Titanic Quarter and the Ards Shopping Centre.

Earlier this year, Cerberus Capital Management of the US bought Nama’s Project Eagle portfolio, which consisted of property-related debts held by Northern Ireland-based debtors.

Some of those properties are now being sold by Cerberus. Assets placed on the market include part of the Crescent Link out-oftown business park in Derry and a site approved for the building of apartments in Portstewart.

Shops record a rise in footfall despite drop in UK as a whole THERE are positive signs for Northern Ireland retailing.

Footfall rose in Northern Ireland’s shops in August by 4.2% over the year before and by 0.2% in September.

This contrasts with a drop in footfall in the UK as a whole, where it reduced by 0.9% in September compared to the year before. Recent footfall figures show a stronger performance by high streets and a fall in visitors to shopping centres.

Aodhan Connolly, director of the Northern Ireland Retail Consortium, said: “It is encouraging to see we again have positive growth in our footfall in Northern Ireland even if it is slight.

“The figure of 0.2% growth may seem insignificant but it must be remembered that any growth is a positive sign, that we have performed better than the national average of a decline of 0.9% and most of all we have had six months growth in footfall this year.”

Diane Wehrle, retail insights director at Springboard, which produced the figures, added: “High Streets are the clear

8 BUSINESS MONTH 3 November 2014

Figures show rise in customers to high streets and fall in shopping centres winners, whilst the 4% drop in footfall in shopping centres reflects their dominance by fashion retailers, and the fact that it was this sector that suffered from the unusually warm weather in September and the concomitant impact on fashion sales.

“Whilst out-of-town locations still recorded a positive result in September — reflecting the positive sales in furniture and

household goods — the fact that the increase in footfall is by far the most modest of any month in 2014 suggests this channel has felt the impact of the poor performance in fashion, a strong indicator that their success now also hinges on this sector.”

NIRC predicts visitor numbers and sales will rise in the run-up to Christmas, but warns retailers that online competition will be strong.

NEWS ANALYSIS

Melting pot of skills needed to push ahead AISLING PRESS ALL recent indicators point to Northern Ireland’s growth potential across a range of business sectors, not just in agri-food, which we seem to be getting better at shouting about, but also in manufacturing, technology and IT. The NI Composite Economic Index (NICEI) highlights an annual economic activity rise of 1.2% since the second quarter of 2013 and an increase in private sector performance.

The Northern Ireland Centre for Economic Policy (NICEP) spring outlook 2014 shines a ray of light on manufacturing and points to the recovery of jobs in the sector, but caveats this news with the fact that although external sales to Great Britain are performing well, productivity is broadly static and exports outside the UK have fallen by 1.2%.

We all know the importance of rebalancing the local economy and therefore the need to pro-

mote and develop private sector business here.

Through engaging with the business community I’ve had the chance to appreciate and evaluate the melting pot of skills and circumstances needed to push ahead in these business sectors.

The necessary ingredients include better collaboration between the government, universities and private sector — and I’d include banking in that — as well as a stronger focus on innovation and entrepreneurial spirit, across all of these sectors.

Within the bank, we have recently developed a number of specific business packages and are supporting a number of exciting entrepreneurs — so we know Northern Ireland has a number of rising stars already putting innovation at the heart of what they do.

One example is the multi-award winning Plotbox, an interactive software company that mines, collates and maps data about graveyards and burial grounds.

10 BUSINESS MONTH 3 November 2014

Most recently it picked up the top prize at the Northern Ireland Science Park Invent awards and is certainly one to watch.

We have had the pleasure of working with them to fund their business to the next level and know that they have opened up a truly global market providing a solution to an age old problem through application of innovative thinking.

Similarly, Quad-X, a Co Antrim manufacturer of machinery and accessories for the quad bike and agricultural market, has expanded its operations and created 25 jobs with our support, after the application of clever engineering.

Likewise, Portadown-based joinery business Deluxe Group recently announced major expansion plans following recent export success having won significant contracts for Disneyland Paris and for a new energy science centre in Saudi Arabia on behalf of Saudi Aramco.

Export figures highlight that clearly it’s not just the larger well known private sector firmss

Aisling Press, regional manager of First Trust Bank accounting for manufacturing exports — our lesser known but equally impressive smaller companies are putting Northern Ireland on the map. We just need to harness that talent and courage.

The innovation and entrepreneurial gene is in our DNA here. We just need to rediscover, reignite and replicate it - and that is something we all in the wider business community can help nurture.

NEWS ANALYSIS

Summit really special Firms from the north will be well represented when international delegates attend Europe’s biggest technology event, writes Margaret Canning BLOOMBERG wryly called it ‘Davos for geeks’ — because for sheer scale and aplomb, the Dublin Web Summit rivals the annual celebrity-strewn festival of ideas in Switzerland.

In fact, it’s Europe’s biggest technology event with 10,000 attendees, more than double the size of the next biggest tech gathering.

When the Dublin Web Summit takes place in the RDS this month it will attract thousands of international delegates — there’ll be Fortune 500 companies like PayPal, Google, Facebook and thousands of start-ups.

There will also be a strong representation from Northern Ireland companies, with Brewbot, Glistrr, DisplayNote, Analytics Engines, Pulsatedate, Bottletop Media and AirPOS among around 20 people keeping the side up for north of the border.

DisplayNote, which recently received a £1m cash injection from Kernel Capital, will use the Summit to launch a new mobile collaboration product called Swoopit.

And entrepreneur Paul Stewart from Belfast, who established student luggage delivery service Unibaggage.com, has chosen the event to unveil his new venture, FETCH. It is a same-day delivery app for ordering items for delivery within an hour, from groceries to electronics.

FETCH will join the Summit’s special Alpha programme for particularly promising start-ups.

Mr Stewart said: “The Web Summit is a fantastic conference where the tech community meets.

We are delighted to have been selected to exhibit.

“Our main aims are to grow our network and raise awareness of FETCH in Europe. I am looking forward to mingling with other start-ups and hearing some of the big name speakers.”

Marty Neill from Belfast is the founder and chief executive of AirPOS, which makes software to help retailers sell in stores and online for clients including Samsung, PayPal and Apple. He will be back down this year after

Even more Northern Ireland firms are expected to attend this year’s Dublin Web Summit attending the inaugural event in 2010, and a “wee, secretive one” back in 2009.

AirPOS has also been invited to join the Alpha programme.

“It’s amazing, just unbelievable — basically the largest collection of start-ups and investors anywhere in Europe,” Mr Neill said.

“The people you get to meet, it’s just flabbergasting.

“You meet people from Estonia, Russia — investors from all over the world, and it’s the only place outside the US that you’ll get that type of access.”

And you need to have the chutzpah to approach complete strangers to promote your startup. “If you don’t have that, you’re in trouble. It’s very much a startup environment — if you’re doing the start-up dance and you’re afraid to talk to people, you’re in the wrong place.”

Last year’s event witnessed such eye-wateringonders as Bono working the room and Ireland’s Taoiseach Enda Kenny ringing the opening bell for the Nasdaq.

Niklas Zennstrom, the founder

12 BUSINESS MONTH 3 November 2014

of Skype, even said he was there “to find the next Google, the next Facebook”.

And the event has also hosted Twitter founder Jack Dorsey, Netflix founder Reed Hastings, and The Huffington Post founder Arianna Huffington.

Nasdaq said ‘there was a quarter of a trillion dollars worth of private internet companies in the room’.

This year, a preview event took place in Belfast on November 2, to give around 150 start-ups from the province the chance to ‘perfect their pitch’ (in the words of organisers) before the main event in Dublin.

Start-ups from this side of the border heard from speakers and were able to network with investors.

Invest NI will be present at the Dublin event, accompanying seven tech companies from the province. Some of those are already showing the export-driven focus that can make a web company stand out from the crowd.

But the sheer scale of the Web

Summit blows most business networking events out of the water.

Start-ups will be able to network with 1,000 journalists from 65 registered countries, representing publications and news services like Germany’s Der Spiegel, the New York Times, Bloomberg, Reuters and Forbes.

Last year 900 high calibre start-ups exhibited over two days, and there were dinners for partners and speakers in stunning venues like Christchurch Cathedral in the city.

The roots of the Summit go back to 2010, and an informal gathering of 450 people from the tech community in Dublin. Three years later, and there were well over 10,000 people, with 60% of the Fortune 500 in attendance.

A Summit spokesman said: “Within three years, we have become the most influential and international tech event in Europe.

“The Summit 2013 showcased over 250 world-renowned speakers, 1,000 exhibitors, 100 satellite events and the opening of the Nasdaq market live on stage.”

NEWS ANALYSIS

A new era for borrowers Joan Houston, restructuring specialist at Begbies Traynor, analyses the new loans environment after the profound changes in the banking world

This year has seen a number of changes in how banks deal with property debt - with Ulster Bank leading the way BORROWERS from Ulster Bank and other institutions are looking on as large-scale sales of property portfolios are advertised. In some cases, such as the sale of loans secured on hotels like the Merchant Hotel, transactions are already well under way.

It is expected that many of the transactions will be completed by the end of the year. So what does that mean for anyone with a loan?

The loans disposal process has suited politicians and banks who believe that it is another step towards the sunlit uplands of an improving the economic landscape. It is clear that the release of parcels of toxic loans from a bank will mean that they have brought finality on the situation with regards to their balance sheet.

The banks no longer have to deal with large tranches of property loans which were not being serviced and which were in negative equity. These loans required close management and for

a long time customers and banks were in a difficult position where there was a substantial lack of liquidity, no market for property and limited scope to resolve the challenges. Now the position for those banks is resolved.

The banks, in having divested of these loans and personal guarantees, are now in the position where they are seeking business opportunities and are much more mindful of the risks and rewards of loans given their recent experiences. The way back for stronger banks, is the same as in any other business, they need to grow, improve their core profitability and margins. That will mean that the negotiations for finance will have different terms and conditions which customers must make sure they understand.

But where does this leave a borrower who now owes the debt to a new lender? This is a departure into uncharted territory for them and the situation provides an entirely different dynamic.

14 BUSINESS MONTH 3 November 2014

The new loan book owner has inherited the history of each loan but has no requirement to have an on-going relationship with the borrower. The agenda is very clearly one of how the loan can be repaid.

The borrower is now in a commercial relationship with the loan book holder. There is no on-going relationship requirement, it is just a matter of how to deal with the debt and in what manner an agreement can be reached.

As in any commercial relationship this is a matter of negotiation and understanding what each party position is and how they can reach an agreement. There are no banking regulations or codes in this new commercial environment and the remedy for both parties is very much contained within the financial constraints of the situation. The loan book holder will have their own relationships with asset management companies and they will have an infrastructure to drive the

process. The borrower may see this as an opportunity to resolve the challenges of his portfolio but it is naive to underestimate the clear purpose and focus of a loan book holder.

While this has replaced the players at the table, the underlying resolution of the problems will still have to be achieved. This, still in many cases, represents a future of tough decisions and the resolution of the problems.

This may be achieved through re-financing, introduction of new capital and other innovative solutions. For some it may still result in forced sales and enforcement of security over assets.

Borrowers need to grapple with their situations based upon the current status regardless of what their circumstances were in the past.

It is still true that we live in interesting times and advisors in the world of restructuring and corporate finance will have a role to play.

ECONOMY WATCH

Mixed The global economy has been sending ica sends out positive signs of a strength‘triple-dip recession’ have been circling as

C

ENTRAL bankers’ words can have a powerful influence on financial markets.

No more so than Mario Draghi’s ‘whatever it takes’ speech on July 26, 2012.

Within the context of renewed fears over a eurozone breakup, the ECB president came out with the now famous words: “The ECB is ready to do whatever it takes to preserve the euro. Believe me it will be enough.”

By merely threatening to implement new policy actions, Draghi restored confidence in the beleaguered eurozone for over two years. Stresses and strains within financial markets eased and subsequently dissipated. The return to financial market calm prompted a series of European leaders to affirm that the worst of the euro crisis was over.

Fast-forward 28 months from Draghi’s speech and the public affirmations look somewhat premature. Concerns surrounding the eurozone have returned, and indeed the eurozone economy is in much worse shape today than it was in the summer of 2012.

Back then, the eurozone was in recession, with Germany one of the few economies still growing. The unemployment rate was 11.3% and consumer price inflation, at 2.4% yearon-year was running above the ECB’s ‘close to but below 2%’ target. The euro also traded at more attractive rates for Eurozone exporters ($1.206 & 77.7p) than the rates prevailing today.

With the public finances, concerns that deficit targets would be missed were confined to the Eurozone periphery. But now, the EU is challenging France and Italy for breaching its new budget rules.

Today the eurozone is flirting with both recession and deflation. The latter prompted the ECB to follow up its words

EUROZONE

Richard Ramsey

Chief economist Ulster Bank with more policy actions in June. These included cutting the ECB’s main lending rate to just 0.05%, one-tenth of the equivalent Bank of England rate. Consumer prices in the Eurozone are barely rising, with Italy, Spain, and Greece experiencing deflation. The eurozone’s unemployment rate has eased from last year’s peak of 12% but is still marginally higher than it was in July 2012.

There has been a steady stream of poor economic data for Germany recently, suggesting the eurozone powerhouse may have re-entered recession.

Next week’s third quarter GDP figures are expected to reveal a contraction in the eurozone economy following a flat reading in the second quarter. Such an outcome will fuel ‘triple-dip recession’ headlines. Whether they appear or not, the challenges facing the eurozone remain severe. Particularly when you consider the lack of economic progress over the last two years.

Whilst European equities have rallied by over 40% —

16 BUSINESS MONTH 3 November 2014

according to the Euro Stoxx index — since Draghi’s landmark speech, the Eurozone economy has stagnated. In the two years to the second quarter of 2014, the eurozone economy has grown by just 0.1%. This compares with 4.9% for the UK and 4.4% for the US. Even Germany has expanded by just 1.3% during the last two years. The French economy has averaged growth of just 0.4% p.a., with the same pedestrian growth rate anticipated for 2014. The plight of Italy is even more worrying. The eurozone’s third largest economy has contracted by 3% since Draghi’s speech and is a staggering 10% smaller than it was before the recession began.

The outlook for the eurozone is worrying when you consider the deteriorating economic conditions in its core economies. German exports plunged in August by the largest amount since the peak of the financial crisis — and more timely surveys for business activity and confidence have pointed to a further slowdown.

This has prompted Germany to slash its official forecasts for economic growth in 2014 and 2015 to just 1.2%. A slowdown in China, the crisis in the Ukraine and sanctions imposed on Russia are impacting on German order books.

