INTERVIEW
Issue 29
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July 2, 2015
Distributed with Times of Malta
Hiving off property management means the board can focus on core operations, Farsons chairman Louis Farrugia explains. see pages 10 and 11 >
NEWS Loans from banks could be as much as €1,150 million lower by 2016 than they should be given the projected economic growth, the Central Bank of Malta warned. see page 3 >
Setanta claims reach €90m Vanessa Macdonald The Irish High Court will convene on July 13 to determine whether the Motor Insurance Bureau of Ireland could – or should – help to make up the expected shortfall of nearly €60 million to Setanta clients. Setanta is the Malta-registered motor insurance company that collapsed over a year ago. The appointed liquidator, Paul Mercieca, said that it was hoped that judgment would follow shortly after. “The resolution of the court case as soon as possible is critical in unlocking the claims situation and the longer this takes will be to everybody’s detriment. Setanta was set up in 2007 but collapsed and stopped trading in April 2014 after it declared that it did not have enough money to settle all
claims – most related to motor vehicles. The situation has escalated since then as more claims emerged about accidents and injuries. There are over 600 known court cases involving Setanta claims – and the liability has already risen to €90m. “It must be emphasised that this is just a best estimate based upon the actuarial advice that I have today,” Mr Mercieca said. There are around 1,750 claimants – as well as around 75,000 clients who want refunds of premiums – who need payment and Mr Mercieca estimates that only 30 per cent of the amount due will be paid from Setanta’s assets. A meeting for creditors was held in Malta last week, attended by around 25 claimants in person, with many other represented by proxy. Claimants are getting more and more frustrated by the delays with frequent complaints in the Irish
media and still no clarity on who is going to make up the shortfall. “We spent several months working hand in hand with the competent authorities in Ireland, dealing with very complex issues, and it was hoped that the first tranche of claims would be put forward for consideration by the Insurance Compensation Fund by mid-February of this year. Unfortunately, at the eleventh hour,” Mr Mercieca told The Business Observer. “Much to my frustration, the accountant of the Courts of Justice, who is responsible for the administration of the fund, received legal advice, contradicting earlier advice that he had received, that MIBI possibly has a role to play in the settlement of claims. “As a result the claims process was stalled until it is determined whether the fund or MIBI will have a role in settling claims.”
MIBI was set up to compensate victims of road traffic accidents caused by the negligent driving of uninsured drivers. At the meeting last week, the creditors were also expecting to be told whether there was any possibility for legal action to be instituted by the liquidator in the appropriate courts against directors and shadow directors of the company. “At the meeting, my legal counsel gave a report of his findings to date, but emphasised that further analysis of the roles of the various directors/shadow directors is needed before considering what action, if any, should be taken,” Mr Mercieca said. “It was also agreed that this matter will be taken up with the creditors’ committee, which was appointed at the meeting, once the lawyers have completed their work.”
NEWS Over three-quarters of financial services companies that have at least one vacancy have hard-to-fill positions, according to the MFSA’s skills need survey. see page 5 >
OPINION Economist Philip von Brockdorff analyses the recent pension proposals to see whether we can really avoid raising the retirement age. see page 15 >
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NEWS
Credit could be €1 billion lower than projected by 2016
The amount of loans from banks could be as much as €1,150 million lower by 2016 than it would have been given the projected economic growth, according to a research paper published by the Central Bank of Malta. The calculations were done by Brian Micallef, a senior research economist in the Modelling and Research Department of the Central Bank of Malta. He used different models and factored in variables to conclude that the credit gap was expected to widen to around €790 and €1,000 million by end-2015 and between €840 and €1,150 million by end-2016. The credit gap is defined as the difference between actual credit to domestic non-financial corporations (NFC) and the hypothetical path this would have followed had past historical relationships over the period 1995-2011 been maintained.
Credit growth has been on a downward trend since 2008 and turned negative since 2012, widening significantly in 2013 and 2014. As at the third quarter in 2014, the credit gap was estimated between €680 and €830 million. “Despite the resilient performance of the domestic economy, credit to the private sector has been on a downward trend in recent years, driven mainly by developments in loans to NFCs. From a sectoral perspective, the contraction in credit was mostly due to developments in construction, and to a lesser extent, to wholesale, retail and the hospitality industry. From a medium-term perspective, however, domestic banks have been gradually shifting their loan portfolio from NFCs towards households, with the share of the latter increasing from 37.8 per cent in 2005 to 47.6 per cent in 2014,” he wrote.
“Credit growth has been on a downward trend since 2008... As at the third quarter in 2014, the credit gap was estimated between €680 and €830 million”
“The decline in bank credit can be a combination of both demand and supply side factors. Evidence suggests that changes in the banking sector landscape, higher pricing of loans and somewhat tighter credit conditions, all of which supply related, have played an important role.
“In addition, the interest rate pass-through to lending rates to NFCs has declined after the crisis, with estimates suggesting that only around 50 per cent of the ECB rate cuts since September 2008 have been transmitted to domestic interest rates to businesses.”
Mr Micallef warned that the credit gap estimates were “a source of concern” for a country like Malta where the overwhelming majority of businesses are microenterprises or SMEs. “In the absence of a deep and liquid capital market and without the access to external financing from parent companies, these are generally more reliant on bank financing than larger firms. If banks reduce their exposure to certain business lines, due perhaps to the pressures of a more difficult regulatory environment, to start-ups, SMEs or long-term financing of infrastructure projects, this could ultimately have an adverse impact on the economy’s supply potential,” he wrote. The stock of credit to NFCs in mid-2014, at around €3.6 billion, was back to mid-2008 levels. As a ratio of GDP, this has declined to historical lows not seen since the mid-1990s.
