Ulster Business - August 2013, NI Top 100 Companies by Ulster Business

ULSTER BUSINESS

AUGUST 2013 Price £2.30 (23.75) TM

TOP 100 25TH ANNIVERSARY EDITION SPONSORED BY

NORTHERN IRELAND’S TOP 100 COMPANIES

25 th

AUGUST 2013

ISSN 1363-2507

9 771363 250005

Anniversary Edition Sponsored by

CONTENTS

What’s inside... 30

122 Volume 25 No.8

AUGUST 2013

features 22 - The First Top 100 26 - 1988 vs 2013 30 - Inside Google 34 - David Meade 38 - Analysis – Top 100 44 - Top 100 Companies 144 - The Hub 156 - 25k Awards

PROFILES

144

52 - Moy Park 54 - Caterpillar (NI) 56 - Hendersons 60 - United Dairy Farmers 72 - Firstsource 74 - Ulster Bank 76 - SHS Group 88 - Almac Group 90 - Norbrook 94 - Wrightbus 102 - Chain Reaction Cycles 106 - Randox Laboratories

ANALYSIS 58 - NI Connections 62 - M&A 66 - Equality Commission 78 - Leadership 80 - invest NI on FDI 82 - Property

THE NEXT 25 YEARS

156

110 - Alan Bridle 118 - Export 120 - Manufacturing 122 - Tourism 126 - Aerospace 130 - Energy 134 - Construction 136 - Creative Sector 140 - IT

AUGUST 2013 5

EDITOR’S COMMENT

Future tense... T

he year 2038 sounds a long, long time away. But then again 2013 probably had a futuristic and distant ring to it for the team who put together the first Ulster Business Top 100 issue back in 1988/89. At that point Northern Ireland was a region still mired in the Troubles, with terrorist attacks, political stand-offs and civil unrest dominating the headlines. Back then, it would have been hard to suggest the economy was a priority. In this the 25th Anniversary issue of the Top 100, Eddie O’Gorman, the first editor of Ulster Business, gives his recollections of compiling that inaugural list of the leading companies of the day. Elsewhere, Philip McDonagh outlines why any notions of 1980s nostalgia should be well and truly consigned to history. For example, I noticed flicking through a 1988 issue of the magazine that one of the hot topics of the day was the controversial proposal to ban smoking in offices! But this issue is not just about the past. As ever in the Top 100 we interview some of the

leading companies dominating the 2013 listing and this year we also feature a photo series of management teams from four of our most innovative, internationally-focused businesses. Looking forward, we speculate on what sectors will drive the Northern Ireland economy in the next 25 years. While it’s often easy to predict the big trends for the year to come, looking a quarter century ahead is more of a guessing game. What’s clear is that change and innovation will be required. As economist Alan Bridle points out in his essay leading off the feature, we get richer by getting better, not by getting older. It was pointed out to me recently that we are currently preparing our kids for jobs that don’t exist yet, using technologies that haven’t been invented yet, to solve problems we don’t know are problems yet. That might be a bit of a mind bender, but the next time you’re browsing on your smart phone consider that the first commercial text message was only sent in 1992. Google was only founded in 1998 – making you wonder to whom we used to address the 31 billion searches it undertakes

each week! In the internet age, things move fast. This issue includes a sneak peak behind the scenes at the Dublin offices of Google and Facebook – the sort of companies many people would like to see choose Northern Ireland as their base. It would be great to speculate that they would join global companies like Bombardier, Caterpillar and Terex on future Top 100 lists. But recent research from the Northern Ireland Economic Advisory Group ranks Northern Ireland 42nd out of 144 countries in terms of competitiveness – worrying when the UK as a whole comes in 8th and the Republic of Ireland 27th. So, while there is much to celebrate in Northern Ireland’s business community, there’s a long, long way to go.

Editor: Symon Ross Manager: Sonia Armstrong Deputy Manager: Sylvie Brando Advertising Executive: Stuart Hackney Art Editor: Stuart Gray Production Manager: Stuart Gray Publisher: James & Gladys Greer

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AUGUST 2013 7

SPONSOR’S FOREWARD

Keeping business moving By Phil Lander, Director of BlackBerry UK and Ireland

eeping your business moving. It’s what BlackBerry does best. And it’s the reason we are proud to be the sponsor of this, the anniversary edition of the Ulster Business Top 100, Ulster Business magazine’s premier chronicle of the businesses that have kept the Northern Ireland economy moving for the past 25 years. Businesses that have fought hard for growth and profitability in the face of tough economic conditions, rising domestic inflation, turmoil on the global financial markets and increasing instability within the Eurozone. This year’s list is no exception. Congratulations to the businesses carrying the flame in 2013. And what a year it has been. After six years of economic stagnation, indications of growth and signs of stability are emerging. But the fight isn’t over. The continued squeeze of inflation and the bite of global economic uncertainty continue to threaten recovery. The businesses on the Top 100 list are no strangers to the fight. It’s what they do every day to keep the economy moving. And it’s the reason why BlackBerry is proud to put its name to this accolade, particularly in this landmark edition, marking 25 years since Ulster Business first compiled the Top 100 as part of its goal to help the Northern Irish business community make smarter decisions about business. It’s also a landmark year for BlackBerry. In February, we launched BlackBerry Enterprise Service 10, our solution designed to meet the mobile needs of businesses of all shapes and sizes. Businesses like those on the Top 100 list, who are seeking to become more agile in a tough economic market by empowering employees to get work done from anywhere, using the devices they choose and within a secure infrastructure that protects beyond corporate firewalls. Our solution delivers the best of both worlds: it allows the user to take full advantage of all of the rich features and functionalities the modern day smartphone has to offer, while at the same time allowing the IT department to securely manage the mobile device and all the corporate data it stores. We offer full device management, unified communications, apps and security covering not just BlackBerry devices, but also smartphones and tablets running on iOS and Android as well. So irrespective of your device of choice, BlackBerry’s unrivalled enterprise-grade security is guaranteed.

“Just like the companies on the Top 100 list, we stand by our commitment to keep business moving.” The mobile communications landscape for companies is rapidly changing, and it’s important to keep up and maintain consistent and reliable support for the growing needs of business. And while managing the multiple mobile platform demands of employees raises its own share of challenges, so too does the challenge of finding scalable, worldwide mobility solutions that can help the Northern Irish business community deploy across borders and regions.

We can help. Our enterprise solution is designed to simplify the management of complex fleets of mobile devices across increasingly disparate workforces. We even have solutions that can help businesses regain control of a multi-device workforce by separating and securing work and personal information on just one device. Just like the companies on the Top 100 list, we stand by our commitment to keep business moving.

AUGUST 2013 9

NEWS

Indian retailer eyes NI sourcing deals

ne of the most successful conglomerates in India is interested in sourcing food and drink products from Northern Ireland for its retail business in the subcontinent. The RPG Goenka Group, which already owns contact centre business Firstsource in Northern Ireland, is looking to source more international products for its food retail business Spencer’s Retail Ltd. Speaking to Ulster Business on a recent visit to Belfast, Sanjiv Goenka, Chairman of RPG, said the company wants to build a stronger relationship with Northern Ireland, which could include sourcing from local suppliers. “We believe that apart from (Firstsource) there are opportunities in the retail sector, in as much as we could source products from Northern Ireland to retail out of our 150 existing outlets. It is something we have just about begun to explore and it may take a few months to happen,” he said. “Clearly we know Tesco and Sainsbury do a lot of sourcing here and we’ll need to do a lot of study into what sorts of products can travel to India and will sell well in India. We have to look at all of that but we do believe there is potential. Northern Ireland has a reputation for supplying a good, consistent, quality product, which is important.” Mr Goenka said there was growing interest across India in trying global brands and foods that would previously not have sold well in the country. “We are a food retailer and over the last 12 months we’ve shifted our focus from national products to international products in our stores. We started initially with New Delhi, Mumbai, Kolkata and Bangalore and we find that people are very keen to experiment and try international products,” he explained.

Government Minister Gregory Baker with RPG’s Sanjev Goenka.

“With the advent of international satellite television networks, everyone has access to every channel. In one of our stores in a not very prosperous part of India and man came up to me and said he wanted to try Heinz chilli ketchup and why didn’t we stock it. Heinz hadn’t launched it in India yet. So there is an aspiration.”

Hamilton confirmed as Finance Minister

he DUP’s Simon Hamilton has been confirmed as the new Minister of Finance and Personnel at Stormont. The Strangford MLA previously served as Assembly Private Secretary to his party colleague and predecessor in the role Sammy Wilson. The change in Minister had been flagged by First Minister Peter Robinson well in advance and business groups welcomed the fact that Mr Hamilton has had a chance to shadow Mr Wilson in the role. Following his appointment Simon Hamilton said: “I am very honoured to be appointed as the Minister of Finance and Personnel and look forward to the role and the important challenges that are ahead of me. “The portfolio of the Department is not to be underestimated as we work to deliver on a wide range of issues working with other government departments in delivering on the commitments contained in the Programme for Government.” He added: “As we continue to rebalance and rebuild Northern Ireland’s economy there are significant issues we need to deliver on including the budgetary challenges presented to us by Treasury. I have no doubt that there will be continued financial pressures with competing departmental priorities when hard decisions will have to be made. “Welfare Reform, rating issues, devolution of Corporation Tax will continue to be high on the agenda as well improving online access to government services by the citizen and continuing to tackle sick absence levels across the whole of the Northern Ireland Civil Service. “I am committed to working with my Ministerial colleagues in following through on the opportunities offered by the Economic Pact and in pursuing a programme of public sector reform to enhance the quality of services to the public and to improve efficiency.”