A series of large German exporters including: Siemens, Volkswagen, Fendt (the tractor manufacturer) and MAN (the truck manufacturer) are all reporting a decline in demand from Eastern Europe in Q4.

After years of near-record low unemployment, Germany is now facing job losses.

Draghi’s soothing words bought European leaders precious time to implement much-needed reform. However, this time has largely been squandered. Now, with austerity fatigue widespread and anti-EU sentiment rising, the political will to implement unpopular policies is largely absent in Europe. Lack of reform, however, will not compensate for a lack of demand, which is behind the twin challenges of recession and deflation.

The reality is the ECB and leaders of the three largest economies, and founding EU members, must implement policies politically unpopular but economically necessary.

To date, their approach has followed the spirit of the Meat Loaf song ‘I will do anything for EU but I won’t do that’.

The ‘that’ has meant different things. In France and Italy it has been economic, labour market and public sector reforms. In Germany, it’s providing a sufficient fiscal stimulus for the eurozone, borrowing to invest in infrastructure and allowing the ECB to engage in full-blown quantitative easing (like other central banks). The periphery did what it had to do, now the core has to follow suit. ‘Whatever it takes’ actions will speak much louder than ‘whatever it takes’ words.

ECONOMY WATCH

picture conflicting messages of late. While Amerening dollar, in the eurozone rumours of a some of its big nations struggle again

G

LOBAL financial markets have had a turbulent month, with a sharp decline in the value of the majority of risk assets and an accompanying plunge in government bond yields. The main reason for the increase in market volatility has been anxiety around the upcoming end to quantitative easing (QE) in the US together with a string of recent weak growth and inflation data points.

The global economic picture remains mixed: the US economy appears to be in good shape but major emerging market economies, notably China, have seen disappointing figures. Europe continues to look very weak and now potentially faces the dual threat of deflation and recession.

Looking more closely at the US economy, it has been impacted by a number of exogenous factors of varying magnitude. The trade-weighted US dollar has strengthened 7% since the lows seen in Q2 (and 6% vs. GBP), US equity markets have declined almost 10% over the past month, and global growth forecasts continue to be pared back.

Most positively, crude oil has fallen $25 from recent highs and mortgage rates, priced from the benchmark of the 30 year Treasury rate, have declined to below 3%.

Perhaps the most positive segment of the US economy in the past 12 months has been the jobs market. Employment growth has averaged in excess of 200,000 jobs per month over the last year with the unemployment rate now below 6%.

Interestingly, despite tightening conditions in the jobs market, inflation has remained relatively stable c.1.5-2%. Our economists consider that these factors, coupled with industrial production and services data over the past quarter,

USA

Mona Shaker Barclays

continue to suggest 3% growth for the US economy remains intact.

One recent data report which surprised many economists, was September US retail sales (falling 0.3% month on month). However, our research analysts believe that consumers are set to benefit from a new source of spending power namely the aforementioned falling oil price.

Retail petrol prices have already dropped more than 50 cents per gallon (c.14%) since the end of June and the oil futures market suggests that retail prices are set to continue to decline. Spending on petrol compromises about 3% of overall US consumer spending and the recent drop in prices at the pump will have boosted real consumer income growth by 0.6%. The US consumer has long provided a bulwark against the impact of slower overseas growth — consumer makes up some 70% of US GDP. In the late 1990s, the decline in energy prices associated with weak global growth during the

Asian financial crisis was a key factor in driving US consumer spending and strong relative GDP growth.

If US consumers spend the additional income they save on petrol, this would mean a boost of roughly 0.4% to real GDP growth, more than offsetting the negative effects of the roughly 0.2% drag from the strengthening dollar. The near-term effects are likely to be considerably more beneficial for the domestic economy as there are relatively long lags in the speed at which currency moves affect real GDP growth, but the transmission from lower energy prices to stronger consumer spending is relatively quick. Given US consumers do not save much of their income, a boost to income growth translates relatively rapidly into stronger real consumer spending. US consumers are unlikely to spend much time pondering whether the ECB will provide further monetary easing or how much the Chinese property market will slow. US retailers can expect a

solid Thanksgiving and Christmas holiday period.

With the domestic economy making steady progress toward the Federal Reserves dual mandate of stable inflation and maximum employment, it is not clear to our economists how the Fed will respond in an environment in which the global economy, particularly Europe, is lagging and risk assets begin to underperform.

Notably, every time the Fed has previously tried to exit its QE programme, risk assets have taken a turn for the worse notably in summer 2011 with the end of QE2 — US equities declined in excess of 15% through that period. The pattern over the past month looks somewhat similar, despite the much healthier US economy.

How much do risk assets need to fall and/or inflation/ growth expectations continue to decline before the Fed responds? As the September Fed minutes noted, all but two participants indicated that the Fed should start the interest rate hiking cycle in 2015, even though all but one believed that inflation would remain below 2% in 2015. Comments from Fed members over the past week suggest some concern over slowing global growth and domestic inflation and expectations for a US, and UK, interest rate increase have now been pushed well out into the second half of 2015, and any increase in interest rates is likely to be at a very slow pace.

Over the past year, out with a weather-related Q1 slowdown, the US economy has displayed impressively robust growth together with benign inflation and improving employment metrics. This compares very favourably with the majority of the major global economies.

This coupled with continuing easy monetary policy should see the recent trend of a strengthening dollar may be

3 November 2014 BUSINESS MONTH 17

COVER STORY

POSITIVE OUTPUT The planned closure of JTI Gallaher’s shows our manufacturing industry struggles to compete with low wages and overheads in other countries, but forecasts for the sector remain upbeat, writes Paul Gosling

18 BUSINESS MONTH 3 November 2014

T

HE potential closure of the JTI cigarette factory in Ballymena, with the loss of nearly 900 jobs, is a warning shot for the whole of Northern Ireland. Nor is JTI alone.

Northern Ireland’s three largest manufactured goods businesses as listed in the Belfast Telegraph’s Top 100 Companies of 2014 — Bombardier, Caterpillar and Aventas/Quinn — have all contracted in recent times.

In September, Bombardier — Northern Ireland’s third largest business — announced it will reduce its workforce by around 400. Two years ago Caterpillar — the 10th biggest company in Northern Ireland, formerly known as FG Wilson — laid off 920 workers in Larne. (It has since taken on about 300 staff in Belfast and Larne, supported by grants from Invest NI.) And Quinn’s manufacturing business — now known as Aventas — is currently being broken up, with the radiator, cement and

Setting sail in another direction: the lessons of H&W w The last ship to sail out of Harland & Wolff was the MV Anvil Point, which left in 2003. w Ironically, it was owned by a consortium including the Bibby Line company, which owned the Venetian, the very first ship built by Harland & Wolff in 1860. w With the decline in shipbuilding, in 2005 the company began a diversification strategy, using all the knowledge and skills it had learned from the historic trade to target new types of business. w Harland & Wolff has now repositioned itself in the manufacture and refurbishment of renewable energy and offshore facilities, with skilled staff and unrivalled workspace — including the biggest dry dock in western Europe and massive gantry cranes Samson and Goliath — making the firm an ideal base for the construction of mammoth installations. w One of its first renewables projects was an off-shore wind farm of 30 large wind turbines that are now installed off the Cumbrian coast in the Irish Sea. w Other schemes have included a 60-turbine offshore wind farm off the south west coast of Scotland, a 3,000-tonne under-sea structure

glass manufacturing operations being sold separately.

Manufacturing, the figures suggest, is of declining importance to Northern Ireland.

As recently as 1995, manufacturing generated 15% of Northern Ireland jobs. Today it is about 10%. The obvious explanation is that Northern Ireland is simply unable to be price competitive. While JTI’s pay for factory workers in Ballymena, according to the Irish Congress of Trade Unions, is £40,000 to £50,000 a year, pay in the tobacco industry in Romania (where some of the manufacturing is transferring) is less than £10,000 a year.

For large manufacturers, electricity prices in Northern Ireland are significantly higher than in most of Europe, according to market analysis undertaken by the Utility Regulator. Only Italy charges more for electricity to large customers, with Northern Ireland more expensive than

the rest of the UK. Large manufacturers in Sweden, Finland and France can buy electricity for about half the price prevailing in Northern Ireland.

Those located in the Republic have a 20% electricity price advantage over the North.

In addition, companies here face other additional costs.

Corporation tax in the UK is 21%, compared to 12.5% in the Republic. And distribution is likely to be significantly more expensive from Northern Ireland to most large markets.

Even water is more expensive here.

Quite simply, Northern Ireland has ceased to be a low cost centre of production.

Many of these cost factors hit not just Northern Ireland, but the whole of the UK. One major Indian company — Apollo Tyres — complained recently: “It’s far more expensive.... The UK, as far as manufacturing is concerned, is not lucrative at all.”

Stephen Kelly of Manu-

off the north German coast, a prototype tidal energy generator, a w Marine turbine unit now being used in Strangford Lough and a tidal turbine in the Orkneys. w And it isn’t just renewables. w In 2012 one thousand workers helped complete a one-month project on the SeaRose “floating production, storage and offloading vessel” for the Canadian oil firm Husky Energy. w That work helped secure the multi-million pound Blackford Dolphin contract. The colossal oil rig, which was supposed to be in the city for just 60 days for a refit, was with Harland & Wolff for six months after structural defects were discovered once the structure was out of the water. w Hundreds of workers toiled around the clock on what became the city’s ‘unofficial Christmas tree’. w And in a sign of further developments to come, in May, Harland and Wolff performed the world’s heaviest water load test. The massive Samson gantry crane lifted a 774-tonne load.

CLARE WEIR

facturing NI warns that the cost and profit pressures facing JTI apply to other manufacturers also considering whether their next major investments should be here or elsewhere. “JTI.... are essentially deciding that, in the medium and long term, to invest in the Ballymena plant (for) new production lines does not stack up given the costs of manufacturing in Northern Ireland,” he said. “There are other major employers in north Antrim and across Northern Ireland which need similar investment in production lines.”

Mr Kelly is calling on the Executive to tackle the issue of costs, which is damaging Northern Ireland’s productive capacity. “The issue isn’t one of demand, it’s one of cost and we must address this as a matter of urgency,” he said.

While electricity is the major factor in those cost disadvantages, there are others as well, he said. “Our water

company is 30% less efficient than benchmarked companies in Great Britain and the inevitable transport costs of getting raw materials to and finished products from here adds an additional burden.”

Yet despite all these cost challenges, it is misleading to paint a wholly negative picture. Economist John Simpson said: “Although we talk about manufacturing employment as falling, manufacturing outputs are still increasing. They are increasing at about 2% per annum, which is what you would expect and that is reassuring. The short answer is that if output is still increasing and if we are doing that with fewer people employed, then we should not worry.”

Moreover, the official figures do not necessarily tell an accurate story. Professor Neil Gibson, director of the North-

>> Turn to page 20

3 November 2014 BUSINESS MONTH 19

COVER STORY >> Continued from page 19 ern Ireland Centre for Economic Policy (NICEP) at the University of Ulster, points out that the scale of outsourcing by manufacturing companies has had the effect of recategorising many support jobs from the manufacturing to the service sector. “Many workers in professional services — including agency workers — will actually be in factories, or at least serving factories,” he said.

“Certain industry will always remain, food processing for example, but Northern Ireland has strengths in aerospace, heavy machinery, pharma too. Industry associated with recycling is also a growing area. Whilst other locations do out-compete on cost, there are many firms looking at coming back to US or UK shores. Costs are rising elsewhere and there are other risk factors that make many other markets less attractive than their cost base might suggest.

“Big factories are still a part of the industrial future, though it is true that smaller production is becoming more commonplace. We worry about a 500 job factory closure, but if we lost 100 five-people business it would be just as bad — it just would not make the news. Look at the world leading UK car plants or some of the big pharma plants in Ireland to see that the modern ‘big factories’ still have a place in the developed wealthy world.”

Overwhelmingly, the big job announcements recently have been in the services sector in Belfast, in particular with accountancy and law firms. While the jobs are good news, it is important to have a diverse economy, Prof Gibson said. “We do need a variation in our sectoral mix: our skills base demands it as not everyone can work in an office,” he said. “Also factories are better suited outside of cities for the most part and this is also helpful from a policy perspective.”

The latest economic forecasts from NICEP predict continued growth in Northern Ireland’s manufacturing output. Strengths, says Prof Gibson, are the sterling currency, an appropriately skilled workforce for some manufacturing activities, legal certainty, property and IP protection, competitive skilled wage rates

Caterpillar, formerly FG Wilson, laid off 920 workers in 2012 and low staff turnover rates.

In addition, there are the financial incentives of industrial de-rating and Invest NI’s employment support grants.

On the down side are energy costs, lack of local energy supply (without fracking), key skill shortages and the potential impact of changing state aid rules.

Angela McGowan, chief economist at Danske Bank, is also positive about the sector.

“One of the key lessons learnt during the economic crisis was that economies with a healthy manufacturing base were the first to emerge from the crisis,” she said. “Our local manufacturing base is fairly precious to us in Northern Ireland. This element of the private sector is responsible for employing over 80,000 people — 10% of the local labour force — and represents nearly 15% of local GDP. “The short term strategy for local manufacturing firms during the financial crisis involved cutting costs, raising

20 BUSINESS MONTH 3 November 2014

productivity from their current workforce and seeking export markets further afield. In the longer term, the survival of our manufacturing base will be dependent on a number of things, such as technology, ability to innovate and operate in a globally competitive environment and, of course, access to skills.”

Ms McGowan said: “Northern Ireland cannot compete when it comes to low value-added traditional manufacturing – this type of production has long shifted to low-cost economies.” Despite this, Danske Bank forecasts local manufacturing output to significantly outperform the wider economy — projecting 4.4% growth for manufacturing this year, compared to average growth of 2.5%. But with manufacturing output resting on improved technological based productivity improvements, employment growth in manufacturing is projected at just 2.5%.

Bank of Ireland UK economist Alan Bridle is also upbeat.

“It is too soon to be writing the obituaries for the sector — indeed, the irony of the recent JTI announcement is that it comes at a time when the latest data suggests Northern Ireland manufacturing is outperforming the UK average with annual growth in output of almost 6%, led by engineering, metal products, chemical and pharmaceutical companies,” he said.

“The rebalancing of the Northern Ireland economy debate is too often defined in narrow terms of public/private sector. In reality, if the local economy is ever to achieve the ‘escape velocity’ we aspire to of more higher productivity/higher wage businesses, the balance within the private sector merits closer consideration and policy support, particularly in terms of taxation and energy costs where quite often, a local operation faces internal competition from another plant somewhere else in the world.

