Tough Times Ahead

EyeonAccountancy

Will the current headwinds be the straw that broke the

Rewind the clock to St Patrick’s Day, 2020. Many businesses were preparing to shut their doors, not knowing what was around the corner.

Fast forward to St Patrick’s Day 2022, many businesses have weathered the storm of uncertainty and various lockdowns to emerge as strong, if not stronger, than the same date two years ago. It is unassailable that government support – the furlough scheme, government guaranteed bank lending and HMRC deferrals, to name but a few - has played a huge part in this for many businesses in Northern Ireland and beyond.

However, as if an unprecedented pandemic was not enough for local business leaders to navigate and eventually emerge from, they now face a new economic and political landscape like never before. It is fair to say that certain sectors are feeling the impact of the ever-changing macro-economic environment more than others.

The effects of increasing raw material costs as well as disruption to global supply chains arising from the unsettling events in Ukraine have undoubtedly been felt in Northern Ireland. Local food producers reliant on raw materials from the region are finding it increasingly difficult to fulfil orders. Even when raw materials are available, the constantly increasing cost of energy to run production lines is causing a squeeze on margins, and cash reserves, like never before.

In the hospitality sector, the recent increase of the VAT rate from 12.5% to 20% is a tremendously unwelcome shift for operators at a time when input costs are rising across the board and staff shortages are apparent across the industry. National Living Wage increases, as well as higher national insurance contributions, are two of the main drivers. Those increases cannot be absorbed by businesses in their entirety and will invariably be passed onto consumers…but at what cost?

In the construction sector, the acute labour shortage combined with increasing material costs and recent ban on red diesel for many industrial uses are causing a slowdown in local private sector output in comparison to Great Britain.

This is all set in the context of a landscape where creditors were largely unable, or unwilling, to pursue debt recovery over the last two years. HMRC took an uncharacteristically passive role in the recovery of outstanding tax debts; however, recent experience shows the tide is on the turn on that front. The recent lifting of temporary provisions around winding up petitions expired on 31 March 2022 with the original debt threshold reverting to £750 from 1 April 2022. Although the High Court continues to deal with a backlog of matters in this field, it is only a matter of time before creditors in Northern Ireland will get the green light to issue winding up petitions again.

Across many industries and sectors, businesses and business leaders are feeling the heat. One or two of the above external factors would be manageable for many, but the vast number and pace of

camel’s back? While the local economy has prospered over the last 12 months, the combination of macro factors at play has the potential to be too much for many smaller businesses over the coming months.

Gareth McGonigle, Restructuring and Insolvency Director at ASM Chartered Accountants

various headwinds are causing great concern to many business leaders and significantly, raising the question as to whether their current enterprises remain viable. And that is without considering the impact of local political instability…

Gareth McGonigle is Restructuring and Insolvency Director at ASM Chartered Accountants and is a Licensed Insolvency Practitioner. If you or your clients could benefit from restructuring or insolvency advice, please do not hesitate to contact Gareth on 02890 249 222 or at gareth.mcgonigle@ asmbelfast.com

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onCSR

EyeonCSR

In the business of giving back: SPAR Nurtures Neighbourhoods across NI

Patricia McCabe and Anne Hannan from Marie Curie are pictured with Bronagh Luke from Henderson Group, who recently announced over £160,000 was raised at SPAR’s recent 60th anniversary gala ball, which will be split between Marie Curie and Cancer Fund for Children.

2021 was a milestone year for SPAR in Northern Ireland. It celebrated 60 years since the brand arrived in Northern Ireland, SPAR reached a £2 million fundraising mark for charity partner Marie Curie across the UK – with a whopping £500,000 contribution from Northern Ireland stores, and pledged to raise £60,000 more in their anniversary year.

Fast forward to 2022, and the team at Henderson Group which own the brand in Northern Ireland finally got to celebrate their 60th anniversary with a Gala Ball at the ICC at the end of March, bringing together retailers, suppliers, special guests, directors and employees from across the SPAR and Henderson Group network, where they pledged to raise £120,000 on the night for Marie Curie and Cancer Fund for Children.

Bronagh Luke, Head of Corporate Marketing at Henderson Group has just announced that their target was smashed on the night; “I am delighted to say that at our gala ball, we raised over £160,000 for Marie Curie and Cancer Fund for Children, with over £80,000 going straight to each charity to help them continue the vital services they provide in our local communities.”

The business and its brands have a culture of giving back, which is also reflected in their recent multi-million-pound investment in community engagement and brand positioning; The Joy of Living Locally.

Bronagh commented; “As one of the biggest employers in Northern Ireland, it’s not just our responsibility to give back to local charities and community organisations, but it’s an essential part of what forms the culture within the Group and our brands.”

And it was recently announced that SPAR will plant five trees at every store across Northern Ireland from September 2022, meaning around 1,500 will be planted in partnership with One Tree Planted.

Bronagh continued; “With SPAR stores nestled in the heart of communities across Northern Ireland, The Joy of Living Locally communicates through three brand pillars: Value on Your Doorstep, Passionate about Local and Nurture our Neighbourhoods, which assures our shoppers that being there for our communities is what we’re about.”

“Nurture our Neighbourhoods encompasses our CSR strategies to give back to and support community organisations and local charities, celebrate neighbourliness and provide local employment.”

Now employing over 4,500 across its companies and stores, it was announced at the start of the year that Henderson Group would form a new partnership with local mental health awareness charity, Action Mental Health (AMH). The partnership aims to fundraise for the charity, which promotes the mental health and wellbeing of people in Northern Ireland, plus ensure Henderson employees have access to even more wellbeing resources.

Bronagh continues; “Our workforce is at the backbone of our entire Groups’ success, and keeping them motivated and focused is an important factor. We have been working at a distance for over two years now, so by working with Action Mental Health we are further prioritising the wellbeing of our employees with even more incentives to enable them to connect and thrive.”

Reflecting on the Group and SPAR’s community impact over the years, Bronagh finished; “Since coming to Northern Ireland over 60 years ago, SPAR has supported around 24,600 local organisations and groups, and has raised over £7m for local charities in the past 20 years alone, while also saving lives through our Heart of the Community defibrillator campaign. SPAR is a champion of local, helping grow local businesses and supporting local food producers, which means over 75% of our fresh food comes from local suppliers.

“It is our local shoppers, retailers and employees who put their all into our community engagement, and we look forward to many more years of supporting those local communities, our charity partners and our own team members across the business.”