10 AUGUST 2013

NEWS

IS DIGITAL IN YOUR DNA? The MBAAI, in partnership with NYSE Euronext, have brought together leading figures from Google and Facebook for the organisation’s first annual Digital DNA summit in September. Themed ‘Connect & Build: Your digital footprint for the future’, the all-day conference takes place in Titanic Belfast on Friday September 13. Speakers for the event include CEO of NYSE Technologies, Jon Robson; Director of Small Medium Business Sales for Google, Dave Geraghty; Director of Global Sales Services for Facebook, Gail Power; and Head of Engineering in Deloitte Digital UK, Mike Robinson. Pictured promoting the event are Sinclair Stockman of Digital NI 2020, Claire McIntyre from NYSE Euronext and Gareth Quinn from MBAAI. Anyone interested in registering for the Digital DNA summit should log onto www.digitaldna-ni.com or email northernchapter@mbaassociation.ie. For a behind the scenes look at Google and Facebook turn to page 30.

AUGUST 2013 11

NEWS

The BIG Numbers

£80m The cost of hosting the G8 summit in Fermanagh (£60m of which was paid for by Westminster).

41% UKTI’s annual report showed Northern Ireland benefited from 38 foreign investment projects in 2012, up 41% from 27 the previous year.

800

June showed the largest decrease in unemployment benefit claimants since August 2012, while the unemployment rate fell 0.5 percentage points to 7.8%.

0.6%

The rise in GDP in the second quarter. However, Northern Ireland is only expected to register 0.5% growth this year.

$15bn The US city of Detroit, which filed a bankruptcy petition, is estimated to have at least this level of debts on its books.

1 million

As of July the number of visitors to have visited Titanic Belfast since it opened its doors in April last year.

100%

A key measure in the Economic Pact announced by Stormont and Westminster was a commitment to retain Northern Ireland’s 100% assisted area status

£29bn

The amount absenteeism sickness now costs UK businesses each year. PwC found workers in the UK take an average of 9.1 sick days a year.

12 AUGUST 2013

Northern Ireland to lag UK recovery

conomists have forecast that Northern Ireland will lag the burgeoning recovery in the UK economy, with growth this year set to be minimal. The predictions were made after official figures from the Office for National Statistics showed the UK economy grew by 0.6% in the three months to June, an acceleration from the 0.3% increase in the first quarter. Richard Ramsey (pictured), economist at Ulster Bank, said: “Following today’s numbers, the UK economy has recouped just over half of the output it lost during the recession, and recouping all of this would require 0.6% growth in each of the next six quarters. That is, the size of the economy would only return to where it was in Q1 2008 by Q4 2014. This highlights the long, slow road to recovery that the UK economy, and by implication Northern Ireland, faces.” Danske Bank’s Chief Economist Angela McGowan said the growth reflected a stronger performance in the services sector and noted that a number of indicators including business and consumer confidence indices have shown improvement: “For Northern Ireland, the UK’s recovery is very important, since any pressure in the UK economy can quickly reflect on our block grant and lead to an overall reduction in sales from NI to the GB region. A rebound in the UK economy, on the other hand, helps to contain public expenditure pressures locally and results in greater trade.” PwC economist Esmond Birnie said while the UK was on course to return to an economic growth rate of 1% in 2013 and 2% in 2014, the regional picture is less certain, with regions including Northern Ireland and the North East of England projected to grow by around 0.5% in 2013 – half the UK average. “Northern Ireland’s significant structural problems remain; total economic inactivity in the second quarter of 2013 increased by 6,000 on 2012, while the total number of employee jobs in March 2013 was 1,510 lower than the previous quarter,” he said. “So, while the preliminary GDP data is welcome and encouraging news for Northern Ireland, we should not assume that the level of recovery becoming apparent in the English regions will automatically happen here.” YES WE CAN:Thousands of photos of US President Barack Obama were taken during his visit to Belfast and subsequent attendance at the G8 summit in sun-kissed Enniskillen. But few can surely boast such successful brand placement as this image of the president in full flow during his inspirational address to a select audience at Belfast’s Waterfront Hall. No doubt there were several pats on the back for the City Hall staffer who ensured Belfast City Council’s logo appeared directly behind the president and couldn’t be missed by the assembled throng of local and international press photographers. During his speech the President re-iterated America’s support for Northern Ireland and urged politicians to keep working towards a real and lasting shared future.

NEWS

AMBITIOUS PLANS:The former Scottish Mutual building opposite Belfast City Hall is to be transformed into a luxury ‘boutique’ hotel as part of a £12m investment plan expected to create more than 180 full and part-time jobs.Tullymore House, the company which owns and runs the Galgorm Resort and Spa, has acquired the landmark building and has ambitious plans to sympathetically restore it to its former glory.Two bars and two restaurants are earmarked for the ground and first floor areas in the 1904 Grade B1 listed building, which straddles Bedford Street and Donegall Square.The plans also include a large ‘seated’ function room for more than 120 people.The upper three floors will be upgraded to accommodate up to 40 hotel bedrooms and 10 serviced apartments. Pictured announcing the plans are Rob Jennings from architects Robinson McIlwaine, Colin Johnston, Project manager of Tullymore House Ltd and John Reid from Robinson McIlwaine.

AUGUST 2013 13

NEWS

JOBS FROM JAPAN

New owner for Belfast International

Japanese owned medical device manufacturer Terumo BCT is to create 416 new jobs in Larne. The jobs are being supported with over £2m from Invest NI’s Jobs Fund, but will be worth £6m annually in salaries. Terumo BCT is also investing over £2m in two R&D projects, towards which Invest NI has offered £500,000 of R&D support. EVOLVING PROFITS

Digital Solutions company Kainos has posted record revenue and profit growth for its financial year ending March 2013. Revenue increased 17% to £29.7m and profit was up by 75% to £3.5m. The company, which employs over 450 people, said growth had been driven by sales of its flagship electronic medical record product Evolve, its work with government departments and a partnership with software-as-a-service firm Workday. DERRY INVESTMENT

Evermore Renewable Energy has announced it will create 200 jobs during the construction of a new wood-fuelled power plant that will be built at Londonderry Port and Harbour, Lisahally. The plant is set to open in summer 2015, with work commencing shortly. The company hopes to produce enough electricity to supply more than 25,000 homes. GEM OF A DEAL

Global business process outsourcing company Concentrix Corporation (formerly gem) has launched a recruitment drive after securing new business in the technology and gadgets sector. The company said it would recruit 100 permanent staff and an additional 150 temporary positions within the next few months. The new recruits will be required to handle customer service, inbound sales and chat services for a well known global technology company. ALPHA ON DISPLAY

Corporate interiors specialist 1080 has completed the first phase of a major investment strategy in its showrooms at Dargan Road, Belfast after its recent merger with Alpha Office Furniture – a provider of office furniture and design solutions. The newly refurbished two storey 10,000 ft display facility showcases an extensive range of products including desking, benching, task seating, contract flooring and storage along with the latest trends in break out areas and AV technology solutions.

14 AUGUST 2013

elfast International Airport has been sold to new owners as part of a multimillion pound deal. Airport investor ADC & HAS Airports Worldwide acquired the assets of Belfast International in a deal that also saw it purchase airports in Sweden and the US from TBI Ltd, which is majority owned by Spanish company Abertis Infrastructuras. In a statement the company said it paid €284m for 100% of the shares in Belfast International Airport, 90.1% of the shares in Stockholm-Skavsta Airport, and 100% of the shares in the concession to operate Florida’s Orlando Sanford Airport, as well as several other smaller interests. “We are extremely pleased with this acquisition,” said Jeff Scheferman, President and CEO of ADC and has airports worldwide. “With it, we add to our portfolio two airports serving capital cities. We also expand and intend to further build upon our presence in the US market, add more than 350 experienced airport personnel, and will be serving more than 35 million passengers annually.” TBI acquired Belfast International airport in 1996, two years after its privatisation. The airport, at its current location, opened its installations in 1963, transferring airport activity from the nearby Nutts Corner airport at Aldergrove. Belfast International allows aircraft movements 24 hours a day, 365 days a year. Approximately 80,000 air transport movements take place each year. It is estimated that in 2030 around 12 million passengers will pass through the airport. ADC also owns airport interests in Cost Rica. BULLETPROOF BUSINESS: US-owned DuPont is celebrating 25 years of producing Kevlar® at its Maydown site near Derry. Invented by DuPont scientist Stephanie Kwolek in 1965, Kevlar is extraordinarily strong, lightweight and on an equal-weight basis, five times stronger than steel. It is best known for its use in protective garments worn by men and women who face danger in their jobs, such as police and fire fighters, but is also used in deep-sea cabling and the ropes on NASA’s Mars Pathfinder mission. The Maydown site is one of only three in the world and employs almost 200 people. Claude Metzdorf, plant manager (pictured), said: “Like most global industries, we’ve had to tighten our belts over the last number of years but the on-going investment in our staff, research and development and our infrastructure is testament to the success being achieved at the plant locally and by Kevlar®, globally.”

NEWS

CALLING ALL DIRECTORS: Entries are being invited for this year’s IoD Director of the Year Awards.The awards, sponsored by Abbey Bond Lovis, are open to all business leaders in Northern Ireland, whether they are IoD members or not, and encompass all sectors of the economy. Applicants are invited to enter across eight categories: Director of the Year for a Small and Medium Company; Director of the Year for a Large Company;Young Director of the Year Award; Public / Third Sector Director of the Year; Director of the Year for Leadership in Corporate Responsibility; Family Business Director of the Year; Global Director of the Year; and Non-Executive Director of the Year. Criteria for all the awards can be viewed at www.iodni.com and the closing date for applications is 30 September. Employment Minister Stephen Farry launched this year’s awards with the IoD’s Linda Brown and Maurice Boyd from Abbey Bond Lovis.