“The retention and growth of our manufacturing sector is therefore critical as it remains the key driver of the region’s GVA (gross value added) performance and wealth creation, research and development investment and export base. The overarching challenge is one of scale — we have some notable world class business performers in Northern Ireland, but they are numbered in the hundreds and not the thousands.

“In my view, the future for the Northern Ireland manufacturing sector is challenging but not daunting — our successful businesses will be those with strong and ambitious leaders who compete on quality and value, not price. It has been evident for decades now that any competitive advantage we may have had from relatively low wages is rapidly diminishing — the future is one of playing in markets and niches we can compete in, both in terms of the quality of our products and after-service that generate repeat business. Competitive wage rates of course will remain part of the equation.”

Dr Esmond Birnie, PwC’s chief economist, is in no doubt that it is important for Northern Ireland to remain a manufacturing economy. He said: “The important thing about manufacturing is that manufactured products still outweigh services in world

COVER STORY trade in terms of volume of activity. So, if you are a trading economy like the UK and trying to pay for imports it is important to retain market share in world trade in manufacturing.

“There may also be some distributional consequences which flow from the strength or otherwise of manufacturing.

In percentage terms, manufacturing makes up only a small share of the economy in the South East of England and London whereas it is proportionally more important in the Midlands and the north of England and Northern Ireland, Scotland and Wales, so manufacturing matters from the point of view of greater regional balance within the UK. “Similarly, some commentators now fear that the income distribution is undergoing an hour-glass effect, i.e. fewer middle income jobs compared to more at the very top or very bottom of the distribution.

Manufacturing, more so than many service activities, may produce more jobs in the middle.”

Dr Birnie believes that

re-shoring — bringing back offshored jobs closer to companies’ head offices and nearer to their primary markets — provides major opportunities for Northern Ireland. “In March 2014 PwC forecast that such re-shoring could add 100,000 to 200,000 extra manufacturing jobs by the mid 2020s at the UK level,” he says. “Pro rata, that would imply significant gains to NI.” Perhaps 12,500 jobs could be created in Northern Ireland over the next decade if the UK as a whole has a clearer industrial strategy, suggests the CBI. That strategy would be built on a greater focus on exporting, re-shoring and strengthened supply chains, including through industrial clusters.

Nigel Smyth, director of CBI NI, says that NI’s STEM (science, technology, engineering and maths) strategy and its innovation strategy “arguably” puts NI “ahead of the game in some areas”. He adds that the key is maximising the skills, knowledge and productivity available in NI. “There is a place for higher value added.

We have done a lot of work with

highly skilled businesses. The key companies — eight, 10, 12 medium to large manufacturing companies — are all going out and doing most of their business outside Northern Ireland. And that has accelerated over the last four or five years.

“There is a lot of growth in medium sized companies,” added Mr Smyth. He praises, especially, some companies in the engineering, IT and pharma sectors. “Most of them have links with universities and further education colleges,” he said. “That is where you see the fastest growth at the moment.”

The Northern Ireland Science Park is also central to the efforts at modernising our manufacturing sector. Dr Norman Apsley, chief executive of the NI Science Park, said: “The shape of manufacturing in Northern Ireland has changed and is changing again, from the big structures of the past — ships, cars, planes — to finer, more advanced engineering-based processes.

Advanced manufacturing and engineering is the bedrock of the regional economy, supply-

ing the materials and composites necessary to the evolving manufacture of products.”

Dr Apsley believes that while advanced manufacturing is responsible for growth in manufacturing sales and exports, it could achieve even more. “Despite the prevalence of manufacturing companies, it is acknowledged that this sector is not achieving its full potential,” he argues. “The under-development of the regional advanced manufacturing sector can largely be attributed to a lack of awareness of advanced manufacturing as an enabling technology and the failure of the regional manufacturing sector to develop new technologies and skills in line with the rest of Europe.

It seems, then, that Northern Ireland can have a future as well as a past as a manufacturing economy, even though it may not either employ the numbers of people or perhaps pay the high wages of the past.

If we focus on what we can do well, rather than just producing things cheaply, Northern Ireland might return to something like its glory days.

3 November 2014 BUSINESS MONTH 21

NEWS ANALYSIS

Rise of crowdfunding Alan Watts explores how venture capitalists are faring in a new era

C

ROWDFUNDING is magic. You have this idea for a product but no means to bring it to reality.

And then a group of people you’ve never met give you money and just hope ‘fingers crossed’ that you might someday send them the product.

It seems too good to be true, but at just under £1bn contributed in the UK alone in 2013, the magic clearly seems to be working for some people.

Crowdfunding is a relatively new phenomenon but it is here to stay. And it’s shaking up the investment scene as you might expect. But how is it affecting those bastions of investment — the venture capitalists?

The poor old VCs have been going through a hard decade when many of them have not provided good returns to their own investors. But without a history of returns, the VCs are unlikely to be able to raise more funds. However, the best VCs continue to do well and have scored a few spectacular successes like Google, LinkedIn and Facebook.

But how have they adapted to the brash new kid on the block? Are they following the crowds and piling their VC money into the products where the masses have gone before?

Figures are starting to appear now from the USA to show just what their VCs are doing. Data from Crunchbase shows that over 400 projects received funding of $100,000 (£62,000) or more from crowdfunding websites Kickstarter and Indiegogo — and approximately a quarter of these went on to raise VC money. Actually quite a lot of money as it totalled over $500m (£312m).

The biggest category here was games, including audio which took about a third of the money. But wearable and home products were also big.

So it’s pretty clear that crowdfunding is affecting

Bank of Ireland’s Julie-Ann O’Hare congratulates Sean and Leona McAllister (r) of Plotbox, NISP’s INVENT winner VC-land and probably acting as a very useful pipeline and indicator for these professional investors. Or to put it another way, the investors are using crowdfunding success to vet hardware start-ups.

However, when you delve deeper into the figures it’s possible to get an idea of what is really getting the VCs excited.

Instead of just looking at the overall amounts, if you look at the multiple of VC money to crowdfunding money another picture emerges.

Thus for every dollar the crowd put into products you

22 BUSINESS MONTH 3 November 2014

wear on your body or your clothes, the VCs put in 11. Since the average across all products was $2.71 of VC for every crowd dollar, you can see that onbody products is a hot spot.

Conversely, we hear a lot in the press about 3D printing and it took in a lot of money from the crowd (£16m) but this was almost 1 for 1 with what the VCs put in. So fine, but VCs are clearly not as excited by it.

So a picture emerges of certain niches where the professional VC investors think the crowd is very right. One interpretation of this is to say that

the crowd back what people want today. However perhaps the professional crowd are looking past this and believe they can see what people will want tomorrow.

It seems like the flock are leading the way and that the few are following their lead before concentrating on the juiciest pickings.

Or the shepherd is leading from the back?

Alan Watts is the director of Halo, the Northern Ireland Business Angel Network. Halo is based at the Northen Ireland Science Park

23

BREAKING THE MOULD

A web of opportunity

DisplayNote’s Paul Brown, which specialises in presentation and collaboration software, gives an insight into his vision for the future Name: Paul Brown Company: chief executive of DisplayNote, one of a number of Northern Ireland companies travelling to this month’s Dublin Web Summit I got into a technology business because....

Well, I suppose part of the blame for my career must rest with my father who had his own insurance business. It started in the mid 1980s with my dad purchasing a Wang computer for quite a few thousand pounds. I think it had 4000 bytes of memory.

I saw ways in which technology was helping my father’s business. It was clear that technology provided a way to help people manage data but more importantly, it also enabled people to learn, develop and communicate. From the early part of my career, I wanted to use technology in my day-today working.

I remember being in India in 1996 (which seems like only a few years ago) and having to write out customer visit reports, then battle through traffic to find a local trader who provided international fax facilities, then having to confirm that the report was received back in Antrim. I wanted to use a computer and email but it was just ‘not company policy’. I guess they just had to work this way.

Since then my career has been focused more within the educational technology sector, where I have been passionate about exploring ways in which technology can be used to enhance the learning process.

I didn’t always do this...

I had various jobs throughout university, from Chinese delivery driver to a Big Mac burger boy. Although I don’t often use these skills in my current role, the jobs did help instil in me a hard working attitude.

After university, my career allowed me to travel extensively, working and living in India, Italy, USA and Singapore, the

Paul Brown, chief executive of Northern Ireland tech start-up company DisplayNote latter being cut short by the beating of my heart for a girl back home.

The appeal of international business has always been important to me, knowing that technology has no borders. Fortunately, the return home from Singapore was the right choice but it did take me a while to convince the girl to marry me.

The best thing about my work is...

The dedication of working in a tech start-up creates a great atmosphere. Everyone has great ideas, everyone is fully committed and we are all push-

24 BUSINESS MONTH 3 November 2014

ing for the same goals.

The person I take inspiration from...

It’s funny when I sat down to think about this, my first thought was toward some historic figure, the Edmund Hillary type who strives to achieve a goal or ambition regardless of the scale of the challenge.

However, it has never really been in my character to take inspiration from any particular character. I believe that is the nature of an entrepreneurial spirit, to not follow in the footsteps of others, and as Hillary

said himself, “no-one remembers who climbed Everest second”. . In our business, our customers always inspire us to make things better.

My advice to anyone starting out in technology...

Be clear on who they are developing for. Do the things that people don’t think you can do, and make sure you find the right people to go on the journey with you.

And I suppose like Hillary, (who I said does not inspire me... I lied) find your Sherpa Tenzing.

AND I’LL TELL YOU ANOTHER THING...

Hard graft pays off Les McCracken, of award-winning refurbishment and fit-out company McCue Crafted Fit, shares some secrets of his success Name: Les McCracken Company: Managing director of McCue Crafted Fit My first job was....

A summer job when I was 15 years old, which is still fresh in my memory. I worked for a local farmer near Ballymoney.

I had to leave home at 6.30am every day, then cycle a few miles to get to work. I benefited from plenty of ‘hard graft’ until 7pm at night for six days a week earning the princely sum of £10. It was hard work but I still believe that the lessons I learned were invaluable.

The person who taught me to succeed was...

Myself — I have always been hard working with a particular attention to detail. When I set my mind on any project I believe true success comes when you see it completed to a high standard.

I also think that these values and success factors have translated into part of what McCue Crafted Fit has become today.

We pride ourselves in high quality results for every client or brand we work with.

My business mantra is....

Believe and be honest to yourself and others. If you have belief in the products or services you are offering to customers through your business alongside good, honest communication with employees and clients — this is the basis of a positive business mantra.

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

I’ve been in this industry 36 years and I wonder how any of us could imagine life without a mobile or email. A lot of our work is based outside Northern Ireland, in the UK and further afield so it is essential that I am able to link up with the teams working on projects on a daily basis.

From an industry perspective, McCue has changed a lot over the years too. This year marks our 60th anniversary in busi-

Les McCracken, managing director of McCue Crafted Fit, has been in the industry for 36 years ness, which is great achievement for a Carrickfergus firm.

Our first ever project was making wooden boxes for linen over 60 years ago and today we are working with a range of premium global brands including Urban Outfitters, Hamleys toy store, Hugo Boss, The Savoy and Berkeley Hotel in London.

For me it’s also important never to forget the company’s roots so that’s why we continue to work with really exciting projects right here at home in Northern Ireland. The hospitality, retail and office scenes

26 BUSINESS MONTH 3 November 2014

especially have never been more in tune with what customers want so we have been able to offer our own creative insight with local names like Shiro, The Albany, Eason’s and Chain Reaction Cycles.

In 10 years the world will...

Be crazier than it is now, naturally. I also think this is a really exciting time for McCue given our recent growth in new markets so I would say the best is definitely yet to come.

My one business regret is....

Probably holding back sometimes but I am very lucky to have a great team in place who are committed to driving the business forwards at home and in new markets.

My one piece of business advice is....

Read this and think about it.

“You cannot do it all yourself – depend on others and lead.”

I couldn’t start the day without....

Waking up and smelling the coffee — it certainly puts a lot of things in perspective.

SME WATCH

S A top team Amanda Ferguson talks to top physiotherapist Simon Harland about the driving force behind his new sports clinic in Northern Ireland

Fighting fit: physiotherapist Simon Harland

28 BUSINESS MONTH 3 November 2014

PORTS physio Simon Harland is bringing his expertise back home with his RE:PLAY high performance sports physiotherapy clinic in Bedford Street, Belfast.

Mr Harland, a highly regarded specialist, returned to Northern Ireland earlier this year after four years with Arsenal Football Club.

The 40-year-old physiotherapist and entrepreneur from Whitehead, Co Antrim, has more than 20 years experience treating the public and professional athletes, including previous work for Irish Rugby, Ulster Rugby and Irish Cricket, among others.

Mr Harland told Business Month he moved home to set up the clinic after spotting a gap in the market for a high performance physiotherapy service, his desire for a new challenge and to spend more time with his wife and their two young children.

Educated at Belfast Royal Academy, the University of Brighton and the University of Ulster at Jordanstown, he brings a wealth of experience and specialist expertise to Belfast.

He enjoyed four years with the Gunners’ first team, treating players like David Beckham, Robin van Persie, Thierry Henry, Jack Whilshere and Theo Walcott.

“I went over the Arsenal in 2010,” he said. “I was number two, the head guy Colin Lewin has been there since day dot.

“Arsenal has quite a small backroom staff compared to some of the other premiership teams.”

“I was quite lucky to get away on pre-season trips.

The tours were unbelievable, visiting every country for a few days and off you go again.

“In last couple of years, it has got a lot more commercial, so the bigger name teams — Man City, Man United, Arsenal, Chelsea — get further afield, so we headed off to China, Hong King, Malaysia and Vietnam.”

A physiotherapy career has certainly taken Mr Harland all over the world.

“I have been really lucky

being involved in Irish Sailing and Irish Athletics, and especially with Irish Cricket.

“I have been to Africa, Zimbabwe, Sri Lanka, all over the States, Canada, all around Europe, Far East, Australia and New Zealand,” he said.

“If you are a sports physio it sounds magic but you don’t see a huge amount when you are there. You are seeing training grounds and stadiums and hotels, but the odd time you get the chance to get out.”

But to explain what brought him home to Northern Ireland, Mr Harland said: “The job is magic but you don’t have any other life outside of work.

“Working in professional sport is massively intense,” he added. “You probably average a day-and-a-half off a month, if you are lucky.

“I want to do other things and at home there is definitely the opportunity to get a proper sports physio clinic up and running. Working in professional sport does make a difference. It is a speciality in its own right.