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NEWS
Lack of experience hindering recruitment Over three-quarters – 78.6 per cent – of financial services companies that have at least one vacancy had hard-to-fill positions, with two-thirds of them saying that the main cause was a lack of work experience required to meet organisational demands. The other reasons were lack of skills (51 per cent) and that applicants generally did not have the right attitude, motivation or personality (45 per cent). The figures came from a survey commissioned by the Malta Financial Services Authority’s Education Consultative Council, chaired by former banker John Consiglio. It covered issues relating to recruitment challenges, pertaining to skill deficiencies, skill gaps within the existing workforce and to the incidence of offthe-job training. The majority of vacancies – 39.3 per cent – were in banks, 24.7 per cent in investment services companies, 16.9 per cent in insurance companies, 7.9 per cent in trusts and trust management companies, 6.7 per cent in insurance intermediaries and 4.5 per cent in financial institutions. Almost a quarter of companies (22.9 per cent) have skill gaps in their current workforce with the highest incidence in insurance companies. The skills which most needed improving were compliance skills, fund administration skills and general regulatory requirements. While 42.4 per cent resorted to a more extensive range of recruitment channels, a third solved the issue by recruiting from overseas. A number of companies also turned to training. The majority of respondents either funded or organised off-the-job training for their employees over the last 12 months. The results indicate that the majority of off-the-job training goes to employees within managerial and senior managerial positions and within professional positions. The council made a number of recommendations, the most specific being the provision of further training for fund/client
10 HARD-TO-FILL OCCUPATIONS
COUNT
WORKFORCE UPDATES
Financial controller
7
49.4% have no current vacancies
Business development manager
5
78.6% claimed to have hard-to-fill vacancies
Risk &/or compliance officer
5
22.9% have skill gaps in their current workforce
Head of risk &/or compliance
4
Internal auditor
3
Financial analyst
3
Insurance accountant
3
Portofolio manager
3
Senior front-end/back-end development/software manager
3
administrators, accountants and positions related to compliance – although it noted that further studies may be required to verify this. It also highlighted the importance of work placements, internships and apprenticeships within the financial service industry.
“With exposure to work in the financial service industry during student years, such candidates become equipped to make better career decisions and thus to perform better later in their work life. “... A common recruitment strategy adopted by organisations with hard-to-fill vacancies is to re-
cruit people outside of the Maltese jurisdiction. International internships may play a crucial role to mould experts in specific fields of the financial industry, especially in the case of highly specialised work and especially for the longerterm internship programmes.” The council also saw a larger role for industry professionals as mentors. “Professionals who are experts in the field of financial services have a wealth of knowledge on the practical, operational side of the industry – which takes a completely different stance from the academic point of view. In such a technical-
oriented industry the practical elements of education will provide an insider’s guide to those who will later be launched into the working environment, thus providing the best of both worlds. “In its remit of a forum that promotes financial services as an attractive career option, the ECC can also help in the promotion of the idea among the professional community to impart expert knowledge. This might also be an initiative that can be particularly interesting for those experts who are moving out of the industry on early retirement schemes or some other process,” it said.
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e Business OBSERVER | July 2, 2015
NEWS
TNT service instant success The dedicated TNT flight to Malta which started operating a few weeks ago has been an instant success, with the company already considering upgrading to a larger aircraft, according to the managing director for TNT Associates, David Burton. The Boeing 737 started operating five times a week to TNT’s aircargo hub in Liege, Belgium, whose central location enables the vast majority of shipments to reach their destination the next day. The service will eventually come and go via Tunisia, and although it has no traffic rights between the two countries, Mr Burton said the demand for space would grow. “We believe that the markets will justify the investment as there is sufficient business being generated to and from Malta,” he said. It is the first time that TNT has put a dedicated aircraft to serve the requirements of an associate. C&C Express Ltd, a subsidiary of Cassar and Cooper, has been TNT’s associ-
ate for 28 years, one of around 170 looked after by Mr Burton. Most of the associates – around 100 – are small companies which handle deliveries in the far-flung corners of the world, making Malta one of the largest in Europe, where most operations are directly owned by TNT. “The service offers an important alternative to the distribution model based on road freight via Sicily or Italy,” he said, pointing out that many customers often want next day delivery, whether pharmaceutical companies or industries wanting spare parts. The past weeks have been interesting for TNT, which is the target of a $4.8 billion bid from American company FedEx. A few years ago, a bid by European rival UPS was unsuccessful because it raised competition issues but the FedEx bid is seen as being more complementary. “FedEx is very strong in parts of the world where TNT is not so
strong, so on paper, it is an easier fit,” Mr Burton said. Last year was a difficult one for TNT, which saw its revenues drop 3.2 per cent to €6.7 billion, resulting in a loss of €190 million, mostly on the back of high restructuring costs and one-off charges. The company has responded to challenges by cutting the workforce by 1,450, and drafting a strategy based on a four-year investment programme which saw €190 million in capital expenditure last year, aimed at making
the company sustainable within three to five years. The flight to Malta is part of a series of service improvements and investments made by TNT under its Outlook strategy to improve its delivery service to customers. In recent months, TNT also added Tel Aviv, Venice and Hannover to its air network and added additional road connections to Turkey and the Balkans. “The UPS issue put us into suspended animation for over a year...
To an extent, we were just treading water as we could not really make any major investments. “When you are a global operation, it takes time to crank the machine up again – and restructuring also requires a temporary internal focus. “The upside is that we are now more aware of what we should not do. We know that we need to maintain the focus on business as usual, without getting drawn too much into the inevitable discussions that will ensue.”
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e Business OBSERVER | July 2, 2015
INDUSTRY FOCUS
Average office occupancy cost €550 per square metre The occupancy cost of the average office in Malta is around €550 per square metre annually – putting the island on par with Milan and Munich, according to research conducted by Cushman and Wakefield Research. London’s West End is the most expensive at €2,122 per square metre annually, followed by Hong Kong Central and Moscow Russia at €1,432 and €1,092 respectively. Malta has similar rates to those ranking in the 20th place out of the list of 67 countries: Istanbul in Turkey, Milan in Italy and Munich in Germany, Frank Salt Real Estate’s commercial division manager Rita Schembri explained. “This is as a result of the limited land we have in Malta which drives up the cost of purchasing adequate sites for office space,” she said. With some 5,000 companies being added every year, the demand for office space is clearly growing – but with so many expatriates em-
ployed in the majority of these new firms, preferences have changed. The Maltese would traditionally seek office space inland, meaning San Ġwann, Naxxar, Mosta, Birkirkara and Żebbuġ - where prices and rents were cheaper and
parking and commuting were easier, she explained. “But offices in Sliema/St Julian’s are now the most sought after, fetching the highest prices – particularly if they have a seaview. Foreigners and young people generally wish to
remain within walking distance or a short commute to and from work and they also prefer to live and work close to the main entertainment hub,” Ms Schembri said. Purpose-built complexes fetch the highest rates, especially when
one factors in CAM charges (Common Area Charges). They however offer the best option for a trouble free rental. However, there are not that many available. Robert Spiteri Paris, the head of letting at
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INDUSTRY FOCUS
Perry, said that with Portomaso and Tigné fully occupied, they were struggling to find quality office space. “At the moment we are lucky as we have a number of small office blocks to fill the current gap but a crisis is looming. Thankfully investors and property contractors have realised the potential of office space and considerable investments are being made. But the larger blocks cannot come soon enough,” he said. It is not only the location preference which has changed. Companies are rarely willing to squeeze their offices into a residential layout – but with technology, even more flexibility is being sought. Work has gone from being paper-based to being digital but with technology, the options are no longer just open plan or cubicle or even hot-desking, but whether to be in an office at all. This is certainly uppermost on the minds of developers like Exalco, which is currently constructing the Golden Mile Business centre in St George’s Bay. Managing director Alex Montanaro said that it is certainly beneficial to conclude contracts with agents or tenants before finishing works are completed. “You have to adopt a flexible approach, and ensure that if tenants want spaces tailored to their specific requirements, this can be done,” he said. Although in an ideal world all the tenants would be signed up before work even started on an office complex that is rarely possible. “What we do is leave spaces with all the basics in place so that when a new tenant comes, we only need to tackle their specific requests,” Mr Montanaro said. Designer Vera Sant Fournier, creative director at VSF, is also an advocate of careful design – stressing that this was not just about aesthetics as professionally designed establishments create happier working environments for the staff – and in turn a more prosperous business.