AUGUST 2013 15

NEWS

CBI: Use employment law to attract FDI

CBI’s Kirst McManus with Employment Minister Stephen Farry, Brian Morgan of Morgan McManus and Paul Gillen of Pinsent Masons.

orthern Ireland would have a potent sales tool for attracting foreign investment if it simplified employment law, according to a leading business organisation. CBI Northern Ireland, in partnership with Pinsent Masons and Morgan McManus

Solicitors, has launched a guide to employment law across Northern Ireland, the Republic of Ireland and Great Britain, highlighting the differences in each jurisdiction. The organisation said that reducing the regulatory burden on employers around issues

such as collective redundancies, tribunals and dismissals would make Northern Ireland more competitive. CBI chairman Ian Coulter said it was not a “black and white” issue of making it easier to fire people and reducing redundancy payments, but rather about ensuring the statistic showing one in four of the province’s young people is unemployed, does not become one in five. “This is a race for jobs. We have to think globally in terms of our regulatory framework. This is a potential sales tool to the world, it is not about firing it is about hiring,” he said. With over 70% of FDI still coming from the US, Mr Coulter said it made sense for Northern Ireland to maximise the policy levers at its disposal, including the devolved responsibility for employment law, to make Northern Ireland more attractive to American firms. “Can you imagine what it would be like if it was common knowledge in the US that we had similar employment law as they do in California?” he said. “In California because they can fire at will, employers are not restricted from hiring either. That creates a very fluid workforce which moves around.”

Jobs boost for Cathedral Quarter

he hospitality sector is to receive a significant jobs boost thanks to a new investment announced today by Beannchor, the company which owns The Merchant Hotel. More than 40 new jobs are to be created following the company’s investment in two new ventures in Belfast’s Cathedral Quarter – a restaurant and an artisan bakery. The National Grande Café Bar – due to open in early September – will be situated in the former National Bank building on High Street, while the artisan bakery and patisserie will open next door to the building. A further announcement of up to 50 additional jobs is expected to follow in the autumn with the opening of a third new venue in the Cathedral Quarter later this year. The news comes as part of the ongoing expansion of the Beannchor group – which owns over 50 pubs, hotels and restaurants across Northern Ireland – and will provide a welcome boost at a time when the hospitality sector has been struggling. Bill Wolsey, managing director of the Beannchor Group, said: “Our latest investment of around £700,000 in these two new venues – adding to our major investment of over £16m in the hospitality industry in recent years - will bring an economic boost not only to the Cathedral Quarter, but to the city centre and the wider hospitality industry as a whole.” Beannchor said The National Grande Café Bar will offer a “classic continental café bar experience” with a range of classic dishes and a selection of high-quality coffees, craft beers, premier spirits and an extensive selection of wines. The National will open for breakfast at 8am and will serve food throughout the day until 7pm, with the venue serving drinks later into the evening.

16 AUGUST 2013

NEWS

WALKING TALL: A Belfast sports club and two local businesses have stepped forward to support Marie Curie’s Walk Ten Belfast on August 30 – and they are urging as many people as possible to join them. Having welcomed over 1,700 walkers last year who raised more than £130,000 for the charity – funding 6,571 hours of Marie Curie nursing locally – the charity is hoping for bigger and better this year when it will be backed by Boost Drinks, local sporting and leisure organisation CIYMS and specialised telecoms provider Connect Telecom. Registration is £10 per person (children under-16 go free; on the night adult registration is £20) and everyone is asked to raise as much as possible to support Marie Curie. Raising £100 funds a Nurse for five hours, either at the Marie Curie Hospice, Belfast or in a terminally ill patient’s home.To register, or for more information, please go to www.mariecurie.org.uk/stormont or call 0845 052 4184.

AUGUST 2013 17

NEWS

Belfast interest in Ingenious scheme

new seed investment scheme for the creative industries and media sector has received more applications from Northern Ireland than any other UK region. GB-based Ingenious Ventures has committed to investing up to £150,000 into 15 young companies – a total of £2.25m – that qualify for the Government’s Seed Enterprise Investment Scheme (SEIS). Applications are open until September, but the company has already met with the management teams from a number of companies in Belfast. Speaking to Ulster Business, CEO of Ingenious Ventures Patrick Bradley said: “Belfast is of particular interest to us because there is a hub around the creative industries. Where you have production taking place there are usually companies setting up around them. You have the BBC here which has devolvement of production – that tends to lead to companies springing up around them. It’s the same in Salford and in Glasgow.” He added: “We’ve had more applications from Belfast than any other region in the UK, so there are obviously a lot of people here with ideas. Outside the south east of England and London, there are real advantages for entrepreneurs. If you look at Belfast, you have a lower cost of doing business, you’ve also got a number of regional grants, loan supports and co-invest funds which should be utilised. The cost of setting up in London is so much higher, particularly when you only have a small amount of capital.” Ingenious Ventures is the venture capital division of Ingenious Media, which has backed some of the creative sector’s most interesting companies, including 19 Entertainment, Cream, DRG, Digital Theatre and Lionhead Studios. Bradley said the company was interested in hot areas such as TV, gaming, e-commerce, mobile and mobile marketing. He said the investment process would be “light touch” but stressed it was not running an incubator.

The Inbetweeners was produced by Ingeniousbacked DRG.

“We want to seed 15 great companies we hope will go to the next stage. SEIS is almost like an extended job interview,” he said. “Because it is a seed fund some of these companies will be absolute startups and we’re very open-minded as to what we’re going to look at. Some of these people may have never run a company before but they may have a good idea or a commercial contract. Others may be seasoned entrepreneurs who are using this route to set up a new business. We are entirely open-minded.”

Dun & Bradstreet helps get clients Onboard

ommercial information and insight business Dun & Bradstreet has launched a new online tool designed to help companies deliver customer due diligence more efficiently in one place. D&B Onboard makes it easier for companies to start world financial transactions and enables businesses to bill customers more quickly while minimising regulatory and reputational risks. The product has been launched in response to unprecedented levels of regulatory change, which mean businesses face substantial challenges in verifying the authenticity of potential customers. The on-boarding process is also becoming increasingly complicated and time consuming, said D&B. It highlighted regulation requirements led by Europe and the US including the third EU Money Laundering Directive, Foreign Corrupt

18 AUGUST 2013

Practices Act (FCPA) and the UK Bribery Act, which demand rigorous screening and compliance from companies, adding a new layer of complexity to on-boarding of new customers. D&B Onboard enables companies to comply with legislation by providing additional data, insight and a lasting ‘Entity Identifier’ for new customers so they can be easily verified and authenticated. Corinne Saunders, President of the Dun and Bradstreet Europe & Worldwide Network, said: “The insight provided by the new D&B Onboard tool helps organisations navigate the continually changing regulatory environment, minimise reputational risk and increase efficiency. Our unique D&B D-U-N-S Number is a permanent identifier which allows customers to deliver on Customer Due Diligence

commitments in an efficient and time effective way.” With access to D&B’s 225 million company records worldwide, D&B Onboard provides the global data and information needed to conduct efficient checks and onboard customers more quickly in a single tool. D&B is leveraging its partnership with Regulatory Data Corporation (RDC), which provides a diverse range of comprehensive risk and compliance protection services. The partnership enables D&B to integrate RDC’s 18 million records updated daily, on high-risk individuals and organisations such as known or suspected money launderers, organised crime groups, and terrorist organisations from hundreds of regulatory and disciplinary authority and government lists worldwide. D&B Onboard is available in Belgium, Netherlands, the Republic of Ireland and UK.

The right currency for export By Angela McGowan, Danske Bank Chief Economist

Belfast Harbour posts strong performance

elfast Harbour has revealed record levels of capital investment totalling £47.3m during the 2012 financial year. The Harbour Authority also said in its annual report that turnover rose by 7% to £39m and profit before tax climbed by 12% to £19.9m. During the period the Harbour also paid over £6m in tax. The strong performance reflected a record year for tonnages handled, up 11% to 19.6m tonnes. The growth in trade was particularly good in sectors such as Dry Bulk Cargo (up 16%), which is closely related to the island’s agri-food industry, and Roll-On / Roll-Off (freight vehicles) which increased by 21%. Both sectors have benefitted in recent years from investments by the Harbour in new marine infrastructure such as enhanced deep-water facilities and quayside cranes. Stena Line, which operates routes from Belfast to Scotland and England, has also invested in new ships and a new terminal in Cairnryan. Len O’Hagan, Belfast Harbour’s Chairman, said: “Although the difficult economic climate is still continuing to impede business activity, particularly in the construction sector, consistent investments by the Harbour in new infrastructure and new sectors such as renewable energy are helping the business to perform well. “I’m particularly pleased that in its 400th anniversary, the Harbour is able to reveal that it invested a record £47m in capital infrastructure during the preceding year. These funds, generated entirely from the Harbour’s revenue streams, have helped position Belfast as one of UK’s leading renewable energy ports with over 200 engineers already working at the new DONG Energy terminal. The Harbour has also deepened the Victoria Channel to accommodate ever larger vessels and facilitated the ongoing regeneration of the Harbour Estate.” Mr O’Hagan added: “Belfast Harbour remains a cornerstone of the local economy with around 65% of Northern Ireland’s seaborne trade passing through the Port. Ensuring that the Harbour and its Estate continue to support the local economy, however, does not come cheaply. Last year’s strong financial performance will underpin plans for significant infrastructure projects in the future.” Belfast Harbour has also unveiled plans to invest £7m in the construction of the island of Ireland’s first purpose-built docking facility for cruise ships.