“If you wake up with a sore back, certainly come and see

Re:Play high performance sports physiotherapy clinic in Belfast me, I won’t turn anyone away, but you are going to get a bit more out of it if you are a tennis player or GAA player with a sore back. The Re:Play team is right up there.”

Indeed, working alongside Mr Harland at Re:Play is renowned physio Phil Glasgow, who heads up the Sports Insti-

tute at the University of Ulster.

“He is a great guy, so knowledgeable, and the list of his involvement in sport is endless,” Mr Harland said.

“We are hoping to go big with cycling-related injuries as Phil is one of only a few people over here who is a registered Retul bike fitter and he has

great experience in the cycling world, including physio consultant to British Cycling.”

Chris Bleakley will also be part of the team, as well as working at the university.

Mr Harland said: “It’s a quality, experienced team.”

Contact RE:PLAY on 028 9543 6363 or visit replayclinic.com

3 November 2014 BUSINESS MONTH 29

ASK ASKTHE THEEXPERTS EXPERTS

WHY are the accountancy rules changing and what does this mean for my business?

FOR accounting periods commencing on or after January 1, 2015, FRS 102 will replace current UK accounting standards for most local companies.

This change is happening in order to bring UK accounting rules closer to international accounting rules.

These changes will affect how company results are calculated and could have significant implications for businesses with loan covenants and these companies will have to plan ahead to ensure that these changes don’t lead them to breach these covenants.

For example, any company with a revaluation reserve will need to recognise deferred tax on upward property revaluations.

This will have an immediate impact on the net asset position of any companies that currently carry a revaluation reserve.

For example, a company with a revaluation reserve of £1m will see its net asset position reduce by circa £200,000 under FRS 102.

This may have consequences for companies with net asset bank covenants.

In addition, probably the most significant change is where goodwill and intangibles can continue to be amortised but the presumed life will be five years unless a reliable estimate of the life of the asset can be made.

Under current UK GAAP an assumed life of up twenty years is currently permitted.

For example, a company will a goodwill cost of £1m may have an annual amortisation of £50,000 under current UK GAAP. This may increase to £200,000 under FRS 102 and will have the impact of reducing reported profits, potentially in breach of bank covenants, and of reducing distributable reserves thus reducing the ability of the company to pay dividends.

BC

Brian Clerkin, Director at ASM Chartered Accountants

Joan Houston Restructuring specialist at Begbies Traynor

Niall McGinnity Director of Nuvem 9 Ltd

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

MY business is profitable, growing and developing, but what I’d like to know is - where is the cash?

WHERE a business is under pressure for its margins, the cash question is more critical than ever.

The business needs cash to keep its suppliers of goods or services support, never mind growth.

We know the clichés: turnover is vanity, profit is sanity and cash is king, but how do we do it?

To grow a business will put it under pressure for cash as the demand for products and services grows.

These must be converted into invoiced sales and debts before the cash is released to fuel the business.

Cash is therefore stretched to achieve growth.

A business has a number of options to raise finance from banks or other funders but it must also manage its resources carefully to make sure that it maximises its opportunities.

Here’s the thing: you can actually manage your cash if you have the right structures in place to control your stock, debtors and suppliers’ terms.

Take time out to look at how you run your business.

Check if you have the best terms and conditions in place for your customers and suppliers.

CASHFLOW is an ongoing concern in my business. How can I get paid more quickly without upsetting my customers?

MOST businesses experience an average two week delay after the invoice due date before payment is received. The first key step is therefore to determine when you need to be paid to ensure you can meet your own supplier payments and other obligations such as payroll and taxes. If you need cash within 30 days consider a 14 day credit period on your invoices to incorporate any delays into your own cashflow.

Providing customers with multiple options to pay is critical. Clearly state your full bank records including international bank numbers and BIC codes if applicable, plus offer credit card and online payments options, such as PayPal and Stripe.

Utilising cloud accountancy packages to issue invoices electronically will allow for “pay now” links to be included on pdf invoices, which give customers the ability to click a link and pay simply and quickly via a web browser. Integration of direct debit options can also now be set-up within minutes via cloud applications.

A common reason for delay is due to an invoice being lost or queried when it reaches your customer. Ensure your invoice is addressed to the person responsible for processing payments in your client company. Email the invoice where possible and ensure that the invoice is complete with tax date, Vat number and a full breakdown of the products or services supplied, and ensure your contact details are clearly stated.

Finally, review your receivables balances regularly and speak to customers early about problematic balances. Effective and prompt engagement with the customer will allow the opportunity for issues to be addressed before they spiral out of control.

NMcG Ask yourself: do you only hold the stock you can sell or need?

When did you last analyse what to do with that old stock to release cash?

Very often, an independent review of your working capital

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

30 BUSINESS MONTH 3 November 2014

management by a restructuring expert can help you to release your cash and provide the necessary funds to accelerate your growth.

It pays to make it work.

JH

INSIDE TICKERS REPORT

WHAT COST REFORM? Northern Ireland will be the region hardest hit by the Westminster Government’s Welfare Bill due to our dependency on benefits - but confusionpersistsonwhattherealcostwillbe,writesPaul Gosling

T

HERE has been enormous confusion about the cost to Northern Ireland of the UK Government’s welfare reforms. While the figure of £750m has been widely quoted, it has become clear in recent weeks that much of that sum relates to changes that have already been implemented.

The £750m figure came from a report— The Impact of Welfare Reform on Northern Ireland — produced by Sheffield Hallam University for the Northern Ireland Council for Voluntary Action (Nicva). It was written by two of the UK’s foremost academic experts on the welfare system, Professor Christina Beatty and Professor Steve Fothergill.

That report painted a bleak picture of the impact of the welfare reforms. It concluded that if all the reforms proposed by the UK Government were implemented in Northern Ireland, they would take £750m out of our economy.

Northern Ireland is the hardest hit part of the UK by the welfare reforms. This is no surprise — we have the highest rates of economic inactivity and claims for benefits linked to incapacity and disability.

In absolute terms, the worst affected UK council district is the Lancashire seaside town of Blackpool, which has specific problems of poverty and young adults living in short-term accommodation. It also has

above average numbers of poor elderly and disabled residents.

Below Blackpool, it is Northern Irish cities and towns that dominate the impact tables.

The second worst affected place in the UK is Londonderry, the third is Strabane, the fourth Belfast, the seventh Limavady, the 15th is Moyle, the 17th is Omagh and the 20th is Newry.

This is out of 405 local authority areas and illustrates Northern Ireland’s high benefit dependency. The loss of household incomes is high.

In the case of Derry, there is an average loss per working age adult of £900 a year.

It needs to be stressed, though, that these figures were calculated on the basis that all the welfare reforms proposed by the UK Government will be implemented in Northern Ireland. Some of those reforms have already been adopted, others have not.

Reforms already agreed and implemented include the use of a cap for housing benefit payments based on average local rents — this was adopted in 2008. Since 2012, single adults under 35 have been entitled to housing benefit at a rate that assumes they share accommodation — whether they do or not. This latest change is taking £55m out of the local economy.

Other changes already implemented include removing child benefit from higher income earners (£80m a year impact), cuts to tax credits (£135m), limiting benefits up-rating to 1%

32 BUSINESS MONTH 3 November 2014

(£120m) and changes to rules on non-dependents (£10m).

These five changes, already implemented, have taken £400m a year out of Northern Ireland’s economy — more than half the total impact of the proposed reforms.

There is another batch of reforms that are gradually being felt, by making entitlement more difficult. The Employment Support Allowance (ESA) was introduced in 2008 in place of incapacity benefit (IB) and all IB claimants in Northern Ireland have now migrated to ESA. Tougher Work Capability Assessments mean that ESA claimants are more likely to lose their entitlements.

In addition, it is proposed that ESA could be time limited for many claimants to one year, but that has not yet been agreed here. Northern Ireland could eventually lose £90m a year from these reforms to IB and ESA, according to the Sheffield Hallam report.

Professor Beatty said: “It is not quite so straight forward to disentangle these two elements from the Northern Ireland data I have. However, in the work we did on Great Britain in Hitting the Poorest Places Hardest, 60% of the total financial loss is due to the time limiting of ESA and 40% is due to other IB measures. So if the same was true in Northern Ireland then approximately £90m pa would be lost due to these measures already underway.”

Other reforms have not yet

Northern Ireland will be hardest been introduced. One of these is the move to universal credit.

A report from the Institute for Fiscal Studies published last year found that 10.9% of Northern Ireland families would lose from its introduction, while 11.4% will gain. People with disabilities are likely to lose through this change, while families with single earners and children will gain, said the IFS. We then have the so-called

hit when the UK Government’s welfare Bill ‘bedroom tax’, which is officially called the spare room subsidy.

This measure limits payments of Housing Benefit to claimants who are considered to have more rooms in their homes than they need. It has previously been adopted for private sector tenancies, but the UK Government has extended it to all tenancies. If this were adopted in Northern Ireland it would have an impact of £20m a year.

But there has been agreement between the Department for Social Development and the UK Treasury that this will not be implemented here for the time being because of the shortage of smaller accommodation units.

The current impasse on welfare reform therefore comes down to the implementation of three specific measures that are outstanding and are included in Stormont’s stalled Welfare Re-

form Bill. One is the adoption of a cap on benefits of £26,000 — seeking to ensure people are better-off in work than on benefits — and the other is the replacement of the Disability Living Allowance by Personal Independence Payments, along with stricter assessments of entitlement. Together these account for £250m of potential cuts, or just one third of the total package of reform cuts.

The third outstanding measure included in the Welfare Reform Bill is the time limiting of ESA payments to some claimants.

In terms of impact, the replacement of DLA by PIP is likely to have the severest impact. A modelling exercise by the Department for Social Development projected that 25% of existing DLA recipients

>> Turn to page 34

3 November 2014 BUSINESS MONTH 33

INSIDE REPORT >> Continued from page 33 will not be entitled to PIP, while 32% will have a reduced entitlement. The next biggest hit from the proposals in the Welfare Reform Bill come from the time limiting of ESA. Given that reforms have been implemented on a gradualised basis since 2008, it is difficult to measure a direct economic impact on Northern Ireland. Moreover, their implementation has coincided with the most severe recession in modern times and the worst property crash in the world.

But we can be certain that the benefit cuts have had effects on consumer spending.

Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association, says that those of his members with more customers on benefits have been harder hit during the recession.

“There’s no doubt about that,” said Mr Roberts. “Consumer spend is down. There were a lot of retail casualties in the recession. Many people on benefits use their local shops.

They are important customers for many of our members, par-

Benefit cuts will have an effect on consumer spending ticularly in urban areas.”

The overall impact of the reforms will continue and is serious. Professors Beatty and

34 BUSINESS MONTH 3 November 2014

Fothergill spelt it out in their report for NICVA. They concluded: “By lowering incomes more than elsewhere, a key ef-

fect of the welfare reforms will be to widen the gap in prosperity between Northern Ireland and the rest of the UK.”

TICKERS

The month’s local indicators at a glance Ulster Bank economist Richard Ramsey gives a rundown on the latest key pointers RECOVERY in UK public finances remains a long way off.

However, the UK’s overall economic recovery has been impressive over the last two years. This has been particularly apparent within the labour market with the UK creating more jobs over the last two years than the rest of the EU put together.

Meanwhile the UK’s unemployment rate has plummeted to 6% which is almost half the rate prevailing in the Eurozone (11.5%). In light of this superior economic performance, the EU has asked the UK for an additional £1.7bn contribution to the EU budget. While many of the economic headlines paint a picture of a robust UK economic recovery, a meaningful recovery in the public finances remains a long way off. Contrary to what was forecast back in the March 2014 Budget, last month revealed that the UK’s

public sector borrowing is rising as opposed to falling, as public expenditure is rising at a faster rate than government revenue.

Meanwhile public expenditure increased by 2.9% over the same period.

Total revenue has increased by just 13% since 2007/08.

However, some sources of tax revenue have outperformed others. Vat revenues over the last 12 months are almost one third higher than in 2007/08.

However, despite record levels

of employment, income tax revenues are just 1.5% higher than 2007/08 levels. Income tax receipts over the last six months are just 0.1% higher than last year. This compares with growth of 5.4% for corporation tax and 3.9% for Vat.

IN recent weeks there has been increasing evidence that a global slowdown is now in train.

Whilst this has negative connotations there are some positives too. Commodity prices have recorded significant falls in recent months, particularly the oil price. Businesses and households will benefit from lower energy and fuel bills going into the winter.

From a UK perspective, it is the price of oil in sterling that matters as opposed to the dollar price. The price of a barrel of Brent crude, which is the European oil benchmark, has fallen from £67.5 in late June to a four-year low of £52.3 last month. This represents a fall of over 22%. Over the same period, UK petrol prices have fallen by less than 4%.

NORTHERN Ireland’s labour market continues to show signs of an ongoing economic recovery.

Employment continues to rise and unemployment continues to fall. According to the latest Quarterly Employment Survey (Q2-2014), Northern Ireland has recorded nine successive quarters of employment growth.

Half of the jobs lost during the downturn have been recouped

during the last two years.

The number of individuals claiming unemployment benefit fell for the 21st month in a row in September.

Northern Ireland’s headline ILO unemployment rate hit a pre-recession record low of 3.2% in the three-months to July 2007. It subsequently peaked at 8.3% in 2011 but currently stands at 6.1%.

36 BUSINESS MONTH 3 November 2014

BUSINESSPEOPLE

The Northern Ireland Businessperson who... ...tasted fame and fortune as an indie band frontman Duffy Rafferty Communications’ Michael Rafferty on singing with Tiberius’ Minnows

E

VER since I was a small child, I loved music.

At risk of giving away my age, I remember my early party piece was ‘Come Back My Love’ by Darts. Nothing to be proud of there.

Through every phase of school right up until A-Level, by which stage I had finally started playing the guitar and writing proper songs, I was regarded as somewhat of a music nut.

As a singer I was continually encouraged to hook up with a class mate who was known as a guitar virtuoso. This culminated in the two of us being asked to provide the music for our final year Mass, which we did by transforming a batch of popular classics into ‘hymns’ by simply replacing the occasional key word with ‘Jesus’.

This memorable service, in which the choir ended up outnumbering the congregation, turned out to be an early incarnation of Tiberius’ Minnows, the band we formed a couple of months later, a decision which was to shape our lives more than we could have imagined.