“When we look at designing a commercial outlet we must firstly take the laws and regulations in consideration, good traffic control, appropriate access to all areas, security and safety. Look at the nature of the business and together with the client and the staff research what they need to be most proactive in, how you can make the work flow better. “Designing office spaces means strategically placed printers, stationery and storage among a few key points. “Lighting is of extreme importance as extra glare or a sickly white light causes the staff to feel tired and may also cause unhealthy work conditions if they are looking at a computer screen all day, putting too much stress on the eyes,” she said. The latest trends in office design do not only affect layout but also furniture. Brands International chief operating officer Anthony Mercieca said that the need to
DID YOU KNOW? The term hot-desking is thought to be derived from the naval practice, hot racking, where sailors on different shifts share the same bunks. Source: Wikipedia
“It is very important to understand the exact requirements and environment of the company in question”
balance the needs of people, environment, design and technology has greatly increased. “It is very important to understand the exact requirements and environment of the company in question. First and foremost, the role of an office furniture provider is a consultative one, as there are so many systems and technologies on offer. Secondly, it has become a priority to focus achieving a comfortable home-like environment within the office. “We spend most of our day here, so being in an environment which makes you feel comfortable is as important psychologically as is the importance of sitting in an ergonomic chair for your physical health. Creating an environment which is aesthetically pleasing and has good functional design ultimately results in higher productivity and reduced stress levels,” Mr Mercieca said. He also stressed that the fundamentals have not changed as
dramatically as articles about hotdesking and paperless offices would have us believe. “The reality is that no office can be 100 per cent paperless, so storage solutions are still a big priority for our clients. Also, although there are more open space offices, there is still a need for certain levels of privacy and excellent acoustic properties, as distractions do tend to arise in such setups. Consider the right type of partitioning, or at least ensure that there is an area where private discussions and team gatherings can take place effectively. “Needless to say, this can always done in a way that ensures the overall company objective and style that the particular client is after, to ensure a coordinated and functional look and feel,” Mr Mercieca said. One thing that most office developments now offer as standard is a robust IT backbone. Michael Bugeja, the head of telecommunications and ICT at Tektraco Ltd, stressed that 24/7 connectivity and data availability was crucial to companies of all sizes: “Security, manageability, mobility and remote access, scalability and reliability are common features for most offices. After all, everyone has the same aims: to achieve a more productive work environment while minimising costs, to do more with less.” The shift to digital systems means that voice, wired & wireless data networks, IPTV, CCTV, access control and other systems communicate over a common network infrastructure using Internet Protocol (IP) technology. “There are a number of other key benefits that an IP converged system can offer, ranging from fast and cost-effective initial network deployment to a better overall network reliability,” he said. “Companies that use these smart technologies will not only increase their productivity while minimising their costs – resulting in improved customer satisfaction – but will also have an edge over the competition,” he reassured.
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e Business OBSERVER | July 2, 2015
INTERVIEW
From litres to square metres It is not hard to understand the rationale behind the Farsons Group’s decision to hive off its property to another public company. Perhaps one of the things that might be overlooked, however, are the ties that the founding families still have to the building and its surroundings. “We – myself and the board – have strong emotional ties to the original brewery built in the late 1940s– and not just because my father built it. When I started working here, there were no other buildings either in front or behind us!” group chairman Louis Farrugia said. In the late 1970s and early 1980s, the group bought most of the land to the south and eventually decided to rethink the production site. “The plant and machinery layout in the 1950s were set in a linear mode, starting with the empty warehouse to the west side of the building; the production area occupied the centre of the building and the full product warehouse to the east side. In the late 1980s, we commenced a renewal programme with a new fermentation block development that took place to the south of the main building,” he said. Eventually, the time came to find a new use for the original building, and the board did not take their responsibility lightly. “It is an inspired place of art deco architecture we are justifiably proud of. We have always recognised its architectural importance and we always knew that we would be challenged to find a use for an asset like this. Knocking it down was obviously never an option and in 2011, quite understandably, Mepa scheduled the façade and old brewhouse,” he said. The group first looked at what other retired breweries in town centres abroad had done. It then launched an international competition for design ideas from architectural firms based on using the building and space in a commercial
FARSONS’ NEW BREWHOUSE
ARCHITECT’S PLAN AND DETAILS IN COLOUR
“e targets are ambitious: exports currently represent about 10 per cent of the brewery turnover and the group’s aim is to treble this within five years”
role – anticipating the growth of the services. “We attracted some very-wellknown international firms. Finally we awarded the work to Ian Ritchie, who is a very-well-known UK based architect with an outstanding international reputation,” Mr Farrugia said. The business park stretching along the main road represents a €42 million investment, and will result in seven blocks of five storeys each, with six gardens in between, retaining the impressive facade. The net result will be 18,000 sq.m. of office space, with a mixed use area, food and beverage outlets, offices, a ‘sky bar’ and a visitors’ attraction – not to mention over 700 car parking
spaces. The group also intends to create a green building, maximising the possibilities of using natural ventilation. There are two important aspects to the development: the group will be looking at various financing options, as well as the spin-off to another ‘plc’; and its role in the context of Mrieħel. The spin-off of this project and other property assets into a separate ‘plc’ is scheduled to take place around June 2017 and the shareholders will receive the equivalent number of shares in the new entity that they own in SFC plc. It will be up to them whether they retain or sell them. The group is also considering a rights issue as well as other methods of funding.