he Bank of England’s latest Agents’ Summary of Business Conditions, published in June, reported that in the period between late April 2013 and late May 2013 “moderate growth in export volumes had continued, and to an expanding range of countries”. There is no doubt about the fact that government policy at the national and local level is pushing hard for export-led growth and having some effect when it comes to UK companies thinking beyond domestic or even EU markets. Many firms in the export game are now exploring or even dipping their toe into emerging market waters. While raising export levels in any economy is a desirable outcome, sometimes the execution of an export strategy for firms is difficult even when they know that this is a strategic direction that they must take. Challenges arise in terms of foreign market information, communications with non-English speaking regions, risk in terms of credit and payment as well as exchange rate volatility. When the foreign exchange rate is favourable, exports can grow much faster than anticipated as Japan demonstrated last month with exports rising by the biggest margin in three years (largely due to the depreciated yen). Exchange rates have always been an issue for exporters, but recent developments around US monetary policy (that is the expected unwinding of Quantitative Easing) have meant that foreign exchange volatility has been particularly acute. As the US recovers and the Federal Reserve talks of reducing government intervention, markets have reacted by pulling back those capital flows and investments that have in recent years gone into emerging markets where yields have been high. This reversal of capital flows has caused significant depreciation in emerging market currencies. As this foreign exchange volatility is expected to continue in the months ahead, local companies would benefit from not only having a diversified portfolio of export markets but also speaking to the Treasury department in their respective banks to ensure that they are hedged against the foreign exchange volatility anticipated.

To talk to us about how we might support your exporting ambitions, you can email me on angela.mcgowan@danskebank.co.uk or telephone 028 9004 5000

AUGUST 2013 19

NEWS

New role for BDO’s Francis Martin He may be handing over the Managing Partner reins at BDO, but Francis Martin will be just as involved in the ongoing development of both his firm and the wider economy in Northern Ireland.

ne of Northern Ireland’s best known business leaders, Francis Martin, has moved into a new role within leading chartered accountants and business advisory firm BDO after six years as its Managing Partner. Having seen the firm grow its turnover, win significant new clients and reinforce its focus on family business in that time, Francis has been succeeded in the Managing Partner role by his long term friend and colleague Peter Burnside. Francis has been at the forefront of the local business community for some time, having served until last year as President of the Northern Ireland Chamber of Commerce – on whose board he remains a proactive member. Far from taking a backseat with his latest move, Francis will continue to play a primary, and prominent role in, servicing and supporting the firm’s clients by once again leading its awardwinning corporate finance team. It is a role he is relishing at a time when the economic outlook remains uncertain and clients are in need of the broader range of strategic advice he is able to provide. “Advising businesses on strategy, on the direction they are going, is second nature to me. The networks and contacts that I have in the

business community and at Executive level mean that I bring something unique as an adviser,” he said. “My involvement with the Chamber has given me real understanding of the economy and what’s happening out there. Having helped shape some of the changes to policy and built strong relationships with Stormont, I will be bringing all the strands of my experience and learning back to the work we do, and for the benefit of BDO’s clients.” Francis acknowledges that the economy and the corporate finance marketplace in particular has changed significantly since he assumed the managing partner mantle in 2008. But he says that as client demands have changed and have become more sophisticated, BDO has built an advisory team with broad and deep experience across a wide range of sectors. “Nobody could have foreseen the level of recession we have experienced and, like other firms, we had to respond to the challenges. We’ve done that while remaining focused on providing exceptional service for clients and empowering our people to take decisions,” he said. “We are seeing positive changes in the marketplace, albeit embryonic. Some of our

“We are seeing positive changes in the marketplace, albeit embryonic.” 20 AUGUST 2013

ambitious clients, particularly those that are export focused, are now proactively looking at M&A opportunities. There has been a realisation that they need strong balance sheets and that there is a need for equity injection. That’s beginning to create a new context for M&A activity to happen,” he added. “We bring to our clients our experience in leading and advising on M&A deals. The strength of our network of contacts with banks, private equity houses, private investors, business angels and business support agencies not only can add real value to our clients who wish to pursue acquisitions, but also to those which seek to grow organically and on an export platform, and, further, to those which, through foreign direct investment, see Northern Ireland as a great place in which to do business.” Francis remains optimistic about the economic outlook for Northern Ireland and cites, for example, the great potential for growth in the agri-food sector. BDO has long had a strong relationship with the sector and its insight has been strengthened further by Francis’ presence on the Agri Food Strategy Board established by the Executive to help drive the industry forward – the only board member from outside the sector. “It is fair to say that as BDO firmly focuses on continuing to provide exceptional service to our clients, there is a lot in the pipeline for BDO and for me in my new role,” said Francis. “It is certainly an exciting time.”

25 YEARS OF THE TOP 100

Recollecting his experience of putting together the first Ulster Business Top 100 some 25 years ago, the magazine’s original editor, Eddie O’Gorman, says we’re much better off than we were in the 1980s.

ooking back, it seems like another world. Which in many ways, it was. It’s easy, a quarter of a century later, to forget just how much has changed. In the first place, doing business in Northern Ireland in the late 1980s was a difficult and sometimes hazardous process. Simply going from A to B could be a frustrating experience. On the main roads, it often meant joining long queues of vehicles at hastily-erected security checkpoints. Delays were common, and so, in consequence, were missed appointments and disrupted delivery schedules. And in the days when only a very few people had a mobile phone (and we thought they were poseurs), if somebody was late for an appointment, there was no way of knowing when they would arrive, or, indeed, if they would arrive at all. Shopping was not a simple matter either. Out-of-town shopping centres were a relatively new phenomenon in those days (Sprucefield only opened in 1989), and delivery drivers heading for town centres had to contend with a daily obstacle course of no parking zones and security barriers. It wasn’t much fun for the ordinary shopper, either, with many of the major stores, nervous of possible incendiary devices, employing security personnel to carry out random searches at the door.

22 AUGUST 2013

For business people, this was all part of the tedious daily routine. It was a routine broken from time to time by bomb attacks, or hoax bomb attacks, which in Belfast in particular, could, and often did, cause huge gridlocks in and around the city centre. Those were also the days when, if the first rule of business was to make a profit, then the second, at least in Northern Ireland, was to keep your head down while you did it. So, from a journalistic point of view, while there were plenty of good business stories to be told, there were precious few people willing to tell them. It was only very gradually that companies began to open up, to the extent that in late 1988, a year after its launch, the decision was taken to compile the first Ulster Business list of Top 100 companies, which was then published in 1989. Even then, we had to tread carefully. Once we

knew their identities, we took the decision to send out letters to the companies involved (there was no such thing as emails in those far-off days). The reason was twofold. For one thing, we wanted companies to have the opportunity to update their figures. But we were also aware that not every company would be keen to draw attention to themselves by appearing in such a list. So we made it clear that if for any reason they didn’t want to be mentioned, then we would respect that. And if that sounds a little odd in these more secure times, it had been demonstrated often enough over the years that the threat of violence, whether against personnel or company premises, was all too real. If they decided that they’d rather not be involved, we didn’t feel that it was our place to insist. In the event, only two companies of that

“The FIRST list is dominated by manufacturing companies. It was a time when Northern Ireland still had a clothing and textile industry.”

25 YEARS OF THE TOP 100

original Top 100 asked not to be included, and of those, only one was in the Top 20. It is extraordinary to look back at that list now and see how much the economy has changed in the intervening years. It was a list dominated by manufacturing companies, among them many clothing and textile manufacturers, at a time when Northern Ireland still had a clothing and textile industry. There are shirt-makers such as Peter England, and carpet manufacturers, and clothing companies like Desmond and Sons, which at one time had a dozen or so factories, mainly in the north-west, supplying a range of leisurewear and nightwear exclusively to its sole customer, Marks and Spencer. The eventual fate of Desmond and Sons was sadly emblematic of this sector, with overseas competition forcing it to shut down its Northern Ireland operation and move production instead to low-cost locations in Turkey, Bangladesh and Africa. Two of Northern Ireland’s most iconic companies are prominent on the list, of course. Shorts, two years before its takeover by Bombardier, was still state-owned, and still making its rackety old unpressurised 360s, which flew low enough so that you could wave to people on the ground, and slow enough that they’d have time to wave back. Harland and Wolff was, like Shorts, in state hands, and, like Shorts, was also suffering from a chronic lack of investment. Ten years after nationalisation, it was a business in slow decline, along, it should be said, with the rest of the UK shipbuilding industry. Unable to match the competition from newer yards elsewhere in the world, particularly in the Far East and South America, it was struggling to find contracts, and had yet to identify a new role for itself. What would in any case turn out to be only a temporary solution – the buy-out involving Fred Olsen – was at that time still two years away. Northern Ireland’s food retailing sector in 1989 was a homegrown affair. Still awaiting the arrival of Tesco, Sainsbury’s, and Asda, several years in the future, the business was dominated by Stewarts and Crazy Prices, which at that time still had the field pretty much to themselves, and whose outlets and retail philosophy seemed stuck somewhere about 1973. To anyone familiar with the supermarket chains in the rest of the UK, Stewarts and Crazy Prices looked quaint and old-fashioned even then, and not in a good way. Twenty five years on, the Northern Ireland economy, for all its current troubles, is hardly recognisable. The Ulster Business Top 100 of the second decade of the 21st century reflects the growth in importance of the food processing sector (Moy Park, Dale Farm, Fane Valley), and

the emergence of the pharmaceuticals sector (Almac, Norbrook, Randox Laboratories). Then there are those areas which hardly existed in 1988, such as computers (Seagate) and contact centres (Firstsource, Teleperformance). At the same time, the intervening decades have seen the virtual disappearance of traditional Northern Ireland industries such as clothing and textiles, reduced now to a handful of specialist manufacturers, and carpet manufacturing, with the notable exception of Ulster Carpet Mills. A feature of the last quarter of a century has been the transformation in the business climate which followed the peace process. One consequence has been a much greater volume of business between Northern Ireland and the Republic, helped by vast improvements in road access (to the relief of those who remember the tortuous route to Dublin in the late 1980s and the interminable queues at the border checkpoint outside Newry). Another benefit: a sense of confidence reflected in the growing amount of inward investment from companies like Citigroup, NYSE, Allstate and Seagate Technologies, and the continued growth of home-grown companies like Almac, Moy Park, Randox, First Derivatives, Andor Technology, and Wrightbus. And through it all, Ulster Business has been there to chart the changes, to chronicle the ups and frequent downs of the Northern Ireland economy, the inward investments and the presidential visits, the banking scandals and the bankruptcies, and to bring each year a new Top 100 companies, these days, thankfully, without first having to ask whether or not they want to take part.