I was the singer songwriter of the band which quickly built up a strong local following from our first gigs in Dungannon. We all headed off to Belfast, which for a group of lads growing up in Tyrone, may as well have been New York to us. It seemed that all of Tyrone moved to Belfast with us as we were soon packing out shows in the Queen’s Students Union and within a year we had won the prestigious ‘Smithwicks Band of the Year’ competition which was judged by a panel that included Terri Hooley of Good Vibrations fame. A short time later, in March 1991, we released our debut single Time Flies on Terri’s famous Good

Michael (front) in Tiberius’ Minnows in the 1990s- and as he is today (below) Vibes record label.

Time Flies was released only on vinyl and cassette (remember those?) and Terri jetted off to London with a suitcase full of singles to meet with record companies and radio stations.

This resulted in us being played regularly on Radio One by luminaries such as Steve Wright and Dave Lee Travis. Time Flies broke into the Northern Ireland singles chart Top 10 and all of a sudden we were being touted as ‘the next big thing’… the dreaded kiss of

death.

It was all happening so quickly. Our follow-up single Oh June followed Time Flies into the upper echelons of the local charts and we were booked to play at huge festivals such as the Fleadh in Finsbury Park, London, and the ‘Trip to Tipp’ in Thurles, Tipperary, hanging backstage with bands like the Stone Roses and Happy Mondays. Looking back on those heady days, I still think we could have ‘made it big’ but let’s just say

we had some bad advice along the way and made some poor decisions, turning down deals we really should have signed in the hope that the deal of the century would come along.

We weren’t making a living from the band as everything we earned was ploughed into recording and marketing so we collectively decided to go for jobs that would have direct benefits for the band.

Myself and our guitarist Paul were accepted on journalism courses, keyboard player Barry became a teacher while drummer Stevie and bass player Kevin ventured into promotions with local radio stations. Paul then went off to be a sound engineer at a local recording studio while I did a six month placement with a newly-formed PR company called Profile Practice.

That’s when I first met my business partner Lawrence Duffy, who actually turned out to have a Minnows CD in his collection.

I’ve been working with Lawrence ever since — from Profile Practice, through the company’s merger with GCAS Public Relations and ultimately our management buy-out in 2005 that saw us create Duffy Rafferty Communications.

People often ask me if I wish The Minnows had made it big but I have no regrets. Had things worked out differently, I would probably never have met my wife Catherine and wouldn’t be father to two amazing sons Sean and Ethan.

That alone makes everything worthwhile.

I do think that all those years in the band have really helped me in my public relations career and given me a different perspective that I believe has added real value to what I do on a daily basis.

3 November 2014 BUSINESS MONTH 37

FOCUS ON: OFFICE SPACE

ROOM FOR

A lack of top grade office space in Belfast is stifling economic growth, say property agents. And

T

HE Belfast office leasing market is showing signs of recovery but there is still plenty of room for improvement, according to industry experts.

More than 200,000 sq ft of office leasing business was recorded in the first nine months of 2014, with more than half of this activity occurring in the last three-month period alone, said letting agents CBRE. The volume of activity between July and September was almost double the second quarter of the year, with more than 117,000 sq ft of office lettings signed in the city.

But a closer look at the office lettings market reveals that in Belfast city centre, where there is a total rental stock of approximately 9m sq ft, more than 1m sq ft of office space is sitting vacant.

More worryingly, 75% of this stock is non A-Grade accommodation.

Typically, Grade A offices are brand new or recently refurbished properties boasting open plan layouts, raised access flooring, suspended ceilings, air conditioning, lifts, and easy access data connection points.

They are the most sought after commercial properties and can command the highest rental values.

However, agents say that a major lack of Grade A office accommodation in the city is stifling economic growth as expanding firms are finding it increasingly difficult to find suitable properties. And the pipeline of new-build office space is also a cause for concern as more than 630,000 sq ft of office accommodation in Belfast is still awaiting a planning decision, In addition, most of the 1.9m sq ft of office accommodation that has planning permission has not yet reached construction stage.

Indeed, it is estimated that nearly 40% of the total square footage in planning could expire by the end of 2015 and some of the schemes granted planning permission may not be developed due to difficulties in securing funding.

Richard McCaig, a senior surveyor at agents Osborne King, sums up the industry’s dilemma: “There is a lot of talk about businesses coming to Belfast and that’s

38 BUSINESS MONTH 3 November 2014

brilliant but where do we put them? Invest NI announced a lot of jobs over the last 12 months but if someone came along today and said ‘We need 60,000 sq ft of accommodation in Belfast in one building’ they would struggle to find it.”

Referring to the mood in the market, McCaig said: “There has been very limited office movement in general in the wider

There is a lot of talk about businesses coming to Belfast but where do we put them?

Artist’s impression of the proposed City Quays 2 development at Belfast Harbour

EXPANSION firms who want to move here find it hard to get suitable premises., says Simon Rowe signs of recovery and growth in the office market sector.

Accountancy firms Deloitte and EY have announced plans for expansion, with both requiring up to 60,000 sq ft over the next two years.

But the ‘big ticket’ event was Belfast Harbour securing planning permission for a new £20m waterfront office develop-

ment close to the city centre.

The City Quays 2 development is part of a £250m scheme that includes a mix of offices, residential space, retail outlets and a proposed 200-bed hotel.

Belfast Harbour, which owns one of the largest real estate portfolios in the city with around 700 blue-chip multinationals located within the Harbour Estate,

The First and Deputy First Ministers were at the offices of Deloitte earlier this year, when the business services firm announced a major investment. and 300 new jobs. Such expansion by firms in Belfast has increased the pressure on office space and led to claims that there arent’t enough Grade A offices market over the last five years. Everybody has been in recessionary mode. There is nowhere near the same amount of take-up in office space as there was in the pre-recession years 2006-2007, but it has to improve.”

David Wright, a director of CBRE Belfast, says the jobs outlook for Northern Ireland is improving and this will help to buoy the lettings sector.

“We are encouraged by recent job announcements across the region and are

currently aware of at least 30 companies actively searching for Grade A accommodation. This is good news for the city and the economy. ““We have also witnessed an increase in prime rents in the Belfast office market, with prime headline quoting rents now in the order of £14.50 per sq ft.”

But one industry insider said that the majority of city centre rents are still sitting at between £12-£13.50 per square foot, “by far the cheapest within the UK region”.

“Outside Belfast, rents are even cheaper at £8 and £10 per foot,” he said.

It’s an ill wind but property agents have also been kept busy by the growing number of receiverships in the region, offering insolvency firms, banks and financial institutions disposal advice when properties are seized.

However, there have been some significant deals in recent weeks which show

>> Turn to page 40

3 November 2014 BUSINESS MONTH 39

FOCUS ON: OFFICE SPACE >> Continued from page 39 has also received planning permission for a 200,000 sq ft extension of its Sydenham Business Park near George Best City Airport.

The Harbour plans to develop 26 business units for small to medium sized firms on the 90-acre park.

Meanwhile, McConnell Chartered Surveyors is celebrating having negotiated a new 5,000 sq ft office letting at Weavers Court Business Park to American data protection services firm, Proofpoint Inc, which is creating 94 technology jobs in Belfast, in a £6m investment. Weavers Court — located on Linfield Road — is a new-build three storey 20,000 sq ft Grade A office building.

Another significant development in the pipeline is McAleer and Rushe Group’s planned 26-storey, 225,000 sq ft Bedford Square office building on Bedford Street which has been greenlighted by planners.

With developments such as these in the pipeline, the only way is up for office rental market.

First Minister Peter Robinson and Deputy First Minister Martin McGuinness with Paul Terrington, PwC regional chairman. PwC is creating 807 jobs, and is expected to seek Grade A office space in Belfast

40 BUSINESS MONTH 3 November 2014

FOCUS ON: SPONSORSHIP OF THE ARTS

HELPING TO

The arts face government cutbacks, putting numerous events in danger. However, commercial sponsorship could come to the rescue and give the cultural scene a much-needed lift, says Jane Hardy

W

ITH the announcement of significant cutbacks in government arts funding, commercial sponsorship has never been more needed for our cultural scene.

The Arts Council of Northern Ireland faces cuts of over 4% and the Northern Ireland Tourist Board is losing the £1.1m budget that helped finance events like Culture Night — so there is a funding gap that needs to be filled.

Key players in 21st century patronage of the arts are the banks. This month, the Ulster Bank Belfast Festival at Queen’s has brought a wealth of contemporary and classical art, music, theatre and dance to appreciative audiences. In 2008 Ulster Bank in effect saved the Belfast Festival. The initial three-year sponsorship deal was estimated at over £1m and the bank’s annual support is now smaller, but remains a six figure sum.

The question is what the financial institutions get in return, apart from the obvious advertising value. According to Ellvena Graham, head of Ulster Bank Northern Ireland, quite a lot. She said: “We have a long history of supporting community initiatives, including the arts, and derive many benefits which go far beyond brand awareness.

Primarily it’s about creating meaningful connections with our customers, many of whom engage in and value the arts. It is also about highlighting and reinforcing Ulster Bank’s key role in the local economy and society.”

This is virtuous marketing.

Ms Graham added: “Supporting the arts also reflects our social commitment. There are also tangible benefits in terms of employee engagement and development. As part of our involvement in the Ulster Bank Belfast Festival, we have some 30 staff involved in actively promoting the programme of events as volunteers.

“This cross-fertilisation between arts and business helps foster creativity and ideas-development within our workforce.”

She added that this wasn’t just altruism on the bank’s part. “Overall, we sponsor the arts because it makes commercial sense. It’s a mutually beneficial relationship between Ulster Bank and the arts organisations involved.”

Similarly Danske Bank was the main sponsor of the £18.1m capital programme when The Lyric Theatre reopened after a rebuild in 2011 and the bank continues to support the artistic programming and main stage, now known as the Danske Bank Stage.

We sponsor the arts because it makes commercial sense.

It’s a mutually beneficial relationship between Ulster Bank and the arts groups

42 BUSINESS MONTH 3 November 2014

Nicola McCleery, head of marketing at Danske Bank, said: “As a leading local bank, we are keen to celebrate local talent and are delighted to support the local arts through our commercial sponsorships with the Lyric Theatre and the Derry-Londonderry Millennium Forum which we’ve supported since 2010.

“There is no doubting the value of the arts to the local economy, to the local community and to visitors and we’re delighted that we too can play our part.”

For the past six years, Danske Bank has also joined forces with local children’s theatre company, Cahoots NI, on an award-winning show Lights, Camera, Math ’a’ Magic’. This interactive show combines magic with maths in an exhilarating multi-media educational experience which has taught basic financial acumen to 6,671 Northern Irish primary schoolchildren this year.

Naturally funders want to know how effective their sponsorship has been and it is not simply a question of the financial impact. There is also what’s called the social impact to consider — which in the arts may mean outreach programmes and reaching new audiences or the value of performances to the community. Gauge NI is a company that helps organisations measure, evaluate and communicate this, and as business development manager Stephen McGarry said, the results help both funders and funded.

“The question is, if we all rate the arts why is this the first sector to feel the pain of

Tony Wilcox of Danske Bank, Michelle Jackson of V

FILL THE GAP ust volorrum utatiata volenda quia ni alitati ratiumet et vendus dis et voluptas ut ium nihilla quamus duscipis ressequam quassimus.

on of Victoria Square and Victoria Vettesse of Cahoots NI. Danske sponsors Cahoots’ kids’ show, Lights, Camera, Math-a-Magic

the cuts? At Gauge we think it’s about how organisations tell the story of the impact they make.

“Most organisations are very good at measuring outputs, ie, how many people attended a course or got jobs.

“What they struggle more with is the ‘so what?’ question, and it’s our job to take that position. We need to know how what our clients deliver changes the lives, behaviour and attitudes of those individuals and how it benefits their schools, communities and families.

“And if organisations are to survive in the new era of cuts and rationalistion, they need to be able to communicate how much an investment in them generates in economic and social value.”

The company recommends we move towards using the “common outcomes frameworks” when measuring impact to allow funding organisations to make fully informed decisions about where best to invest and provide a level playing field for voluntary and social bodies to access those scarce but vital pots of funding.

The cuts in the Department of Enterprise Trade and Investment/Northern Irish Tourist Board events funding and their impact on Culture Night neatly make the point. Here we can see that the value of grant aid is far outweighed not just by a total return on investment of £2.5m, but in terms of supporting jobs in pubs, developing artists, local tourism, positive attitudes and behaviour.

It’s not always how much you spend in sponsorship but how you spend it that counts. The Bank of Ireland has cleverly deployed a relatively modest amount of money to create a

>> Turn to page 44

3 November 2014 BUSINESS MONTH 43

FOCUS FOCUS ON: ON SPONSORSHIP SPONSORSHIP OF OF THE THE ARTS ARTS >> Continued from page 43 special bursary which supports the classical musicians of the future. In 2005 the bank created the Catherine Judge Award in memory of a valued colleague whose passion was classical music and who died in August of that year.

Since then the bursary, which is worth £5,000, has been presented annually to an exceptional classical soloist who wants to pursue a musical education.

This year it went to Abigail McDonagh, a student at the Young European Strings School of Music in Dublin.

A Bank of Ireland spokeswoman said: “As well as being a lasting and fitting tribute to a former colleague, the Catherine Judge Memorial Award provides an opportunity for musicians who want to take their musical studies to a further level.

“The award also enjoys a profile across the island of Ireland and throws the spotlight on these great musicians, pro-

The Lyric Theatre is one establishment which has benefited from corporate funding viding them with a platform to showcase their talents to a wider audience and we’re proud to facilitate that.”

There is also a prestigious

44 BUSINESS MONTH 3 November 2014

evening event held at Queen’s University when the award is made, usually hosted by Mark Carruthers, which adds lustre.

With further cuts to arts

budgets anticipated, the importance of arts sponsorship can’t be overestimated in keeping the Northern Irish cultural scene vigorous.

OFF LINE SECTION MOTORING

DAY INTHE LIFE

MANABOUTTOWN

MONEY

GRAHAM

THE

MAKER

Volkswagen Passat shows its class

KEDDIE

MD of Belfast International Airport

CHAIRMAN

Inside track on Northern Ireland business

NEW YORK STATE OF MIND

MORE THAN MEETS THE EYE

BUSINESS MONTH 3 November 2014 45

offline

OUT TO LUNCH With Robert J Cooper, CEO, Harland and Wolff Heavy Industries Ltd

Breathing new life into an ailing engineering firm Joris Minne visits James Street South with Robert J Cooper, the head of one of Northern Ireland’s best-known manufacturers, Harland and Wolff Heavy Industries Ltd

R

OBERT J Cooper is a happy man. Twelve years ago he started treating a terminally ill patient and to everyone’s amazement the patient came back to life. Today, the chief executive of Harland and Wolff Heavy Industries Ltd says the patient is in rude health and adds that he couldn’t have done it on his own.