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INTERVIEW
Mr Farrugia explained the rationale behind the spin-off: “It is difficult to manage a board of directors responsible for two diverse businesses such as our food and beverage sector and the management and development of a property portfolio without losing focus on some essential aspects of each of the business sectors. “So we decided to create a separate and dedicated ‘plc’ to look at this development and other property assets, with its own focused board to administer these important assets. It is interesting and exciting and could also be rewarding for our current shareholders. “We could also be considering an international partner with experience in property development who would be interested not just in this development but possibly others too,” Mr Farrugia said. “We have been accustomed to think in litres and not square meters so we may indeed need to look for these skills.” Mr Farrugia also wants to boost the Mrieħel context: over the past 40 years that he has worked in the area he has seen its transformation from an industrial area to a commercial area. “Well-known firms have been voting with their feet and have moved here, as they find it very central. But a workable, long-term master plan for the Mrieħel area is important if we wish to encourage future investment in the area. If businesses want to attract the best employees, the environment in which they work is an important consideration. “We have been lobbying the authorities to work towards this and have presented some ideas to Mepa,” he said. Can commercial and industrial activities coexist comfortably? He certainly thinks so. After all, Farsons itself will have a new beer packaging facility linking to the production facilities built in the last 10 years. The new beer packaging facility is the latest in a string of investment decisions prompted by Malta’s EU accession. Mr Farrugia believes that these decisions were the right ones. “It is clear that our Farsons beers have fared well despite the intense competition, so much so that we are now embarking on this important investment in the packaging hall, taking the bold step of promoting our brands internationally.
LOUIS FARRUGIA
“We are always open to new business ideas” “One can already discover Cisk and other Farsons beers in parts of Rome and Milan but with this new facility we aim to make our produce more attractive to other foreign markets,” he said. The targets are ambitious: exports currently represent about 10 per cent of the brewery turnover and the group’s aim is to treble this within five years. “Through this investment, we feel better placed to take up the challenge. We are a Maltese owned and managed industry and our aim is to establish Maltese brands on the international scene. Not so long ago, people would not have given us a chance but we believe in the quality of the products we can offer other markets.” However, competing from a base in Malta has obvious disadvantages, he said. “We have to cross the sea to penetrate other markets. We know that cargo handling charges are high due to dated and costly practices. It has been an issue for as long as I can remember. “Ironically, shipping costs to sell our product in China are almost the
same as it costs to send them to Sicily given the fact that containers to China tend to return there empty,” he lamented. Competition has affected not only the local production but also the group’s imports. The chairman believes that the playing field is not quite level – with illicit cross-border trade where taxes like excise tax, eco-tax and VAT were not being paid. The situation, at least for wine, has been improved through the imposition of the highly-visible banderols. “There have been some other government initiatives to control abuse on other beverages too but the authorities can never rest assured that such abuse will abate,” he admitted. EU accession had also prompted the group to go into food distribution, he said. “We wanted to ensure that we would not just defend our market share of beverages in an open market but could also look at where else we could participate, given our distribution network and marketing skills.
“As a board we had to get to know this business. Obviously, our chief executive officer, Norman Aquilina, came from this sector and knows it well.” The group represent some wellknown brands such as Walkers, Tropicana, Quaker Oats and Danone – but it recently lost representation of a number of well-known brands when a multinational consolidated its portfolio with another local group. “Obviously when one suffers a setback, one moves on within the realities of the market. So when the right opportunity arises, one has to take it,” he shrugged. Food Chain Holdings has also been seeing changes to the market – although in this case driven by social changes. With more and more home delivery services introduced and the first drivethrough opened by the subsidiary, it seems our lifestyles are now so busy that we don’t even have time for fast food. But fast food brands are also under pressure to offer healthier options.
“Fast food brands will need to take stock of society’s concerns. They will, I believe, respond in time – just as we did with Kinnie Vita, which has half the sugar content and no artificial sweeteners,” he said. FCH has runs the Burger King, Pizza Hut and KFC franchises for a while. Is it looking for other franchises? “We are always open to new business ideas,” he said. “We went through some organisational issues but now that we have sorted them out, we are expanding again.” The nature of the group’s business means it does business with hundreds of outlets, and he sees the accumulated impairments of €2.5 million to be a fairly prudent provision, given the group debtor total of €25-30 million. It went up by €425,000 in 2014 because of the collapse of More Supermarkets. The Malta Association of Credit Management is asking for changes to the law to tighten up the appointment of directors and the monitoring of companies that have red flags: Mr Farrugia said that this was something he would definitely support. “I think when you become the director of a public-interest entity, there are codes and principles that you need to conform to,” he said. “We will never be able to stamp out fraud completely... However, both More Supermarkets and Price Club were a wake-up call for the private sector and businesses in general: that forming a company and being a director comes with responsibilities,” he said. However, he is clearly aggrieved that the Price Club case fizzled out so unsatisfactorily: the Appeals Court decided in 2010 that the three directors of the bankrupt supermarket chain were personally liable for the debts incurred. “We took the time and effort to go to court over Price Club – when 200 creditors were defrauded of some €20 million. This was a civil action by private entities and the decision taken by the Court should have been followed up by a national investigation. In the UK, when a company is clearly not living up to its responsibilities, and not declaring that it cannot pay its creditors, normally there would be an investigation if fraud is suspected.”
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e Business OBSERVER | July 2, 2015
CASE STUDY
Companies need exit strategy
There have not been many management buyouts in Malta – but Mazars Malta managing partner Anthony Attard thinks there should be many more. The problem, as Mr Attard sees it, is that so many people in Malta set up businesses and nurture them, but are then reluctant to let them go. “It is not yet part of our culture to set up a business with an exit strategy already in mind. Quite the contrary. We still consider mergers and acquisitions to be a sign that our companies are under threat, rather than that the whole might be greater than the sum of its parts,” he said.
One of the main reasons for this is that so many of the companies in Malta are familyowned, with a founder who tends to remain involved even when the next generation has taken over. Mr Attard believes that this model will have to change as it is no longer a foregone conclusion that children will even want to get involved in the family business, now that they have so many more options. “We need to change that culture and realise that we should be open to the idea of mergers and acquisitions, or even management buyouts. And that the time
“It has been a phenomenal period, with double-digit growth year on year, reaching 25 per cent at one stage. e firm now employs around 50 people”
to do this is when the company is at its peak...” Mazars Malta is a great supporter of the concept of change. It was set up by Mr Attard and Paul Giglio as an auditing firm 16 years ago, becoming part of Mazars, a network of 15,000 professionals in 73 countries, five years ago. It has been a phenomenal period, with double-digit growth year on year, reaching 25 per cent at one stage. The firm now employs around 50 people. “At some point in time this growth curve is going to flatten. To keep that upward trajectory, we needed to change our model,” he said.