The 1989 Top 25

here are some familiar names on the 1989 Top 100 but an equal number that have long since been acquired or gone out of business. Only five local companies had turnover of more than £100m. COMPANY Northern Ireland Electricity Milk Marketing Board Short Brothers plc Stewarts Supermarkets Wellworth & Co Lamont Holdings Cawoods of Northern Ireland Dunnes Stores CV Carpets TBF Thompson Crazy Prices European Components Corp Harland and Wolff plc McLaughlin & Harvey Moy Park Irish Bonding Company John Kelly Ltd Hyster (NI) Ltd John Thompson & Sons Hughes Tool Company Desmond & Sons Leckpatrick Co-Op Powerscreen International plc Dale Farm Dairies STC NI Ltd

SALES £306,600,000 £212,884,000 £191.871,000 £166,002,000 £150,178,000 £96,740,000 £95,755,000 £89,622,000 £85,950,000 £82,596,000 £73,563,000 £68,952,000 £67,500,000 £65,916,000 £61,565,000 £54,619,000 £54,619,000 £49,322,000 £47,814,000 £47,077,000 £46,586,000 £46,571,000 £44,882,000 £44,503,000 £40,612,000

AUGUST 2013 23

25 YEARS OF THE TOP 100

Different economy,

same old challenges

Economist Philip McDonagh writes that many of the problems facing the economy at the time of the first Ulster Business Top 100 are similar to the challenges we face today.

“I

t is anticipated that the growth in the national economy... might at last begin to have a positive impact in Northern

Ireland.” This is not a quote from a recent local economic forecast but rather an extract from the first page of the Northern Ireland Economic Council’s Economic Assessment, April 1988. In many ways the Assessment has a familiar ring –

after the economic recession of 1980-82, the UK economy was beginning to pick up speed again but the local economy was struggling to recover from the devastation created in the manufacturing sector, where employment had crashed from 140,000 at the start of the eighties to just over 100,000 by 1988. A lot may have changed since then but here we are again waiting for the eagerly anticipated recovery from the

recession of 2007-09. However, in other ways we are in a much stronger economic position now than we were then. The Council’s sober 1988 Assessment welcomed the fact that unemployment had fallen by two percentage points over the last 18 months and was now down to “only” 17.3% representing less than 120,000 people. Another 8,000 people were participating in the public

The impact of the “greed is good” culture depicted in the film Wall Street – starring Michael Douglas as Gordon Gekko – was still being felt in the late 1980s

26 AUGUST 2013

job creation ACE Programme. This compares with an unemployment total of just over 60,000 today and a rate of less than 8%. 1988 also saw some of the grisliest events of the Troubles – the Gibraltar killings, the Milltown Cemetery murders and the lynching of the two plainclothes Army Corporals all took place in March 1988. The Industrial Development Board (IDB) – the predecessor of Invest NI – had managed to bring almost 500 inward investment jobs to Northern Ireland in 1987 but these events made their job even more difficult. Nevertheless the Hume-Adams talks which began in early 1988 laid the groundwork for the future peace process and a brighter economic outlook. It was the size of the public sector and the level of public spending that carried the local economy through these difficult times. There were 205,000 people employed in the public sector at the end of 1987 which represented 40% of total employment. In 2013 there are now just over 215,000 public sector employees but the private sector has expanded significantly and now provides 480,000 jobs which means that the proportion of public sector employment has fallen to 30%. The structure of industry was very different in 1988. Despite the collapse of the manufacturing sector, it was still an important part of the local

“Black Monday had seen a collapse in global stock markets in late 1987 and UK interest rates were falling in 1988 but only to around 8%.” economy, employing 20% of all employees. In 1988 the government announced the proposed privatisation of both Harland & Wolff and Shorts, which was an important milestone if the economic development of the local economy. Meanwhile the services sector was still relatively small and underdeveloped, dominated by the retail distribution sector which had not yet experienced the arrival of the British multiples. Black Monday had seen a collapse in global stock markets in late 1987 and UK interest rates were falling in 1988 but only to around 8% and, along with other borrowers, I will not forget the shock over the following two years as the rate rocketed to 15% and our monthly mortgage payments shot up dramatically. Despite these challenging circumstances, the mood in local industry in 1988 was upbeat

and business confidence was rising. IDB and LEDU were busy promoting the establishment and expansion of local business with generous grant assistance and firms were less reliant on bank borrowing to expand than today. Global trade was rising and the UK economy was growing but there was a sense that the British government needed a clearer economic strategy for the way ahead in Northern Ireland and it was not enough to hope that the benefits of economic growth elsewhere in the UK would eventually trickle down to the local economy. The same need for a clear economic strategy that will transform the local economy through a dynamic innovation led recovery still exists today. Philip McDonagh is an independent economist.

AUGUST 2013 27

Skin in the game Y

ou’d have to have been living under a rock for it to have escaped your attention that Northern Ireland’s own Dr Leah Totton won this year’s edition of the hit BBC show The Apprentice. The Derry woman, who is a qualified doctor, was chosen by the show’s big boss, Lord Alan Sugar, to become his new business partner, receiving an investment of £250,000 in her new start-up venture. Leah is the first winner of the series to hail from these shores, with former contestants Jim Eastwood and Ben Clarke getting knocked out before the final week of “the process”. But it hasn’t been all congratulations for the reality show winner, who faced a media backlash over the ethics of the business she plans to launch with the Amstrad tycoon within hours of her victory. She plans to open a string of high-street cosmetic clinics that offer aesthetic, antiageing skin treatments including Botox injections, chemical peels and dermal fillers under the brand name Dr Leah (suggested by Lord Sugar). But the smart, assured young doctor has refused to rise to the bait, insisting she is a “very ethical person” and wants the clinics to raise the standards of the beauty industry. She has stressed that the clinics will be operated in a regulated environment by trained staff, and went as far as to say that young women of 25 don’t need Botox. It may seem like an unlikely venture for an old curmudgeon like Alan Sugar to invest in, but he said the “devil in him” had led him to take a risk on the idea rather than the safer baking supplies proposal of losing finalist Luisa Zissman. But the good doctor seems like a safe pair of hands for his investment, which could see her open a clinic in her home town of Derry if the London launch is a success. You get the feeling we’ll be hearing a lot more about Dr Leah in future.

28 AUGUST 2013

PROFILE

Searching for the real

One of the prime reasons for wanting lower corporation tax in Northern Ireland is to attract global companies such as Google and Facebook to Belfast. Symon Ross got the inside track on what it’s like to work for them on a tour of their Dublin offices.

hey call it the Google ghetto. The area surrounding the three huge offices the internet search giant occupies on Dublin’s Barrow Street is so named because more than half of its 2,500 staff walk to work from nearby apartments. Counting contractors, suppliers and staff in its data centres the employment numbers are nearer 4,000, so talk to any hip young thing under 30 in the area and there’s a good chance they work for Google. The company has been in Ireland since 2003, when it started with five employees. Now, Dublin is the EMEA headquarters from which it sells to customers in 40 countries. So, when invited by the team behind the forthcoming Digital DNA event in Belfast to see behind the scenes of the internet giant, I was intrigued. I’ve heard the crazy stories about the

super laid back workspaces of California-born tech companies and wanted to see whether those tales of skate-boarding CEOs, staff bowling alleys and in-house video game arcades have been exaggerated to make them seem cooler than they really are. A quick bit of Google research (really, how did we find information before it existed) tells me Google is the basis for many of the stories. Its office in the Netherlands has an indoor cycle lane running between desks; headquarters in Mountain View is home to a replica T-Rex and edible flower garden; there’s a slide between two floors in Zurich; and a very appropriate climbing wall in Boulder. So, does Dublin live up to the hype? As it turns out, yes it does. From the moment you enter reception there are interactive screens everywhere, colourful sofas dotted around and

fridges offering free drinks and snacks, which we’re told are on hand across every one of the 13 floors. Arriving at floor 11 we enter an oh-so trendy café area with quirky, comfy seating, good coffee, a pool table, a fussball table and stunning views across Dublin to the Aviva Stadium. So far, so what, I hear you say. Well that’s just the tip of the ice-berg. In the restaurant areas chefs prepare a selection of high quality meals from around the world for employees. Each station is colour coded to indicate how healthy the food is, and, even better, it’s all free. Anyone feeling a bit stressed before lunch can amble down the corridor to one of the waiting masseuses for a neck and shoulder massage. A high-spec gym occupies half of the second floor and a pool will open in the basement this month. Across the road in the graffiti-daubed office known as The Garage, we’re given a sneak peak at The Foundry, a plush, state-of-the-art, 380-seater auditorium that will be used for customer events and training. Then we were led through one of the bright, airy offices buzzing with multi-lingual chatter to The Playground, a colourful outdoor rooftop area complete with swings and see-saws, where employees chat over ice-cream and cold drinks in the sun. The working environment is designed to keep staff comfortable and focused, says Dave Geraghty, Director of SMB Sales at Google Ireland: “Larry (Page) and Sergey (Brin), when they formed the company back in a garage 15 years ago, they built this culture. The idea is that if you make people very comfortable in their work environment you don’t have too many concerns. Like everywhere there are challenges, but we try not to make the basics challenging. If you’re hungry you don’t need to go down 12 floors, go out to the Spar to buy something, come back having lost track of what you’re doing. You grab some fruit or a chocolate bar, you come to the kitchen area.”