“This was a collective effort,” he says.

“We were at rock bottom, the company had been restructured, we were all emotionally exhausted by the hard decisions taken to save the yard from closure and many of our colleagues were laid off. The firm had reached the end and everyone expected the last rites to be administered.”

But he and his team set about a new diversification strategy, looking for new markets and finding new buyers for a service and skills based on generations of innovation, expertise and hard graft.

“Today, management and the unions work in close collaboration so everyone knows where we are going,” he says.

The 150-year-old Belfast manufacturer has rebuilt its reputation and is globally recognised as a centre of excellence in design engineering and more recently as a leader in the offshore renewable energy sector.

“Our first renewable project was the assembly of a 30-turbine wind farm for an area of

46 BUSINESS MONTH 3 November 2014

the Irish Sea off Barrow and this opened up a whole new market for us,” he says.

We are enjoying a light lunch of turbot and John Dory (and sparkling water — he’s got meetings to go to this afternoon) in James Street South.

H&W has completed two more wind turbine arrays plus a number of offshore transformer platforms. It is now manufacturing a revolutionary foundation system for offshore turbine supports.

The business operates on two sites in Queen’s Island. The repair dock at the tip of the peninsula, just beyond the Northern Ireland Science Park is busier than ever taking in fast-turnaround ship repair and conversion contracts. Two years ago the Canadian energy company Husky appointed H&W to undertake a massive refurbishment programme for the Searose, one of the world’s largest floating production, storage and offloading vessels.

More recently the Blackford Dolphin drill platform dominated the city skyline as H&W worked round the clock to complete another major overhaul and partial rebuild in the main building dock, home to Samson and Goliath.

But it’s the offshore renewable energy business in which H&W has led the way.

Was it tough turning a seemingly dying engineering company into a streamlined, specialist skilled business?

“Of course it was very hard and when you

look at what we were in 2002 to what we are now, I’m not sure we could have imagined this degree of success. We have the skills and the commitment and have always believed that the ship yard could be not only profitable but also a leader,” says Mr Cooper. “We have been at the forefront of the development of new technologies in this sector and I am confident that the future will see further growth in this business.” Mr Cooper says the company’s success also owes much to the business environment. “Northern Ireland is a good place for business: nowhere is perfect – energy prices here are high and transport costs are a factor, too. Yet we are competitive because we have the right people.

23 James Street South Smoked eel Wood pigeon John Dory Turbot Champ Chips Lge Sp water x 2 Diet Coke x 2 Double espresso x 2 Total

7.50 8.50 19.00 19.50 3.50 3.50 9.00 4.40 5.30 80.20

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STREETVIEW

Streetview No. 50: Ballydougan Pottery Ron McBride

S

EVEN generations ago the Huguenot Gasgoine family set up their linen business a short distance from Gilford.

Today their once-derelict middle class merchant house and linen-grading barn form the core of a cluster of four micro businesses-owned and run

by Master Potter Sean O’Dowd and his wife Marie. Sean grew up on a nearby farm and was inspired by pottery classes in his teenage days to the extent that he developed a small business on his farm. In the mid-1980s his main outlet was wholesale supply to the booming trade in Dublin. A decade later the derelict neighbouring farm with its historic Grade II listed house was bought and refurbished.

Visitors will discover a distinctive cluster of buildings which have maintained their rural Ulster heritage. Distinctive thatching and retention of the sloping floor in the restau-

rant (former linen barn) exemplify sympathetic restoration.

On entry to the old house and pottery showroom most will initially ignore the stairway to the left and investigate the displays of pottery and gifts.

The nature of the building is good for pottering (!) with various nooks and crannies displaying glassware, jewellery, candles, and lamps alongside stoneware ‘functional pottery’.

There is access to the coffee room by a door to the courtyard or by a corridor with various displays including imported pottery from Italy in the form of richly coloured tiles. Serving home-produced food, the 120-seater restaurant itself has waitress service.

Over the years the business has grown organically, with the advantage of the various sections supporting one another

as trade varies seasonally or inevitably changes with the impact of the recession. Nineteen staff work in the complex today with the business winning various awards in the fields of hospitality, best restaurant and best rural business. Ballydougan’s success is partly due to it becoming a destination experience as people, often in groups, can easily spend a morning or afternoon.

Eating in the restaurant, using their pottery or staying in the cottages using their food, not to mention purchasing their pottery creates a strong mutual support for the component strands of the business.

Anyone wishing to visit a pottery with a sense of rural heritage and in pleasant surroundings should find Ballydougan interesting. They may even sign up for a pottery class.

Ballydougan Pottery 177 Plantation Road Gilford 02838342201

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DAY IN THE LIFE

‘Developing new routes to key markets is the most important item on our agenda’ Graham Keddie

Managing director of Belfast International Airport

7am

Having just moved to Belfast two months ago to take up the position as managing director of Belfast International Airport, I am still living out of suitcase. My wife and I are in the process of buying a house and I hope that she will be able to move here before Christmas. So as it stands my morning routine is to get up, grab some breakfast and head to the airport to start the day.

I am trying to get used to the Northern Ireland weather having worked in the Middle East for so many years. Saying that I am originally from Aberdeen so it shouldn’t take me too long.

9am

On arrival at the office I normally catch up with my PA, Patricia, to go over the appointments for the day ahead — she runs a tight ship and keeps me very organised.

I have just started the job so there are lots of people to meet, from staff to business partners to airlines, so I make a point of getting around to talk to everyone and so they

can get to know me. Monday morning sees the weekly management meeting at 11am in which staff with direct responsibility for key functions get together and we talk, as a team, about the issues that lie ahead for the coming week. I am doing lots of meeting and greeting at the minute so today I am heading off to Stormont to meet with the First and Deputy First Minister. Primarily it is a ‘get to know you’ session so they can put a face to the name and we can discuss the airport development and any opportunities that are on the horizon. For instance, one of the areas we will be discussing is the significant land bank we have on the airport site that we are hoping to develop. We are keen to achieve enterprise zone status for this area, which will allow us to attract developers to the site and create an area with grade A office space, warehousing and distribution centres, bringing much needed employment to the area.

1pm

Time for lunch and I am catching up with Uel Hoey, our busi-

48 BUSINESS MONTH 3 November 2014

ness development director and one of our customer airlines, to discuss their upcoming new routes and also possibilities for further route development with them. Developing new routes to key markets is the most important item on our agenda — it is essential for us to develop connections between European cities both for tourism and investment in Northern Ireland. We know that many Northern Ireland passengers travel to Dublin because the route they want is not served from Belfast and we are determined to expand our network so that our passengers can fly locally and direct to where they want to go. A Middle Eastern carrier is also very much in our sights.

3pm:

Back to the office and a catch up with Patricia again, to check all the documentation I need for heading to Westminster. I am presenting to the all party parliamentary group of MPs discussing regional airports with a focus on the impact of air passenger duty (APD).

I have recently signed up

to Twitter and find it such a fascinating vehicle for communicating with people. Our airport Twitter has over 11,000 followers and I am sure that will continue to grow.

6pm

Before leaving the office I like to stop by with at our operations control centre. The centre is at the heart of the operating and essential to the efficient running of the airport. I also call in with the airport police at the station, normally for a cuppa and a chat, before heading off home. It is important for the staff to be able to talk to me and see me around the terminal and feel that they can approach me with any queries or concerns they may have.

Once I get home and have a quick bite I try to Face Time my sons who are both studying in Scotland. I have to say that the first two months in the job have been exciting and really interesting. I am delighted to be in Northern Ireland and I love the aviation business, I look forward to each day and the challenges and opportunities that it will bring.

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Calculate if an apprentice makes sense for your firm THE Institute of the Motor Industry has launched a new apprentice return on investment (ROI) calculator which will help employers and training providers make a strong business case for hiring an apprentice. The calculator makes use of recent data from the IMI’s ROI studies to allow businesses to measure the costs of hiring an apprentice against their own unique business requirements. Last year saw the first rise in apprenticeship starts since 2010 and the IMI is aiming to use the calculator to drive continued growth in this area.

Businesses can now access their own unique forecast for free online and via mobile.

Driverless Audi completes full circuit of Hockenheim AUDI used the final race of the German Touring Car Series to demonstrate their driverless car. It took the Audi RS 7 pilot-

ed driving concept just slightly over two minutes to complete a lap on the Grand Prix track in Hockenheim.

For orientation on the track, the car uses specially corrected GPS signals. This GPS data is transmitted to the vehicle via WiFi according to the automotive standard and redundantly via high-frequency radio. In parallel to this, 3D cameras in the car film the track, and a computer program compares the cameras’ image information against a data set stored on board. This enables the car to place itself on the track to an accuracy of a few centimetres.

Festival of Speed and the Revival return to Goodwood GOODWOOD Circuit has announced the provisional dates for both the Festival of Speed and Revival meeting in 2015.

The Festival of Speed, celebrating the very best from the past and present of motoring and motor sport, will be held on June 25 to 28, 2015.

The Revival, the world’s most

popular historic motor racing and vintage culture event, will be held for an 18th time from September 11-13.

Tickets and hospitality packages for both events will go on general sale on Thursday, November 6, as will a limited number of tickets for the 73rd Members’ Meeting, which was recently confirmed as being held on March 21 to 22 2015.

£5.4m fund to help improve automotive supply chain FUNDING of £5.4m awarded recently by the Department for Business, Innovation and Skills (BIS) will help six UK automotive suppliers win new business and close the skills gap. Currently only a third of the parts used in UK-built vehicles are sourced domestically.

The investment, which was announced by Business Secretary, Vince Cable, will help businesses around the country win and maintain more contracts with large automotive suppliers.

The government-industry investment includes £2.7m

MOTORING NEWS

from the Employer Ownership Fund automotive supply chain competition. The fund enables employers to design training projects that can address skills shortages holding back their business, providing 50% match funding to the company.

SMMT chief executive Mike Hawes said: “Strengthening the UK supply chain is essential for the future prosperity of the whole automotive industry.

We have to secure skilled jobs for long-term growth so this funding will ensure that UK suppliers are well placed to take advantage of the potential £3bn of new business opportunities available to them.”

No disc required... but all drivers still need to be taxed WITH the changes to car tax now in place, a tax disc is no longer required to be displayed on the windscreen. However, to drive or keep a vehicle on the road, owners are still required to tax their cars, and the DVLA will continue to send out a renewal reminder. While the

3 November 2014 BUSINESS MONTH 49

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MOTORING

MONEY MAKER Updated Passat shows why the saloon is Volkswagen’s best seller, says Jim McCauley

I

T may retain a familiarity, but the elegant bodywork of the eighth generation Volkswagen Passat clothes an all-new car. Featuring state-of-the art electronic driver support systems, the new saloon is presented by the company as having ‘advanced technology in a designer suit.’ The model is extremely important for Volkswagen as it is their best selling vehicle world-wide with over 22m sales in its 41 year journey. Today that pace is maintained with 3,000 cars

50 BUSINESS MONTH 3 November 2014

a day leaving the showrooms.

While the latest model is all-new and 85 kg lighter than its predecessor, it develops the lines of the current car into a more refined and sophisticated presentation with a lower roof-line and wider body. An increase in wheelbase by a notable 79mm provides a roomier cabin without sacrificing boot space, while larger wheels complete the package.

Launched in some markets including the Republic of Ireland with a 1.6 litre petrol

engine, UK models will all be turbo-diesels in either 1.6 or 2.0 litre capacities, and ranging in output from 120 PS to 240 PS. Test choice was this latter power unit, its twin turbo 2.0 litres developing 500 Nm of torque from 1750 rpm.

Delivering power to all four wheels via the company’s tried and tested 7-speed DSG gearbox, it covers the benchmark sprint to 60 mph in under six seconds with the potential to top 150 mph.

But what statistics do not

record is the smoothness of the power delivery and the overall refinement of the engine even under firm acceleration. As is the case with this transmission, it can also be used in ‘Sport’ setting for a sharper response while a manual override option is available on both the gear select lever and the steering wheel mounted paddles.

Handling on the Passat was significantly improved with the introduction of the four-link axle and this has been further developed

VOLKSWAGEN PASSAT 2.0 TDI 4MOTION Engine: 2.0 litre, 4-cylinder twin turbo TDI diesel; 240 PS at 4,000 rpm; 500 Nm torque from 1,750 to 2,500 rpm Drive: Via 7-speed direct shift gearbox (DSG) to 4MOTION all-wheel drive Performance: 0-62mph (100km/h) in 6.1 seconds; max, 150 mph (240 km/h) Fuel on combined cycle: 53 mpg (5.3 l/100km) CO2: 139 gms/km; VED Band E for annual car tax of £130 Trim: R-Line Price: £35,505 Insurance: N/A Warranty: 3 years/60,000 miles Benefit-in-Kind: 20% Euro NCAP: Expected 5-Star Available extras: 3-year Service Package £384, Extended 4-year warranty £390, Area View obstacle detection system, Park Assist, Trailer Assist, Rear Traffic Assist, Front Assist (including City Emergency Braking function with Pedestrian Detection). Prices of these to be confirmed.

for improved performance as well as ride comfort.

All-wheel drive is standard on this flagship model with situation based power distribution. Equipped with the 5th-generation of Volkswagen’s ‘4MOTION’ system, the car maintains a front-wheel drive only power delivery but can respond immediately to all-wheel distribution, including almost 100% to the rear wheels as the situation demands.

In addition to the all-weather/poor surface advantages of such a system, it also permits earlier application of power on exiting corners. Power balance on the same axle is further enhanced by sophisticated electronic packages to provide maximum handling security as well as honing steering response.

Other driver support

systems, standard in most models in the range, include the post-collision braking system which automatically brakes the car following an initial collision, while a range of optional systems includes automatic braking application on pedestrian detection or car in front in slow moving town situations.

With the premium sector appeal of the new Passat comes an upmarket interior finish with improved passenger space and higher quality materials. Gone are the traditional analogue instruments which have been replaced by a 12.3 inch ‘active info display’. This high-resolution digital screen presents the main instruments in analogue form while the central space can be used to replicate any information, including navigation from the central console touch screen.

A leather-rimmed steering wheel with multi-function spoke controls is adjustable for reach and rake, complementing the driver set-up choices on the fully electric front seats. The feeling of space in the cabin is accentuated by the slim full-length dash air-vent that gives visual width to the interior and adds to the premium feel, initially suggested on the exterior by the rearward biased cabin and long low bonnet.

The new Passat is also launched with the latest generation of Volkswagen’s info-tainment system, which allows a high degree of connectivity to link up and interface with smartphones and their apps. Among the optimal features are the ability to call two mobile phones at the same time, have text messages read aloud and the

downloading of audio books.