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CASE STUDY
Mazars Malta has been tweaking its operations from the start. Its clientele expanded from purely a local one to a 50/50 mix with foreign clients. Subsequently, auditing services were complemented by advisory services, and now represent less than half its revenue. The next step was to come up with a new strategy for the coming three years, creating ‘trusted business advisers’ supported by teams of experts not only in particular services like tax and compliance, but also in sectorial expertise aimed at insurance, financial services and gaming. This move will mean considerable investment in training and education – including of the four partners themselves. It is in situations like this that being part of an international organisation gives added value: they will be tapping into the Mazars University for assistance. And the teams will also need to grow, with recruitment underway of specialists at executive and managerial levels. Times have changed since Mr Attard and Mr Giglio set up their company. The auditing profession around the world has been hit by major scandals like Parmalat and Enron, which forced audit firms to review their practices and adopt self-regulation. There have been a number of attempts to bring about more accountability and to prevent conflicts of interest – the latest being a curb on the advisory services that a firm can offer to a public-interest client, for which it also provides audit services. “Malta has become a financial services centre, with a significant amount of GDP coming from the gaming industry and from regulated MFSA sectors like investment services, insurance and banking. Reputation is critical to a jurisdiction. So the role of the auditor is more important than ever,” he said. “Bad business, fraudulent business or businesses that go bust without warning will tarnish our reputation.” But in spite of the role of the audit firm as a pillar ensuring the integrity and good governance of business, there are moves in parallel to reduce the need for audit services – for example, for small businesses. Mr Attard is not quite convinced that this is the way forward, concerned that clients see audits as a cost and an obligatory burden, rather than as a value-added service.
ANTHONY ATTARD, MAZARS MALTA MANAGING PARTNER.
“Many people would not have audits given the choice, especially smaller ones where they do not feel that there is as much public interest,” he said. “And yet it is often these very same SMEs and owner-managed businesses (OMB) who do not have in-house expertise to cope with all the regulations. They may not want an audit but there is no denying that they really tend to trust their auditors. We want to be able to use that trust to help them grow.” Indeed, although Mazars Malta is passionate about its role as an auditor, the firm realises that it makes sound business sense to be able to give its clients a more holistic service. “We want to be the trusted business advisers, able to service a business from A to Z,” he said, adding that this would cover everything from advice on tax to human resources. “And we want to encourage and support internationalisation, as we believe that there is a huge amount of untapped potential.” However, it is not all about successful clients. Mr Attard’s experience over the past 16 years has made him well aware of the pitfalls of failure and believes that there are some important lessons to be learned. One of these is a better understanding of the role of the directors, saying that although the vast majority have a good grasp of their basic legal obligations, others all too often assume that auditors or accountants shoulder much of the burden. “We have seen things improve considerably over the years,
“e next step was to come up with a new strategy for the coming three years, creating ‘trusted business advisers’ supported by teams of experts not only in particular services like tax and compliance, but also in sectorial expertise aimed at insurance, financial services and gaming”
thanks in no small part to the MFSA and other entities that have organised courses to explain directors’ roles. “There will always be some who are interested in the remuneration and have no intention of challeng-
ing the company’s operations or strategy. But thankfully we are seeing many more professionals – active or retired – who are being appointed as non-executive directors, and who understand their role as watchdogs,” he said.
The line between the directors’ responsibility and that of the auditors is also very controversial, especially when you start to consider whether the duty of care is only to the shareholder – the auditor’s client – or to a wider range of stakeholders. Following international audit failures, the profession had become defensive, but with time realised that it needed to review the situation. Now the code of ethics for auditors extends responsibility to all stakeholders like creditors, employees and even the Inland Revenue Department. However, in Malta, the legal obligations stop at the duty of care to the shareholder, as the court ruled in one particular case a few years ago. “Times change and we have had to change with them. We have had to embrace change as auditors and we have had to change our business model. Unless you change, you will start to stagnate. That is the last thing we would want for our clients. And it is the last thing we would want for ourselves,” he said.
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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every fortnight. Editorial Vanessa Macdonald, Head of Content (Business), Times of Malta.
EDITORIAL
Tourism: Quality versus mediocrity About three months ago, a tourism expert warned that Malta had reached saturation point in tourism, arguing that the island would not be able to handle more than 1.7 million tourists annually. Malta’s tourism authority chief has a different opinion. He holds the island can attract up to 2.8 million tourists annually if August arrivals are replicated in the remaining months. Tourism Minister Edward Zammit Lewis too believes that Malta can take more than 1.7 million tourists. The argument over how many tourists the island can take was raised yet again at a business breakfast organised by The Business Observer. There are two strong forces at play, those who believe the island can take more tourists than it is getting now and those who hold that Malta should go for quality tourism. It would have been better were the island to have one common goal. The side that calls for quality tourism, championed by Alfred Pisani, who heads the Corinthia Group, has the stronger argument, for clearly there is a limit to how many tourists a very small place like Malta can take. Can Malta draw up to 2.8 million tourists annually? It can, particularly if, at it has been argued, there are some places, such as Gozo, that can well take more tourists if their infrastructure is improved. But at what cost can this be done? It is already getting increasingly difficult finding trained staff to work in hotels and restaurants. How can the island possibly cope with a sharp rise in the number of tourists over and above what the island is drawing at present without jeopardising quality even further?
Even as the situation stands today, standards are falling, not rising. Environmental degradation of the worst kind is there for all to see, and in many places the prospects of reversing the situation is nil. To make matters worse, the country has a government that is threatening to make the environment even worse than it is already. With the high winds the country has been having lately, Malta at times appears like a dust bowl. Mediocre restaurant service, excessive noise, clutter, dirt, and chaotic traffic are steadily damaging Malta’s image as a tourist resort. If the island keeps going for numbers, as it is doing now, the likelihood is that standards will continue to fall, making Malta a thirdrate tourist destination. Is this the way we want to go? Most will say definitely not, which is why Alfred Pisani’s argument is stronger. It most certainly is wise for Malta to go for quality tourism but the way ahead is long and strewn with difficulties, mostly arising from a mentality that goes for grabbing what is available today without giving a thought for tomorrow. Going for quality is not something that can be done overnight. It is a process that requires change in the country’s mindset, a change that the island would need to work hard at all the time until we reach the required benchmark. There may be room to “improve” further the tourist arrival figure, as the minister has put it, but, again, there is ultimately a limit to what the island can draw, and that limit is not very far off from what we are getting today. Is it not therefore better to think ahead and start working for higher quality all round now? In reality, Malta has no choice for if it does not go for quality, the alternative is greater mediocrity.