A googler gets a neck massage

30 AUGUST 2013

Those kitchen areas and the cafes with their long tables also enable smart people from different teams to meet, collaborate and innovate. “It’s hard to measure in a dollar number but if you look at it in an overall sense, is Google doing okay? It’s doing okay, and this is definitely a feeder into it,” adds Dave. However, don’t confuse comfortable with easy. The attitude is very much one of work hard, play hard, and while hours are flexible, all staff have stretching quarterly targets to meet. And there’s a very high bar to become a “Googler” or, if you’re new, a Noogler (each of whom is given a multi-coloured baseball hat with a propeller to wear). The interview process is strict, consisting of four 30 minute interviews, including peer interviews to make sure the person will fit into a team. Roles range across marketing, sales, operations and product quality – about 10% are programmers. But not every role is open to the Irish. Geraghty, who has been with Google for more than six years, says the company has people from 65 countries speaking over 100 languages in Dublin, with around 70% of staff hired from outside of Ireland. The international nature of Google’s workforce in Dublin gives it the opportunity to stage a football world cup tournament every year (the Irish team has won twice in eight years). But around half of all overseas employees only stay two years or less, many transferring home or moving on to Facebook, Twitter and LinkedIn or long-term players in Dublin like Microsoft and Intel. “We’re always recruiting,” says Geraghty. “People in Google have options. We hire 70% of people from outside of Ireland, we hire people who are fresh out of university. They often come and think I’ll stay two years and then go home with Google on my CV. Our goal is to get them to stay for a longer period because it takes four to six months to train people up.” There has of course been widespread criticism of the tax arrangements used by Google and several other large multinationals in Dublin. But other stories show the positive impact it has had on the city. In the early days the company would buy sandwiches in for employees crowded into its first office, three to a desk. Today, the same caterers who provided the sandwiches employ 60 people across three restaurants which, between them, serve more meals than any other restaurant in Dublin. And from a Northern Ireland perspective the Dublin operation is helping to make the web work for SMEs by helping them target customers globally. Geraghty says: “It might sound corny, but in our day to day work, in SMB sales, we work with SMB customers and I believe we change their lives by getting the most out of the web for them so we can increase their turnover and the number of people who come to their websites. That can help create jobs, which is changing >>> lives.”

TOP 100 COMPANIES

Dave Geraghty

The Playground

AUGUST 2013 31

TOP 100 COMPANIES

Gail Power

fter the wow of Google, Facebook is a little more down to earth, but still gives off the vibe of being way cooler than anywhere you or I might work. Open plan, with lots of glass, the company’s famous no office policy has extended to Dublin with only quirkily named meeting rooms (sports stadia, Father Ted references) having closed doors. The obligatory fussball and air-hockey tables nestle next to well stocked staff kitchens on every floor; there are vending machines full of keyboards, cables and other IT kit; employees are encouraged to get creative on massive chalk boards bearing random statements and words of wisdom. It’s easy to forget that despite being such an established brand Facebook is only nine years old. It has been in Dublin for four and its staff are expected to be innovative, getting involved in global “hacks” to solve problems and make services better for customers. The motto is “move fast and break things”. “We’re at an age where it feels like you can make a difference to the company and its users. We see still ourselves as a very young company with a lot to achieve,” says Gail Power, Facebook’s Director of Global Sales Services in Dublin. “You’re given a lot of autonomy and freedom. We used to say that we were only 1% finished and it still feels like that. You can come to Facebook and there are 1.1 billion users you can make a difference to in a positive way.” Originally from Saintfield, Gail joined Facebook from Google in 2009. Her role is an international one, leading Facebook’s Outsourcing, Offshoring and Strategic Client Services teams around the world. Staff report in to her from destinations as far away as Austin in Texas, India, Singapore and Sao Paulo. Dublin is in fact the biggest office Facebook has outside of California, housing 450 staff (with 100 more to be added by next April) and important functions such as HR, user operations, finance, mid-market sales, global sales and development support. The international nature of the work means

32 AUGUST 2013

A vending machine with a difference

that, like Google, less than 30% of staff at Facebook in Dublin are Irish. The company says it is in Ireland because it is the only English speaking country in the Eurozone and because it’s easy to attract talented people to live there. The Irish staff we meet have been attracted by the autonomy, the flexibility of working hours, the allowance of working from home, and the absence of any sort of formal dress code. As in Google they have food and drinks available and all times in a hip café and other perks and services that mean no time in work is wasted. Ballyclare native Stafford Houston – who tells me he’s just celebrated his one year “faceversary” – explains that what most people see as added perks have real benefits for the business. “We’re provided with so much here that we can just focus on the job without worrying about other stuff. There’s a dry cleaner here on site, the canteen means you don’t need to worry

about making your own food,” he explains. “That’s important because things do move very fast here and it is constantly evolving with new products coming along all the time.” So far, only a handful of people have managed to transfer from Dublin to Facebook HQ in Menlo Park, California, where key functions such as product development are centralised. But Gail says there are lots of opportunities in Dublin to advance a career in Facebook “It is our European headquarters but it also has a lot of other global roles. Because of the time difference it is the perfect location to help support a lot of international business,” she says. “The culture is very fast paced. People get to have an impact, everyone is very involved and as such everyone tends to be very motivated and very engaged.” What’s not to like about that?

Passing the torch... A

s is the case with all family businesses the issue of succession will rear its head at some point. Sooner or later everyone needs to retire. Succession may mean the sale of the business, a management buyout or as is the case with most family owned businesses the torch will be passed to the next generation. After the decision has been made as to your exit strategy, careful planning is required to ensure that your exit strategy is structured in a way which minimises the tax exposure.

Passing the family business via your will Businesses often fall outside the inheritance tax regime as they qualify for 100% Business Property Relief (“BPR”). BPR is a very valuable relief as it can take the value of the business out of an individual’s estate. BPR is only given if a donor makes a transfer of “relevant business property”. Shares in unlisted trading companies are relevant business property for IHT, which will be the case for a lot of family trading businesses. However if a business holds “excepted assets” – typically shares or securities held for investment purposes or a large amount of cash not required for business use – BPR relief may be reduced. Furthermore, where land, buildings or machinery is held outside the business but used in the company/partnership business, these assets may only attract BPR at 50%. Planning can be undertaken in such

circumstances to maximise your BPR claim on the assets held outside the business, to reduce the value of the “excepted assets”, or to pass the assets which may reduce your BPR.

Gifting the family business Gifting a business to your children can still leave you with a charge to capital gains tax (CGT). The proceeds for a gift between “connected parties” are deemed to be market value even when the cash proceeds are nil. You can take steps to “hold over” the gain provided you meet the conditions in section 165 TCGA 1992. You do need to consider whether it is the right time to gift the business, if the business is left to your children on death, the capital gains value will be uplifted to market value at that time. However, the tax impact should not be the main reason behind this decision, if your children are keen to drive the business forward then it might be the right time to pass the torch and your children should be able to acquire the business at your original CGT base cost.

Selling the family business It may be your wish to sell the family business to your children or to another party. The gain on the sale of your business could be subject to CGT at the highest rate of 28% or if you qualify for Entrepreneurs’ Relief (“ER”) you will attract a rate of 10%. There are certain situations where one may fail to qualify for ER – for example where a spouse owns shares but does not work for the company or

when the trading activities are not seen to be “substantial”. As this can be such a significant saving, it is very important that in advance of any sale, professional advice is sought to ensure you meet the conditions required for the relief. It may be the case during a sale to your children or on a management buyout that the purchaser does not have access to sufficient cash and there is cash trapped in the company. In these circumstances it may be desirable for the company to purchase your shares using the company’s money. During a company purchase of own shares, your shares are cancelled, you can extract cash at a 10% rate for CGT provided you qualify for ER. In these circumstances you may want to sell/gift a small proportion of shares where you are the 100% shareholder. When planning your succession it is important to consult your tax adviser to ensure that any necessary steps are taken to minimise your tax exposure. Eugene O’Neill is a Tax Consultant with Cavanagh Kelly Chartered Accountants. He can be contacted on Tel: 028 8775 2990 or email: eugene.oneill@cavanaghkelly.com

BUSINESS PSYCHOLOGY

Halo from Belfast! Ever wished you could tap into a strong psychological tool to sell more or engage with your customers better? David Meade takes some time to reflect on how just one characteristic of our products – or indeed our province – can dramatically colour how it’s perceived by our consumers.