In their eighth generation evolution of the Passat, Volkswagen have raised the stakes in taking their best selling model into the premium arena. And while it may maintain its familiarity to the outgoing model, it adds an elegance that along with its underlying technologies and Euro 6 engines eases it comfortably up-market.

While the UK range starts with the 1.6 TDI manual model at £22,215, the flagship model tested in R-Line trim is listed at £35,505.

All models can be ordered now for January delivery in either saloon or estate formats.

The standard three year/60,000 mile warranty can be extended to four or five years while a three-year service package costs just £384.

3 November 2014 BUSINESS MONTH 51

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TECHNOLOGY Treze ‘Heads Up’ Software MonitoringTool, £15 p/mth @ www.nobully.com Treze is a Newry software development and marketing company that has developed a product called Heads Up, after extensive research and consultation with child psychologists and schools.

Heads Up is a cloud-based software tool that enables parents to monitor their children’s social media activity in a non-intrusive, trust-based manner. The software will provide parents with alerts for any possible negative activity, cyberbullying and inappropriate language originating on any device on their children’s social media and email accounts. Treze has its own online platform — nobullying.com, which is already attracting a quarter of a million sessions per month and has over 2,000 original published articles prepared by written by child psychologists, online safety experts, teachers and parents.

HTC Desire EYE Smartphone £400 approx @Three UK

The HTC Desire EYE has been dubbed the ‘selfie’ lover’s smartphone due to its impressive camera features. With its dual 13MP cameras on the front and back, 5.2 Full HD screen and BoomSound speakers, the Desire Eye delivers on all fronts. It has a unique cylindrical design, made to fit comfortably in your hand. The RE app features a remote live viewfinder that lets you set up the perfect shot and watch the live action on the screen of your mobile device, or switch to album and playback view to flick through the shots and videos already stored on the camera. In the future, this RE app will be available on Android and iOS and offer real-time video streaming to YouTube, allowing you to live in the moment and share Lumicycle Insight Light £80 @ www.lumicycle.com it live via your YouTube There are millions of cyclists on the road and if you are one of them you might channel. feel invisible to car drivers, despite wearing a high-viz jacket or using flashing lights. Help is at hand with the Lumicycle Insight that recognises when you have hit the brakes and lights up the rear light, just like brake lights on motorbikes and cars and everything else on the road. There is tech built in to this light that ‘learns’ how you’re riding and interprets when you’re braking and when you’re just bashing about on potholes. It also has a healthy 50 lumens in light mode, but fires out 200 lumens of Cree and Samsung LED action when braking is sensed.

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Belfast to host a digital economy and technology event Following the success of last year’s event, Digital DNA will take place from November 4-7 in various venues across Belfast. The all-round business experience will showcase the very best knowledge, practice and expertise from local successful business and global thought leaders. It will bring together the very best digital practitioners, creative leaders, successful entrepreneurs, business advisors and inspirational speakers. Tickets available to purchase at www. digitaldna-ni.com

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FASHION

Wool winner

By Grainne McGarvey

W

ITH a noticeable chill in the air it’s time to fight the elements and snuggle up with the perfect winter material — wool. This traditional fabric has become so important, it even had its own week of celebration in

Howick wool checked flat cap: £25@House of Fraser the UK last month. Also in favour with the fashion pack this season, designers have been embracing a relaxed and earthy palette.

Coats, bags and even shorts are embracing this natural material and giving us an opportunity to wrap up in a range of layers and styles.

Herringbone trousers: £65@ White Stuff

Wool rib zip cardigan: £199 @ Jaeger Luxe grey cropped top: £28@ Dorothy Perkins

Luxe wool walker coat: £150@ Land’s End

Woollen coat: £440@ Eden Park Cable midi-dress: £69.99@Monsoon

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TRAVEL

New York State-side It’s not just about shopping and skyscrapers – for outdoor adventures and fall foliage, now is a great time to visit the bigger, greener apple, says James Litston

N

EW York, New York. So good, goes the song, they named it twice. And with good reason — for although its headline attractions stretch from Macy’s, museums and the Empire State Building to the Brooklyn Bridge, Broadway and Lady Liberty herself, the city that never sleeps only occupies a fragment of the state.

Beyond, to the north (hence the “up” in upstate) lies a vast territory bordered

by Canada, New England and the mighty Great Lakes. Spanning forests, farms and mountain preserves, it’s the bigger, greener apple. While first-time visitors rarely stray much beyond Manhattan, New York State’s wider appeal lures second and third-timers to mix urban and outdoor environments. How best to convey the sheer scale of New York State and its great outdoors? Well, the state is bigger than England — and its mightiest park, Adirondack, is larger than Wales.

Once you break free of NYC, you find a green and exceptionally pleasant land which is also becoming a hub for conservation and preservation of wildlife.

The state divides itself into 11 regions, of which the closest — Long Island and Hudson Valley — are ideal for a brief escape. The Hudson River rises in the Adirondacks and flows south to the Atlantic via New York City.

On its way, the river cuts through a valley so captivating that it inspired its own artistic movement, the Hudson River School of the mid-1800s. Glorious valley views can be had on Poughkeepsie’s Walkway Over The Hudson (walkway. org), a mile-long former railway span revived as the world’s longest elevated footbridge (with links to further trails).

The main rail route from New York City’s Penn Station (amtrak.com) follows the Hudson Valley north. Manhattan to Poughkeepsie, takes only 90 minutes and costs as little as $25 (£15) one way.

One railroad branch continues north to Montreal. The full, scenic journey takes 11 hours (from $67/£40, one-way).

The other loops west towards Buffalo and Niagara Falls, with trains continuing to Toronto or Chicago.

Further north, the Catskills are a hit with weekending New Yorkers, while the rest is best explored on a multi-day, self-drive trip.

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Times Square in New York City - but there’s more to the state than just the Big Apple The state’s vast expanse of uplands, lowlands, historic towns, wineries and Atlantic and lakefront shores make for endless recreational options. For outdoor enthusiasts, there’s hiking, biking and white-water rafting (plus skiing and snow-shoeing in winter), or kayaking and boating on the waterways. Urbanites might prefer galleries, outlet malls and farm-to-table dining, or the seaside scene in Fire Island or the upmarket Hamptons. And there’s Niagara Falls, New York State’s signature sight, where walking trails and boat rides take you right into the spray.

Although it holds year-round appeal, autumn is arguably the best time to visit.

The maples are the first to turn and put on the best display, followed by oak, ash and hickory, and the stately American beech. The result is a patchwork of blazing colour; the Adirondacks and Catskills hold the largest tracts of forest, so head here to catch the scenery at its glorious, seasonal best. October is also the perfect time to encounter the king of fish. The aptly-named Salmon River, in the Thousand Islands Seaway region, is considered the fishing capital of the American north-east. Chinook and Coho salmon are the target species here, with the “run” of fish surging upstream to spawn reaching its climax mid-month.

Bear in mind that upstate hotel rates tend to be lowest on weekdays, when New York City prices can often be sky high. Conversely, the city is cheapest at weekends, so time your trip accordingly to make the most of your budget.

If there’s one thing New York State isn’t short of, it’s water. Flanked by two

of the Great Lakes (Ontario and Erie) and home to countless others, there’s an abundance of aquatic activities to enjoy.

Beyond fishing, boating and kayaking, there are leisurely cruises on Lake George, the “Queen of American Lakes” (lakegeorgesteamboat.com) and sailing on the 125-mile-long Lake Champlain.

In the scenic Finger Lakes, however, the main appeal is on land. This is New York’s best wine country, awash with tasting opportunities. There are several wine trails to follow, such as America’s first, the Cayuga Lake Wine Trail (cayugawinetrail.com), which takes in 17 boutique wineries and four distilleries.

Audley (01993 838 755; audleytravel. com) suggests a 12-night New York State Discovered fly-drive combining NYC with the Finger Lakes and Niagara Falls.

From £2,210pp, including flights, car hire and accommodation.

The Catskills are New York City’s playground, offering open space filled with family attractions and outdoor adventures.

The Adirondacks are larger still. The mountain resort of Lake Placid has hosted two Winter Olympic Games — in 1932 and 1980. Find out more at the Olympic Museum (whitefacelakeplacid.com).

Skiing and snowboarding are on offer in many locations, with Gore Mountain claiming the most terrain in New York State (goremountain.com).

For a genuine away-from-it-all break, head to Garnet Hill Lodge (001 518 251 2444; garnet-hill .com), near the village of North River. This cosy, family run hotel has just 16 rooms in a hilltop log cabin with far-reaching views over forest and lake. Chipmunks, deer and wild turkeys are frequent visitors to the garden, and it’s even accessible by train (via Saratoga Springs) for those who don’t want to drive. Rooms from $195 (£114).

Niagara and beyond At just 35 miles long, the Niagara River may not be among the world’s longest, but its waterfall is of global renown.

Niagara Falls is actually a collection of cataracts — Horse-shoe, Bridal Veil and American Falls — shared between Canada and New York.

Grand American Adventures (0333 999 7961; grandamericanadventures. com) has a three-day coach tour departing from Newark for £375pp, including a

guide, accommodation and boat trip.

Post-falls, the Niagara empties into Lake Ontario, which itself is drained by the St Lawrence River through the Thousand Islands Seaway. This was the destination of choice for well-heeled, Edwardian-era New Yorkers, and its laid-back appeal prevails to this day.

Waterfront Clayton makes an ideal base for kayaking through the archipelago or biking around Wellesley Island State Park. Also, don’t miss the outstanding cuisine at Bella’s (001 315 686 2341, bellasonlinenow.com), a restaurant that is big on local flavours.

Stretching 118 miles from the borough of Brooklyn to Montauk Point, Long Island is anchored in city and seaside.

Barrier islands front the Atlantic: some are protected zones ideal for picnics,

swimming and windswept walks; others are buzzing resorts.

Long Island’s most celebrated resorts are The Hamptons, a string of oceanfront villages where New York society summers in style.

East Hampton, with its bars, boutiques and see-and-be-seen vibe is arguably the chicest spot. Parking can be difficult, so it’s best to come by bus (from $25/£15 one-way; hamptonjitney. com) or train (from $20/£12 one-way, mta.info/lirr) and rent a bicycle for getting around. Or stay at The Maidstone (001 631 324 5006; themaidstone. com), a Scandinavian-inspired boutique retreat, and you can borrow a bike free of charge. Rooms cost from $263 (£164) per night, including breakfast.

New York City is not the state capital.

That title goes to Albany , which lies in the Hudson Valley, 135 miles north of NYC. Today, the Erie Canal is a popular attraction, drawing cyclists to ride the 365-mile Erie Canalway Trail (eriecanalway.org) and less energetic types to interpretive boat tours. The rail journey from Manhattan takes two hours, 30 minutes, for a fare of $41 (£26).

The wider region is also known for the genteel spa town of Saratoga Springs, which has a charming Downtown and a Performing Arts Center with a roster of high-profile acts.

America As You Like It (020 8742 8299; americaasyoulikeit.com) can combine Capital country with Long Island, the Hudson Valley and the Catskills on a 13-night fly-drive from £1,295pp, including flights, car hire and accommodation.

Getting there: New York is the obvious gateway. Flights from Heathrow are available with BA (ba. com), Virgin (virgin-atlantic.com), United (united.com), American (aa.com) and Delta (delta.com), and from Gatwick on Norwegian (norwegian.com). American and United also fly from Manchester, and United from Edinburgh, Glasgow and Birmingham.

Northernmost New York State is easy to reach from Canada; BA, Air Canada and Air

Transat (airtransat.co.uk) serve Toronto and Montreal from London.

316 3012, bon-voyage.co.uk) suggests a wellpaced, 10-day Beautiful Upstate Journey.

A package including flights, car hire and accommodation costs from £1,795pp.

Getting around Besides the rail options from New York City to Albany and Niagara, Megabus offers lowcost links in the state. Manhattan to Albany typically costs $15 (£9), with six departures a day. The end-to-end journey from Buffalo to New York costs $30 and takes eight hours.

Fly-drive options abound. Bon Voyage (0800

More information The State’s website is iloveny.com. Responsible Travel has a guide to New York State’s smaller-scale tours, activities and accommodation that benefit communities and countryside (bit.ly/ResponsibleNYS).

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TRAVEL

Six of the best: European ski hotels For Friends Hotel, Austria

Poised on the edge of the Inn Valley, For Friends Hotel is open for its first ski season, having launched this summer. The hotel’s design aims to blend into the surroundings with timber cladding, glass walls that give way to panoramic views over the Tyrol region and a sauna carved into the rock face. Accommodation ranges from standard rooms to “lofts” and suites; for the biggest and best in the house, check into the Rooftop Suite, which has two bedrooms, a private sauna and garden terrace. The hotel may not be right next to the slopes, but the surrounding area has 37km of ski pistes.

Am Wiesenhang 1, Mösern, Tyrol, Austria (00 43 5212 20300; for-friends-hotel.at). Doubles start at €170, including breakfast.

Le Mélézin, France

A stay at this atmospheric hotel gives you access to the world’s largest ski area, Les Trois Vallées on the French-Swiss border. Situated on the Bellecôte ski slope – a short stroll from Courchevel 1850 – Le Mélézin’s interiors feature a mix of bronze sculptures and 200-year-old oak beams framing the communal spaces. A light, modern take on French cuisine is the order of the day at The Dining Room restaurant, while a spa, sun deck, hammam and pool are ideal for après ski relaxation.

Le Mélézin, Courchevel 1850, France (00 33 4 7908 0133; amanresorts.com/lemele zin).

Doubles start at €880, room only.

Nira Montana, Italy

This sister hotel to the Nira Alpina in Silvaplana, Switzerland, opens in the Aosta valley on 5 December. Set in the former mining town of La Thuile – a popular resort with families – it offers access to 160km of high altitude runs in Italy and France.

Inside, you’ll find warm rooms with a sylvan theme – forest wallpaper, tree trunk tables and polished wooden floors. High quality, informal Italian dining is offered in the Stars Restaurant,

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while the spa offers an indoor pool, sauna and treatments.

Localita Arly 87, La Thuile, Italy (niramontana.com). Double rooms start at €275, half board.

DVChalet, Italy

Although labelled a chalet, this stylish ski lodge is in fact a small hotel with just 20 rooms, each individually designed and adorned with classic furniture by Eames, Le Corbusier and Alvar Aalto. The restaurant serves dishes made with organic Italian produce, while the slick spa features thalassotherapy treatments and Turkish baths.