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BUSINESS OPINION
Pensions review and retirement age
Philip von Brockdorff The recent review for social security pensions lays down a number of proposals aimed at (a) social needs and issues related to society and work (b) the sustainability of the pension system (c) encouraging saving up for private pensions and (d) the problems faced by those who are already pensioners. The pension review rules out an increase in the statutory retirement age beyond the present 65, and also rules out increasing social security contributions, presently set at 10 per cent for both employee and employer. Second-pillar pensions – paid by employers and employees – are not recommended either. The foremost objective of this review was to provide evidence that the pay-as-you-go pension scheme can be sustainable in the long run. Evidence of financial sustainability with the existing system would demonstrate that the European Commission’s insistence to raise the retirement age to reflect changes in life expectancy is not required. The evidence is largely dependent on the assumptions used in the model used to project expenditures.
Assumptions such as GDP growth, labour productivity and population projections are critical in terms of the reliability of projections. The strategy group relied on Europop 2013 for population projections, which are significantly different from previous ones when population growth was expected to slow down. The more recent projections show Malta’s population will continue to rise, increasing the working age population and therefore easing, somewhat, the dependency burden – with it becoming critical around 2040 and beyond. This is significant in that it demonstrates that Malta’s population profile is also changing because of net migration, projected around 1,400 annually in the model. Given the growing uncertainty in North Africa and elsewhere in the African
continent, as well as the free movement of persons from the EU, it is perhaps not unreasonable to assume that net migration could reach the 1,400 mark in the future. Further increases in the working age population could, in theory at least, also help mitigate the demographic ageing process. The strategy group believes that State pensions will remain an important source of income for future retirees, but given that financial sustainability was a key objective, they recommend that it should not be the only one. There can be no doubt that with pension benefits remaining virtually at existing levels, future retirees will increasingly need to resort to private pension schemes to receive an adequate retirement income during their nonworking years.
The recommendation by the strategy group for a behavioural change to increase the take-up of voluntary pensions is nothing extraordinary and clearly is not an option for most future retirees. With changing lifestyles and a disposition to consume and save less, this option can only be viable for a small proportion of the population. Incentives such as tax credits are necessary to influence people’s behaviour but this will benefit higher income earners – leaving lower income earners reliant solely on State pensions. Given that second-pillar pensions are being ruled out, a policy which provides tax incentives for high income earners to supplement their retirement income while low income earners (who cannot afford voluntary pensions)
will rely solely on State pensions means an increasing number of elderly people would be at risk of relative poverty. The proposal to extend the guaranteed national minimum pension to older people – by addressing the most vulnerable pensioners first – is a step in the right direction with persons who would be 76 or older on January 1, 2016, starting to receive the guaranteed national minimum pension next year and with more elderly people becoming eligible gradually by 2027. The proposal to encourage people to work beyond retirement age is also commendable. Those entitled to retire between the age of 61 and 65 could improve their pension by up to 12 per cent if they continue to work and forego their pension while they do so. Pensions could be improved even further if people keep working without receiving a pension beyond the age of 65. Equally the proposal to give credit to those who stop working to take care of their children or for further studies is fully compatible with active labour market policies. As in any review, the success or otherwise of proposals will be demonstrated during the implementation phase (assuming these are all taken on board by government). Equally important is whether the projections are robust enough to convince the Commission to withdraw its recommendation to increase retirement age to reflect life expectancy. Philip von Brockdorff is the head of the Economics Department at the University of Malta.
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APPOINTMENTS
Pisani made MIH director Joseph Pisani has been appointed as non-executive director of Mediterranean Investments Holding plc, replacing Yousef Abdelmaula. Mr Pisani is a founder member and director of the main board of Corinthia Palace Hotel Co. Ltd (CPHCL), and has served on a number of boards of subsidiary companies including that of International Hotel Investments Plc (IHI), since 2014. Since 2000, he has served as chairman of the monitoring committee of CPHCL and IHI.
New principal at Deloitte Malta Deloitte has appointed Giselle Cini to the position of principal. Ms Cini has been a key player in the development of the firm’s accounting and auditing technical department, specialising in the accounting treatment of financial instruments and providing technical support and advice on IFRS-related matters.
Ganado Adovates new managing parter Max Ganado (right) has retired as managing partner of Ganado Advocates, with Louis Cassar Pullicino (left) taking his place. Dr Ganado has held the position for six years. He will now take up the position of senior partner in the firm with a mix of duties, some professional and others relating to strategy. Dr Cassar Pullicino specialises in commercial litigation, in particular, admiralty and shipping disputes, banking, corporate disputes and insolvency, insurance and contractual disputes with an international dimension.
Council for Malta-Libya chamber Abdussalam Danaf has been appointed as the president and general secretary of the Libyan Maltese Chamber of Commerce for a two-year term. Frank Farrugia has been elected vice president and Tonio Casapinta as treasurer, with members Hugh Arrigo, Ezzedin Beleed, Liz Barbaro Sant, Mohamed Sweidan, Anthony Micallef, Salem Remalli and Mustafa Shembesh. www.libyanmaltesechamber.org.mt
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e Business OBSERVER | July 2, 2015
STOCK MARKET REVIEW
THE MAPFRE MIDDLESEA, SPONSORS OF THE J70 MED CUP: THE SHARE PRICE OF MAPFRE MIDDLESEA IS THE TOP PERFORMER SO FAR IN 2015.