s clichéd – and indeed nauseating – as it sounds, we are all working in a climate where the only constant is change. Our patterns of work are shifting, the ways and means that we use to reach and connect with our customers are becoming ever more digital, and the way they engage with our products and services continues to challenge our business models. These points have never been more resonant as we shine a light on our globalised marketplace following the G8 meeting in Enniskillen. Some things never change though: a seemingly great deal; the strength of a good commercial hunch; our ability to know – far better than anyone else – what is best for our own organisation. These things are unerring, right? In fact, our faith in these things couldn’t be farther misplaced. With global leaders having bid a fond farewell to Fermanagh, we look at the important role perception plays in commerce. HELLO HALO Apple Inc has long been the darling Cupertino. Staking their claim as the earth’s most cash rich organisation, they’ve been heralded as a poster-child for innovation in virtually every commercial report in the last fifteen years. In the period after the previously ousted Steve Jobs returned to the company in 1995, it experienced meteoric growth. It’s cutting edge design, use of simple intuitive interfaces, warm retail store feel, world class customer service and stand-out organisational culture have all been cited as ingredients in it’s winning formula. Corporate analysts unpicked their business model ad nauseam. Journalists lauded their style and vision as truly revolutionary. Authors flooded book shelves with paperbacks brimming with the ‘secrets’ of how the giant achieved their success, and promised to teach how yours could too (all for a paltry £9.99, with copies available at all good airports). Apple could do no wrong. By 2008, though, the sentiment had slowly begun to change. As consumers and companies squirreled away their pennies and chose to ‘make-do’ with their existing devices rather than upgrade, the company’s sales and share price began to slip. And as the share price began to decline, so did the sentiment of the commentators. What was once revolutionary now seemed evolutionary; innovative store

34 AUGUST 2013

spaces were dubbed cold and formulaic; Apple was reportedly becoming staid, predictable, and worst of all ‘conventional’. The poster-boy had become the problem child. It was losing its grip on the cutting edge, and was teetering on mediocrity. Yet nothing structurally had changed in the organisation. The same visionary leadership team were in place, the same investment in future technology continued, the same development programme forged ahead. The only thing that had shifted were their sales patterns, a factor that was more a result of the economic situation than any organisational issues. In the space of months they had gone from being a shining light of innovation, to being the inevitable yesterday’s man through no fault of their own. SPOTTING SENSATIONAL So what’s going on here? The ‘halo effect’ occurs when one single element of a person or organisation stands out to us so much that it affects how we see them as a whole. For Apple, as its value soared so did the perceived value of everything it touched. The entire organisation was seen as an unqualified success without any real in-depth investigation as to why, or what was making it so. In other words, we find a sensational fact or feature and irrationally generalise from there that every aspect of the company must be equally as sensational. We accord excellence where it’s not always due. Equally though, we treat organisations that are going through short or medium term blips with caution and tend to expect that not only is their model flawed, but their future too is doubly uncertain. First discovered almost a century ago, the halo effect has the power to dramatically affect our decision-making, the way we see our own organisation and the way we see other organisations around us. Put simply, a single standout characteristic makes a good or bad impression on us that is so powerful that it overshadows every other aspect, skewing how we see the bigger picture. Decades worth of studies have shown that we all subconsciously regard more attractive people as being more honest, trustworthy, friendly, and generous. Evidence shows they find it easier in the workplace too, and even teachers have been found to, on average, subconsciously give better looking pupils markedly higher grades.

HANDBAGS BY GORBACHEV The halo’s impact is perhaps most notable in advertising and marketing. When we think of Penelope Cruz, we don’t automatically think of her as the perfect endorsee for Nintendo DS. Indeed, the link between Ozzy Osbourne and “I can’t believe it’s not butter” seems even more tenuous. But perhaps none was more surprising than Mikhail Gorbachev appearing in a recent Louis Vuitton commercial. We see individuals who have achieved success, notoriety, or even just plain old recognition – and we accord that same perceived quality to whatever wares they’re flogging. IN THE OFFICE We fall victim to the halo effect in every business transaction. Think about the last great pitch you were audience to. What’s the one thing that stands out to you about the experience? Chances are that enduring characteristic – good or bad – has coloured your view of the product, the people, and the entire organisation. The lessons for buyers, managers, and leaders are clear. The moment that you’ve formed a judgment on a person, product or service, immediately challenge your own view. Inspect what it has been based on and see if that same feeling remains when you do more than scratch the surface on the product offering. More importantly, what aspect of your organisation is forming a halo with your clients? Those ‘always-late’ account reports and invoices might seem like a trivial administrative delay in your office, but to your client they just might be the tip of the mismanaged wedge. And what happened to Apple? The analyst dissent continued until the now omnipotent iPhone gained commercial teeth in 2008, quickly followed by the iPad, and share prices grew in multiples of hundreds of percent. Back on top, it had regained its crown as “perhaps the greatest company ever conceived”. And you can bet they’ll have another revolutionary product around the corner to save any perceived falls from grace. iHalo, anyone? Find out more about David’s work on www.davidmeade.co.uk and follow him on twitter @davidmeadelive

BUSINESS PSYCHOLOGY

“A single standout characteristic makes a good or bad impression on us that is so powerful it overshadows every other aspect.”

AUGUST 2013 35

Business is banking on recovery – and on the future by Kevin MacAllister

It’s been the sunniest summer since 2006, the UK economy looks to be set for real growth in 2013, and even the prognosis for the Northern Ireland economy is showing some signs of improvement. But business lacks confidence, certainty – and finance. So just how is the economy performing and just how difficult is it to access finance to fund recovery?

he most recent data from the Office for National Statistics (ONS) says that the UK economy grew by 0.6% in the three months to June, a substantial acceleration from the 0.3% in the first quarter of the year. And while total output is still 3.3% below the pre-recession peak of Q1 2008, there are now clear indications that the economy is growing, with the preliminary data supported by other factors like declining unemployment and rising business confidence. All this implies that the UK economy is on course to return to an economic growth rate of around 1% in 2013 and 2% in 2014. But we need to remember that, when economists talk about the UK, they mean the average performance of all 12 UK regions and that’s where some of the shine comes off the ONS data. The preliminary ONS data suggests that the PwC forecast for growth in Northern Ireland and the North East of England is likely to be around 0.5% in 2013 – half the UK average – while the South East of England will outperform the UK average with growth of 1.2% and as much as 1.4% in London. So what can Northern Ireland’s private sector do to accelerate that recovery and in particular, what is the role of the banks in helping drive recovery and the role of private business in clearly articulating what they need? First, the local economy comprises three sectors: overseas-owned foreign direct investment (FDI); indigenous family-owned and owner-managed businesses; and a small and dynamic micro business sector, each of which has an impact and relationship with each other. Oddly enough, despite the recession and a period of sluggish recovery, FDI continues to perform relatively well. A recent report from UK Trade and Investment (UKTI) shows that Northern Ireland is one of the most successful regions in the UK and Europe for inward investment.

In 2012/13, the UK strengthened its position as the leading European destination for FDI, with more than 1,500 projects won, creating or safeguarding 170,000 jobs with an 11% increase in projects over the 2011/12 period. However, in the same period, Northern Ireland showed a 41% increase in FDI, with the number of investment projects rising from 27 in 2011/12 to 38 for 2012/13, substantially ahead of the 10% increase in FDI into England (excluding London), with projects including legal services, financial services and ICT securing almost 2,800 FDI jobs. However, FDI creates more than just jobs; almost always it brings export market access, innovation and R&D and downstream growth in the investors’ supply-chain, directly benefiting indigenous business.

“Northern Ireland is one of the most successful regions in the UK and Europe for inward investment.” When it comes to family-owned and owner-managed businesses, there are some remarkable success stories – the problem is that there aren’t enough that are investing in innovation to create or expand export demand that can create wealth and sustainable employment. And with a direct correlation between innovation/R&D, exports and business growth, the clues to success are there, but turning clues into solutions is the challenge. One issue frequently raised is bank lending – or the perceived lack of it. According to the Northern Ireland Economic Advisory Group’s (EAG) review of access to finance, only 66% of applications for bank lending (2012 data) were successful, down from 92% in 2007, when the lending boom was at its peak. Looking at applications deemed

‘partially successful’ between 2010 and 2012, these fell markedly, while the proportion of unsuccessful applications increased. This possibly reflects that businesses were unwilling to accept more arduous terms and conditions offered by banks, or that banks had become more definitive in their lending decisions. Looking at the failures, more than 55% of rejections came from business related criteria, like poor credit rating, insufficient or risky business potential. The remainder (45%) were rejected for so-called bank-related reasons, such as change in lending policy, no longer lending to that sector or rates offered were too high. The success rate in lending applications, while having fallen since the downturn, remains relatively high, the percentage of businesses actually applying for finance makes for more sombre reading. According to the EAG, only around 8% of SMEs sought bank lending finance in 2012 – a similar percentage to that of the other UK regions and the Republic of Ireland. So, while 66% of loan applications succeeded, a mere 8% of businesses actually sought to borrow from the banks. EAG’s report concluded that a number of factors discouraged potential borrowers, even including those businesses describing themselves as ‘growing’; these included the need to service existing property debt, the increased cost of finance, higher fees and more burdensome processes and procedures associated with the application process. Looking more closely at the businesses offers some clues as to why the number of applications remains so low. Only around 15% of micro businesses describe themselves as ‘growing’ with more than 40% operating in ‘reducing/survival/winding down’ mode. Medium sized business show a better picture with around 35% ‘growing’ and around 25% reducing/survival/winding down’. Those worrying assessments are also borne out by external data where there were 1,510 fewer people in work in Northern Ireland in