DV Chalet is just 300m from Madonna di Campiglio’s Spinale ski lifts.

Via Castelletto Inferiore 10, Madonna di Campiglio, Trentino, Italy (00 39 0465 443191; dvchalet.it). Double rooms start at €210, including breakfast.

Das Central, Austria

This five-star retreat is situated in the Tyrolean village of Sölden, home to 144km of pistes and traditional slopeside restaurants. Like the mountains surrrounding the hotel, everything is on a grand scale here, with 30,000 bottles of wine in the cellar and a three-storey spa equipped with 10 saunas and 16 treatment rooms. Extras such as ski safaris, Nordic walking, snowshoeing and a shuttle to nearby lifts are included in the room rates.

Auweg 3, Sölden, Austria (00 43 5254 22600; central-soelden. at). Doubles start at €192, half board.

Hotel Firefly, Switzerland

This luxurious hotel at the base of the Matterhorn is all-suite, with some of the 16 rooms accommodating up to 10 people.

With ski-in, ski-out access it’s easy to get on to the 200km of pistes around Zermatt (20km of which are operational in summer). The Firefly’s Bar 55 is ideal for an après-ski drink, but if you prefer a more supine form of relaxation there is a spa.

Schluhmattstrasse 55, Zermatt, Switzerland (00 41 27 967 76 76; firefly-zermatt.ch). Doubles start at Sfr595 (£390), including breakfast.

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Appointments

OUT AND ABOUT

withThe

CHAIRMAN The Chairman is relieved to report from a string of interesting social events as the glitterati lure him from his BT9 mansion Mervyn Perry has been appointed business development manager of the cleaning division of The Mount Charles Group. He will lead the growth of the division by identifying new opportunities. He is a former regional sales manager at Zenith Hygience Group.

Karen McMenamy joins Smarts Communicate as an account manager, working across a range of global FMCG clients. Before joining Smarts, she worked in commercial, customer marketing and consumer marketing roles for Diageo.

Natasha Jordan has joined law firm CFR as a trainee in its company/commercial department. She graduated from the University of Liverpool in 2012 and completed the LPC at the University of Law, Chester in 2013. She previously worked at Clyde & Co.

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HE Chairman loves a good Northern Irish invention as much as the next man, and has sat on many Massey Fergusons, and been ejected from many seats through the years.

Thankfully he was on his best behaviour at Titanic Belfast for this year’s INVENT 2014 Northern Ireland Science Park Awards, which celebrate the cleverest inventions with the greatest money-spinning potential.

The Chairman enjoyed an excellent dinner with the Kernel Capital clan, including Belfast Kernel partners Daniel McCaughan and Jayne Brady, as well as guests Neil Simms, Paul Brown and Gavin Campbell.

The Chairman was delighted to talk about old times with Gillian McKenna of Invest NI, but dares not to hope he remains as freshfaced as she.

It’s fair to say that Ms McKenna and the Chairman trod to excess on memory lane, remembering the old days back in corporate finance with the IDB and old friends like Charles Harding, John Hume and Derek Shannon.

The Chairman was bowled over by the ingenuity on display from the award winners, and looks forward to tracing his own fascinating forebears using the technology pioneered by overall winners, Leona and Sean McAllister of Plotbox.

William Wright of Wrightbus was a reminder of the longevity of our brightest minds, and mere schoolboy Gareth Reid a foretaste of the great future which lies in wait for the tech sector.

The Chairman exited the Titanic Belfast, rolling gently from side to side as is his wont after one or two libations – and he was delighted to bump into sprightly

58 BUSINESS MONTH 3 November 2014

Jerry Kochanski of INVENT 2014 finalist Coolsafe 360, along with Gavin Campbell of engineering category sponsor Bombardier

Sean and Leona McAllister of INVENT 2014 overall winner Plotbox and Michael Black of category sponsor Intel economist John Simpson, the elegant Clare Weir of the Belfast Telegraph and suave BBC man Symon Ross.

A queue at the car park ticket booth was a great opportunity for a catch-up with the Chairman’s favourite hacks.

Appointments

Jade Gabriel has joined law firm CFR as a trainee solicitor in the property department.

She graduated from Queen’s University Belfast in July 2014 with a degree in law. She will be attending the institute of Professional Legal Studies in January 2015.

Rachel Lewis has joined law firm CFR as a trainee in the litigation department. She graduated from Queen’s University Belfast in July with a degree in common and civil law with French. She will be starting her studies at the Institute of Professional Legal Studies in January 2015.

(l to r) Sean McCann, head chef of Canteen at the MAC, and Joery Castel of The Boathouse in Bangor hosted a gourmet night in Belfast’s MAC as part of Belfast Restaurant Week The Chairman tickled his artistic side this month at Canteen at the MAC’s Art of Food and Wine evening in Belfast’s trendy district, the Cathedral Quarter.

The chef behind the stove doing his bit for Belfast Restaurant Week was The Boathouse in Bangor’s Joery Castel, with wine selections provided by United Wines’ Ciaran Meyler.

The soiree began by ambling through the upper and tall gallery, admiring the work of artists Colin Darke and Peter Liversidge while savouring the first two courses of the five course adventure. The opening course marked a first for the Chairman, who’d never had eel.

The smoked Lough Neagh eel with apple was wonderfully paired with the Chairman’s favourite wine of the moment, a light and fruity Albarino.

For the third course the Chairman descended to the sunken gallery, this time eating in the more traditional fashion of a table.

The sunken gallery has to been one of the most delightful settings to have dinner, surrounded by the paintings and sculptures of artist Kevin Henderson.

The Chairman was humbled to be joined by Sharon Wright, director of Canteen at the MAC, Belfast Chamber of Commerce president Paul McMahon and

his wife Sharon McMahon, and husband and wife, Phil Smyth and Jean Wylie.

The Chairman loves to talk about food as well as eat it, and eagerly led discussions on how Marks and Spencer’s food isn’t what it used to be, while the supposedly discount retailer Lidl’s food is surprisingly good.

And laughed at how the Chairman can’t get parked in the German supermarket’s west Belfast store for all the BMWs and Mercedes.

With the last two courses accompanied with port, the Chairman will be having a stern word with Ciaran Meyler for the sore head he experienced the next day.

Nathan Campbell is joining law firm CFR as a trainee solicitor in the private client/consultancy department. He graduated in 2011 from Durham University. He was formerly a legal assistant for another Belfast law firm and also spent time on secondment overseas.

3 November 2014 BUSINESS MONTH 59

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THE CHAIRMAN Appointments

Thomas Holmes has been appointed the new sales and marketing co-ordinator at Hutchinson Engineering. He has been with the company for five years and is now responsible for identifying new customers. Hutchinson Engineering is a laser cutting, folding and fabrication sub-contractor.

(l to r) Ross Mullen, Joe Mayse and Alan Stewart from Marcon Fit-Out at the opening of the new Synge & Byrne coffee shop in Londonderry’s Foyleside Shopping Centre. The firm led the design of the new cafe

Brian Beattie has been appointed all-Ireland marketing director for Northern Ireland drinks company, Tennent’s NI, part of the C&C Group. He has held senior roles in Arla Foods and Dale Farm. He is responsible for marketing Magners, Bulmers, Clonmel 1650, Tennent’s, and Tipperary Water.

Jeff Tosh has been appointed head of Northern Ireland on trade for drinks company Tennent’s NI, part of the C&C Group. Mr Tosh is also customer marketing manager for the company and has extensive experience in the hospitality, catering and licensing trade.

TEDFORDS restaurant in Donegall Quay, Belfast was the setting for the Eakin Group’s latest big announcement.

Over a truly delicious lunch Tom, Paul and Jeremy Eakin, from the Co Down medical device manufacturer, told the Chairman all about buying Cliffe Medical.

The Comber-based firm is making huge strides in the healthcare market and as part of the acquisition has also taken over Respond Plus, a medical distribution business in Larne, where the Chairman’s associates are still reeling from how the town was presented in last month’s BBC Northern Ireland documentary, I Love Larne.

The Chairman is a big fan of the Co Antrim coastal town and will proudly sport an I Love Larne badge on his tuxedo at his next engagement there.

So, back to Tedfords and the chaps from Eakins.

The Chairman is hard to impress but couldn’t help but pat the Eakin guys on the back for their rapid expansion over recent years through a series of strategic acquisitions.

Its products are now sold in 36 countries worldwide delivering annual revenues in excess of £60m.

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Not too shabby at all.

The delightful Chris Cochlin, Nic Stevenson and Nicola Ingledew from Pelican Healthcare, part of the Eakin group, were over from Wales to celebrate the Cliffe Medical deal.

Also dining with us was the cream of Belfast journalism, including the newly-wed Press Association’s David Young, BBC NI business journo Symon Ross, alongside the busiest and chattiest freelance reporter in town, Amanda Ferguson. The Chairman was also delighted to mingle with Fiona Brown and Lawrence Duffy of hosts Duffy Rafferty.

THE Chairman does try to be discriminating in whether or not he accepts the many stiffbacked gilt invitations which cross his antique desk.

But when a Londonderry/ Maiden City/Stroke City/Derry event comes calling, he’s straight on the train faster than you can say Feargal Sharkey.

A good cafe in the old days was hard to find — but no more, thanks to a lovely new spot in Derry.

Movers and shakers from the world of business, beauty and design were treated to an

evening of music and hospitality, as new cafe brand Synge & Byrne had its grand opening at the Foyleside Shopping Centre.

And no, the name isn’t a tribute to the Chairman’s favourite playwright and Late, Late Show host respectively, but a clever, made-up brand.

The Chairman tapped his geriatric toes to music from Derry singer songwriter Laura B (Tangled Music), who played an acoustic set to entertain guests.

He also downed lattes, cappucinos and flat whites to his heart’s content, and had a disturbed night’s sleep as a result.

Mayor Brenda Stevenson welcomed the new outlet to the city and showed her support for the team.

Marcon Fit-Out maestros Ross Mullen, Joe Mayse and Alan Stewart looked on proudly at their handiwork — while October Business Month cover girl Grainne McGarvey kept an eye on the smooth running of the evening.

Synge & Byrne owners Damien and Adrian Garvey said they had been delighted with the warmth of the north west welcome and are looking forward to doing business And let’s raise a flat white to that.

THE LAST WORD

with Jamie

Stinson Restaurants here are burgeoning, with more and more sprouting up. But this growth could be halted due to the high rate of Vat that they pay here compared to the Republic of Ireland

R

ESTAURANTS in Northern Ireland have begun to flourish over the last few years, and it feels like there’s a constant stream of new openings.

We’ve seen the opening of The Poacher’s Pocket (formerly known as Lisbarnett House), Canteen at the MAC, and Howard Street, to name but a few.

That’s in addition to Belfast staples like Mourne Seafood, Shu and James Street South, which feel like they’ve been around forever.

In what was once a more laboured decision, now diners have never been so blessed for options on where to go out.

Saying Northern Ireland restaurants don’t get the credit they deserve has been so commonplace, it’s almost a cliché.

Since 2011, Northern Ireland has been without a Michelin star, when Deanes lost its accolade.

Darling of the UK newspaper restaurant critics, OX is viewed as the most likely to gain a Michelin star, with its Alain Passard-influenced cooking, while Bangor has the hugely underrated The Boathouse, where Dutch chef Joery Castel is creating ambitious dishes which are exciting and different.

It would be wrong to say they’re all perfect, but the variety in what’s available for diners is a huge improvement on five years ago, never mind before then.

With more and more restaurants opening, there becomes greater competition for getting customers through the door.

This keeps places on their toes, knowing they have to be at the best or consumers will take their money elsewhere.

However, there is a huge problem facing the industry, stopping the growth of the new restaurants and expansion in existing ones.

The restaurateurs in Northern Ireland are plagued by three letters: Vat. In last month’s Irish Budget, Finance Minister Michael Noonan announced he would extend the tourism industry’s exemption from paying the higher rate of Vat in the Republic, a policy first introduced.

The tourism sector includes hospitality, with restaurants and bars only paying 9% VAT. In stark contrast, across the border Northern Ireland restaurants pay the same 20% rate of Vat as every other sector in every other part of the UK, more than double what they would be paying over the border.

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Business owners in the hospitality sector have been calling for a measure to put both sides of the border on an even footing.

It’s not just about cutting the tax bill, it’s about making them more competitive against businesses throughout the whole island of Ireland.

In the south, the reduction in the rate has been of great benefit and supported by both businesses and consumers.

It’s been helping people when they’ve a little less in their pocket than they’d like, keeping the restaurants and bars full.

I spoke to one restaurateur with venues north and south, and he said in the south he was able to invest back into his business, train staff, and improve wages. In the north, it was the opposite.

Despite wanting to put money back into the business and expand, after the tax bill there was no money left in the till.

This, for me, is a major worry, as without being able to invest back into business, it will stop improving quality for staff, keep good staff incentivised to stay will the business, and it’s inhibiting the creation of new jobs.

Earlier this year, South Down MP Margaret Ritchie raised the issue in the House of Commons, calling on the UK government to address the problem. She argued a reduction in the Vat rate would create demand, create jobs and help reduce youth unemployment.

In the first year it was introduced in the south, it’s said to have created 10,000 jobs — while in Northern Ireland, it has been estimated a similar cut would create just under 3,300 jobs.

It would also go towards tackling one of the bigger problems faced by the economy in Northern Ireland, youth unemployment.

Jobs in the hospitality are traditionally taken by younger people, and getting these people into work, or back into work, is a big problem in the province.

Youth unemployment, those between the age of 16-24 years old, in Northern Ireland (18%) is above the UK average (16%).

Having young people in work is great for the economy, not only for the unemployment figures, but because they spend money. Young people go out, they go shopping — they are not worrying about carrying over anything over to the following month.

In other words, they’re not savers. This isn’t Germany.

Young people are not waiting for a rainy day. They’re spending their wages on a new pair of jeans or down the pub with their

mates. The money is ploughed back into the local economy and helping businesses in the area.

Vat is not devolved to Stormont, so Westminster must decide. The Treasury has burst the bubble of those looking for a cut, maintaining it wouldn’t accept a UK-wide reduction.

Well, a Vat reduction throughout the UK would cost the Treasury a lot, at a time when it’s still counting the pennies.

But they should not just flippantly disregard allowing the tourism industry in the Northern Ireland a relaxation in the rate.

This is not about tax cut for firms in Northern Ireland while penalising those in England, Scotland and Wales.

It is about allowing firms in the province fairly compete with its direct competitors in the Republic of Ireland.

Restaurants are on the rise

There is a huge problem facing the industry, stopping the growth of the new restaurants and expansion in existing ones.