Bullish sentiment across equity market during H1 Edward Rizzo There was an unexpected rally in Q1 with the local equity market climbing by 13.4 per cent on the back of double-digit gains in 12 of the companies listed on the Malta Stock Exchange. The MSE Share Index posted a marginal decline in April but the rally then gathered momentum during May and June to close the first six months of the year with a surprising increase of 22.8 per cent. While the theme during the first three months of the year was the “search for yield” with investors turning their attention to the equity market for an improved income return following the significant decline in yields across the sovereign and corporate bond markets, the rationale behind the upturn during Q2 was mainly related to company specific developments. In fact, the three top performers in Q1, namely Malta International Airport plc, Plaza Centres plc and Malita Investments plc, all lost their ranking on the podium as they were surpassed
by Mapfre Middlesea plc, Medserv plc and International Hotel Investments plc. The share price of Mapfre Middlesea is the top performer so far in 2015 with an increase of 83.6 per cent after the equity jumped by 60.1 per cent during the second quarter of the year. This sudden surge must have caught many analysts and investors by surprise. The upturn in the share price materialised on weak volumes reflecting the very low free float of the company and – more surprisingly – with no obvious fundamental justification. Shortly before the sudden increase in the share price, the company confirmed speculative reports in the media that it will be taking over the general insurance portfolio of Allcare Insurance which had reportedly faced financial difficulties. No details have as yet been forthcoming by the company on the cost to acquire this portfolio, the size of the portfolio and the likely benefits that could accrue. Medserv ranks as the second best performer during the first half of 2015 with an increase of 62.4 per
cent. Following the 31 per cent increase in the share price during Q1, the equity advanced by a further 24 per cent during the past three months. While the positive performance during the first three months was due to market expectations that the company will match the forecast of €2.2 million in pre-tax profits during 2014 (in fact Medserv reported that pre-tax profits exceeded projections and amounted to €3 million), the rationale for the Q2 rally was presumably as a result of a combination of two factors, namely: (i) investors sought to gain entitlement to the dividend following the recommendation on March 23 of a final dividend of €0.056 per share to those shareholders on the register as at 28 May and (ii) the publication of the Financial Analysis Summary on May 15 indicating that the directors of the company forecast pre-tax profits in 2015 to surge by a further 43 per cent to €4.4 million. The share price of International Hotel Investments plc advanced by 22.6 per cent during the first quarter after the surprise announcement in
“e three top performers in Q1 ... all lost their ranking on the podium as they were surpassed by Mapfre Middlesea plc, Medserv plc and International Hotel Investments plc”
mid-January that it agreed to acquire Island Hotels Group Holdings plc for a combination of €1 per share in cash and 0.246 IHI shares for each IHG share through the issuance of nine million IHI shares to IHG shareholders (although IHI recently revealed that IHG shareholders will also be offered an all-cash alternative). After easing slightly during April, the equity began to rally once again in May and continued throughout the month of June after the company published its annual report wherein the chairman indicated that the company is in discussions with the Malta Financial Services Authority to offer alternative financial instruments to the free-float shareholders. However, to date, no specific details have been provided to the market including the possible timing for such a corporate action. Despite the slight decline in the last few days of June from its multi-year high of €0.93, IHI’s share price climbed by 22.5 per cent in Q2 resulting in a year-to-date appreciation of 50.3 per cent. The other notable strong performers in the last three months
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STOCK MARKET REVIEW
were Simonds Farsons Cisk plc (+40.6 per cent), RS2 Software plc (+32.9 per cent), Midi plc (+25.2 per cent) and Go plc (+18.9 per cent). The gains registered during Q2 helped all these equities rank among the strong performers during the first half of the year. The share prices of these four companies all increased following company specific developments. Similar to Mapfre Middlesea, the shareholding structure of Farsons is also very tight resulting in a low free float. In fact, the rally in the share price took place across very weak volumes following the announcement of another record financial year during the 12 months ended January 31, 2015, and the publication of the initial designs of the Farsons Business Park. Construction will commence next year ahead of the property spin-off taking place in July 2017. The share price of RS2 Software continued to race to new record levels after the company announced that it signed a licence agreement in Vietnam and that it intends to intensify its efforts to penetrate the Asian and US markets possibly also by conducting an acquisition in the region. The 2-for-1 share split in mid-June could also be one of the reasons for the sharp rise in recent weeks. Meanwhile, Midi plc advanced as the company confirmed that it is still in discussions with various third parties who have expressed an interest to invest in the Manoel Island project and that the financial performance for 2015 will be positive as a result of the final deeds of sale being entered into for the 39 apartments branded Q1. Go’s share price also accelerated to a fresh eight-year high following the announcement of the property spinoff taking place later on this year once shareholders approve the corporate action and a number of related changes to the company’s memorandum and articles of association during an extraordinary general meeting taking place on July 22. Although the share prices of the three retail banks posted a mild positive performance during the
“e next few months could undoubtedly prove to be more volatile following the significant rally across most equities during the first six months” past six months, these have clearly underperformed the wider market rally, possibly on increased awareness of the challenges being faced in the banking industry mainly related to more stringent regulatory requirements. While the equity market seemed to have attracted most attention in the past six months, the bond market also had exciting moments. The extraordinary rally during the first three months of the year continued until mid-April but bond prices then began to decline sharply reflecting similar bond market movements evident across the German bond market as well as in other eurozone nations. The start of the QE programme by the European Central Bank in early March resulted in a significant decline in yields (and price hikes) in the euro area with the benchmark 10-year German bund yield dropping to a low of 0.05 per
cent on April 17. However, the relentless fall in yields came to a sudden halt after data revealed stronger eurozone economic figures, improved credit conditions as well as inflationary expectations with the result that the 10-year German bund rallied to a high of 1.059 per cent on June 10 before easing back towards the 0.8 per cent level. The movements across eurozone bond markets impacted the Malta Government Stock market. In fact, longterm MGS prices (those with more than 10 years left to maturity) have declined by more than 11 per cent since the peak in April bringing the year-to-date performance of the Rizzo Farrugia MGS Index to a mere 0.9 per cent from 6.6 per cent on April 16, 2015. While many market participants may have thought that the Central Bank of Malta may find it hard to adopt QE in Malta given the high
levels of liquidity among both institutional and retail investors, statistics indicate otherwise. In fact, in its regular communications to the market on the progress of the QE programme, the ECB announced that after a weak start with only €5 million purchases of MGS during March, the momentum accelerated in April and May and the Central Bank of Malta acting on behalf of the ECB succeeded in acquiring €53 million and €85 million respectively during these two months. Statistics during the month of June are not yet available. However, given the market volatility in recent weeks, it will not come as a surprise that the Central Bank’s QE desk once again exceeded its monthly quota of €36 million in MGS purchases. The next few months could undoubtedly prove to be more volatile following the significant rally across most equities during the first six
Rizzo, Farrugia & Co. (Stockbrokers) Ltd, (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2015 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved
months as well as the wild swings in the bond market. The interim financial reporting season commencing in a few weeks will dictate the direction of many individual equities in the short-term while MGS prices will continue to move in line with bond market developments across the eurozone. Trends will also be impacted by the fluid developments in Greece as well as economic and inflation data across the larger eurozone economies. On the primary market, a higher number of corporate bond issues should be expected in the second half of the year. This should assist retail investors in placing some of their idle funds given the continued high levels of liquidity across the local financial system.
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BUSINESS UPDATES
SolarCool™ heating and cooling – clever, green, clean innovation An innovative cooling and heating technology, which operates using solar thermal renewable energy, has recently been launched in Malta. This unique technology can save up to 70 per cent of electrical consumption, making it the most efficient cooling/heating system in the world. Facts show that the hotter the temperature gets, the more efficient this system becomes! SolarCool™ works across all aspects of air conditioning, from small residential systems to large industrial VRFs and chillers. SolarCool™ has been tried, tested and proven over the last six years across five separate continents in over 50,000 installations, and
has achieved unbeatable results in many different weather systems across the globe – from New York fire stations to South African car showrooms. Since its launch, SolarCool™ has enjoyed rapid success in the ever growing energy-efficiency market, with further systems scheduled for installation over the next couple of months in Gibraltar, Morocco, France, Portugal and Malta. SolarCool™ was introduced into the European market via SednaAire UK Ltd, appointing Modern Refrigeration Ltd to service the local market. For more information visit www.euromed.company or call 2180 4474.
SOLARCOOL™ SYSTEM AT THE BRITISH MILITARY DEFENCE IN CYPRUS INSTALLED IN COLLABORATION WITH MODERN REFRIGERATION LTD IN 2015
Delivering online shop solutions As a business, you typically have two options when setting up an online shop: pay a few thousand euros for a completely custom set-up or find a template-based solution for the masses and good luck setting it up, maintaining and promoting it yourself. This is why after six years of developing web-shops in different countries and various sectors, at Websuccess Co. Ltd we finally asked: “In our clients’ position and an ideal world, what is the best possible solution we could ever hope for?” The answer was simple: “An online shop solution set up and maintained by a specialised team of professionals, based on the needs of the company and designed around the brand, with the possibility to manage it from my end.” Websuccess created exactly this, and it was an instant hit. Businesses like yours can now get their products in front of the world quickly, without hassle and at an absolutely minimal cost. Get your free demo at websuccess.com.mt/shops.
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BUSINESS UPDATES
Il-Barri: a multifunctional venue
Negroni Week 2015 Negroni Week is a week-long charity initiative created by American magazine Imbibe in May 2013. It aimed at celebrating one of the world’s great cocktails while raising money for charity. Negroni Week taps into the rise in popularity and demand of the classic Negroni – an iconic mix of gin, Campari and sweet red vermouth created by chance in Florence in around 1920 by Count Camillo Negroni. In its inaugural year, Campari served as an event sponsor, seeing more than 100 bars around the world donating a portion of every Negroni sale to the charity of their choice over the course of the week. In 2015, Imbibe and Campari worked together for the third year in
a row and officially took this year’s project to an international scale from June 1-7. To help the on- and offtrade channels get involved in the initiative, as well as target consumers, Campari invested in a 360° marketing campaign: ‘A drink for your cause, make it count’, including PR, POS, display and social media to ensure maximum reach while playing on Campari’s historic figure. For the full list of outlets that participated, visit facebook.com/CampariMalta. Over €1,000 was collected during the entire Negroni Week event, and was donated to Hospice Malta. Campari is marketed and distributed by Farsons Beverage Imports Co. Ltd. Trade enquiry 2381 4400.
Situated in the spacious Mġarr piazza, il-Barri Restaurant is a family-run business now in its third generation. Housed on three floors each with different decor, the restaurant lends itself well to private functions, business lunches and product launches, where clients are offered exclusivity and customised packages to suit individual customer requirements. The hall on the first floor commands beautiful views of the Mġarr church and surrounding countryside. Seating up to 120 patrons, it is ideal for staff dinners, private functions and family get-togethers, as well as product launches and seminars, for which the use of a large screen projector and sound system can be provided. The ground-floor level offers contemporary decor coupled with amazing scenes of the Mġarr countryside, making for a relaxing and enjoyable dining experience. Locals popping in for a cup of tea and a bite to eat make the ambience rural and informal. The floor beneath is rustic in its decor, offering a more intimate and warm atmosphere. The team at il-Barri take great care in selecting local fresh produce. Their speciality is the Maltese fenkata. Starting off with a
variety of Maltese appetisers such as snails, home-made bigilla, peppered cheeselets and water biscuits, these are followed by a generous plate of spaghetti with rabbit sauce. Rabbit, which can be fried or in a wine gravy, is served in the traditional way with baked potatoes and fresh vegetables. Other Maltese specialities are the braġjoli
and horsemeat, while also on the menu are grills and fresh fish. Il-Barri Restaurant is open for lunch from Tuesday to Sunday between 12pm and 2.30pm; and for dinner from 6pm onwards every day. Phone: 2157 3235, mobile: 7961 7744, e-mail: info@il-barri.com.mt. www.il-barri.com.mt
Generate new business by organising an innovation day We are currently living through a transition from an information society towards an innovation society, where the rapid generation and take-up of ideas is at the core of business and economic growth. Increasingly, managers, executives and specialists are looking for new marketing techniques and new ideas to develop new products and services. We firmly believe that innovation will help to turn many of these challenges into major opportunities. Creolabs can organise an innovation day for companies and organisations that want to explore new business opportunities. Our innovation day is directly focused towards companies that want to improve team building, generate new ideas and ultimately generate more business. It is composed of practical training sessions and workshops that will give your company or organisation a better competitive advantage by turning challenges into business opportunities. Participants are organised into teams of not more than five, which are facilitated to generate ideas for new products, services and solutions. Creolabs’s mission is to train and expose companies to creative thinking, team building, invention and innovation through its creativity tools. For more detailed information about Creolabs services log on to our website on www.creolabs.com.mt
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BUSINESS UPDATES
Customised aviation solutions in Malta Malta Wings prides itself on its European standard airline certification awarded by the Civil Aviation Directorate of Transport Malta. The company is authorised to carry passengers and cargo throughout the European and North African region on a 24-hour basis, in addition to aerial photography and surveillance services. Sightseeing flights of various durations are available by both day and night, giving passengers the opportunity to discover the beauty of our islands. Air taxi and priority cargo services are also gaining popularity, with customers appreciating the flexibility that these services
offer, including the possibility of selecting from hundreds of available licenced airfields which may be far closer to the intended destination than the airports served by a scheduled airline service. The Malta Wings fleet includes a stateof-the-art twin-engine P2006T aircraft as well as a single-engine Cessna 172 aircraft, both providing comfortable seating for up to three passengers. Malta Wings strives to accommodate requests for flights at short notice and passengers using our air taxi service are able to stop at their preferred destination for any length of time they prefer, even for just a few hours!