Kevin MacAllister, PwC

the first quarter of 2013 as compared to the final three months of 2013. Moreover, the experimental Northern Ireland Composite Economic Index fell by 0.8% in the first quarter of this year in contrast to 0.4% growth in Q4 2012 and UK GDP growth of 0.2% in the first quarter of 2013 – this suggests a high degree of volatility in the economy. Given the foregoing, it’s hard to know how to remedy the situation. The economy remains tight, demand remains low, inflation is running ahead of output prices and considerable uncertainty remains as to how to grow the economy. What is clear however, is that for those willing to put their plans to the bank, the likely success rate remains fairly high. But there is considerable evidence that banks and borrowers often misunderstand each other’s needs, wants and abilities to deliver. And the EAG acknowledges that too. Amongst a raft of recommendations for action to drive up applications, access and success rates, it concedes that communication between the banks and the business community could be improved, that the banks need to develop a more detailed understanding of the financing needs of business on a sectorial level and that DETI should commission further research on

future strategy for Venture Capital and Equity Finance. The review also recognises that there are shortcomings amongst business borrowers and potential borrowers in terms of their understanding of the banking protocols and processes. It further recognises that companies should have more and better access to

“The economy is tight, demand is low, inflation is running ahead of output prices and considerable uncertainty remains.” professional advice in respect of managing their finances through difficult trading periods and that banks and advisors should seek to create a common application form, business case and cash flow template to streamline the appraisal process for banking applications. The EAG report brings a touch of reality to a situation which was previously riven with anecdote and accusation. Businesses and the business community have commented on the unwillingness of banks to lend, that rates are high and that conditions for lending are

more onerous than they used to be. On the other hand, the banks say they are open for business, they are willing to lend to viable trade and businesses, but point to a low level of demand. The reality is that both views have some truth; however it is when the economy begins to recover that businesses really need funding to finance the capital that they need to grow. Now is the time to address the problem, otherwise the growth opportunities may be missed in two or three years’ time. Kevin is a partner and private business leader with PwC in Northern Ireland. To contact Kevin and to learn more about PwC and private business financing, email kevin.macallister@uk.pwc.com or call: 028 9024 5454

TOP 100 ANALYSIS

Northern Ireland’s Top 100 companies grow sales by 10.4% Dun & Bradstreet’s Jonathan Cushley analyses this year’s list of the 100 biggest companies in Northern Ireland and finds some interesting economic trends reflected in the numbers.

he 25th compilation of the Ulster Business Top 100 listing provides a continued positive view of the yearon-year performance of the province’s top businesses. For the first time turnover for Northern Ireland’s leading companies has broken through the £20bn mark and while profitability has tightened, the value of the companies to their shareholders continues to rise significantly. The performance of the Top 100 Northern Ireland companies shows a like-for-like increase on sales from the prior year of 10.4% to £21.1bn. Profitability however came under pressure with the businesses posting a profit of £639m against a prior year figure of £807m. This represents a profit margin of 3% compared to a prior year of 4.2%. The Ulster Business Top 100 incorporates the results of Northern Ireland based companies, either NI registered or headquarter domiciled and relates in the vast majority of cases to businesses filing either 2012 or late 2011 financial year end performance. Since the inception of the listing in August 1989, turnover has been used as the key identifier of performance. The turnover / sales figure in conjunction with profitability and shareholder value is imperative for companies in measuring ongoing performance, especially in a challenging and competitive business environment. Top 100 Performance Turnover Sales within the Top 100 took a significant stride forward in 2012. On the back of a 12% increase in sales reported in the 24th edition of the Top 100, this year’s incumbents reported a 10.4% rise. The combined turnover of the listed companies reached £21.1bn a 10.4% increase on sales for the corresponding business in the prior financial year from £19.1bn. In 2013, Moy Park Ltd, a subsidiary of Marfrig Alimentos SA, retained its position as

38 AUGUST 2013

the No.1 company and posted sales of 1,089.6m, an increase of 1.6% on prior year (figures used relate to the end of financial year December 2012). Moy Park’s pre-tax profitability also recovered significantly from £4.8m in 2011 to £24.4m in 2012, an increase of 508%. Perennial top 100 performers Glen Electric Ltd and Caterpillar (NI) Ltd – formerly FG Wilson (Engineering) Ltd – make up the

remainder of the top three, with both posting increases to turnover. Caterpillar showed an impressive 17.9% increase, although it should also be noted that the company posted an overall loss for the year due to a fall in demand from its key markets. Power NI Energy Ltd came in at number four on the listing, however, the largest energy provider in the province posted declining turnover from £826m in 2011 to £711m in 2012, perhaps reflecting increased competition in its market. The company appearing at number five, Gortmullan Holdings Ltd, is new to the Top 100 and is the vehicle being used to hold assets pertaining to the former Quinn Group companies – Quinn Manufacturing Group HoldCo Ltd, Quinn Aviation Ltd, Quinn Investments Ltd and Quinn Chemicals Ireland Ltd. The inclusion of Gortmullan Holdings Ltd distorts percentages pertaining to the Top 100 slightly as the only financials available for the company relate to the period ending December 2011 and no financial results are available for the previous year.

TOP 100 ANALYSIS

TOP 10 COMPANIES BY PROFIT

Company

Profit (£’000)

Profit Margin (%)

Rank in Top 100

1. Northern Ireland Water Ltd

133,399

32.3

2. Scottish Power Renewables (UK) Ltd

96,500

48.2

3. Northern Ireland Electricity Ltd

72,600

28.7

4. Glen Electric Ltd

62,847

7.5

5. AES Ballylumford Ltd

48,604

23.6

6. Short Brothers PLC

46,163

9.7

7. Terex GB Ltd

36,000

11.6

8. SHS Group Ltd

25,752

6.0

9. Moy Park Ltd

24,410

2.2

10. AES Kilroot Power Ltd

24,217

19.4

Within the remainder of the top ten, all of the companies increased sales. With significant sales growth attributable to John Henderson Holdings Ltd (6.3%), Lissan Coal Co Ltd (29.4%), Ballyvesey Holdings Ltd (30%), Short Bros PLC (7.8%) and United dairy Farmers Ltd (9.25%). Short Bros PLC file financial accounts in US dollars and as these have been converted to sterling they may show a slight currency variance. The majority of group relationships have been either amalgamated or excluded, however please note that the AES companies responsible for Kilroot and Ballylumford are separate entities. The same applies to James E McCabe Ltd and Philip Russell Ltd, part of Golf Holdings Ltd, the Diageo companies and Musgrave Retail Partners Ltd and Musgrave Distribution. Also, the Resource Services Group Ltd show a reduction in turnover due to posting 52 weeks turnover in 2012 as compared to results reflecting a 78 weeks period in 2011.

PROFITABILITY The success of any business cannot look solely at sales, as business is ultimately about the generation of profit. In the latest Top 100 listing the companies posted a challenged profit margin of 3%, comparable to 4.2% in the corresponding financials in 2011. Profitability decreased to £638m across the companies. However, Gortmullan Holdings Ltd posted significant losses of £317.6m, which had the effect across the Top 100 listing of reducing profitability across the remaining 99 businesses from £937m and reduced profit margins from 4.44% – comparable with the outcome last year. Ten of the 100 companies posted losses, an improvement on the 18 who reported losses in the 24th edition of the Top 100 last year. Mirroring last year’s performance, power/ utility companies continue to generate significant profits and maintain high profit margins, holding positions 1, 2, 3, 5, and 9 in the top ten listing and between them generating £375.3m.

“Ten of the 100 companies posted losses, an improvement on the 18 who reported losses in the 24th edition of the Top 100 last year.”

In 2012, profit per employee within the Top 100 was also challenged dropping to £7,600 from £10,200, which is interesting given the number of employees across the businesses increased by 5.8% to 83,905. Net Worth (Shareholder Value) The third measure of a company’s overall success utilised when compiling the Top 100 listing is the company’s value to its shareholders. In its simplest form it is the Shareholders Funds (issued capital) plus Retained Profits, minus Intangibles. The value of the current Top 100 companies to their shareholders is currently £4.69bn, a 10.6% increase on the figure for the same companies in the previous year, which amounted to £4.25bn. The shareholders return for the Top 100 businesses equates to Profit/Net Worth as a percentage – 13.6% against a prior year of 19.0%. Inventory turnover, defined as the turnover to net worth, indicates how many sales pounds are generated with each pound of investment. This volume ratio equates to 4.51 compared with 4.50 for the same 100 companies last year. Location Since the inception of the Top 100 we have occasionally reviewed the geographic headquarter location from which the Top 100 companies conduct their business.

>>>

AUGUST 2013 39

TOP 100 ANALYSIS

TOP 5 REGISTERED COMPANIES IN SCOTLAND & WALES (EXCLUDING FINANCIAL SERVICES) SCOTLAND

Company

Account Date

Turnover

Pre-tax Profit

Net Worth

Employees

John Wood Group PLC

31/12/12

6,821m

336m

388m

33,479

BP Exploration Co. Ltd

31/12/11

3,549m

3,469m

6,515m

–

Weir Group PLC

28/12/12

2,538m

424m

(147m)

13,245

Mitie Group PLC

31/03/13

2,121m

59m

(134m)

68,890

John Menzies PLC

31/12/12

1,904m

32m

(44m)

22,151

WALES

Company

Account Date

Turnover

Pre-tax Profit

Net Worth

Employees

Cisco International Ltd

28/07/12

7,980m

(191m)

49.9m

203

GE Aircraft Services Ltd

31/12/12

1,444m

49.1m

289.6m

1,291

DWR Cymru Cyfyngedig

31/03/12

695m

(73.6m)

328.9m

1,931

Calsonic Kansei Europe PL

31/03/12

621.3m

8.5m

(45.9m)

1,656

Celsa (UK) Holdings Ltd

31/12/12

580.3m

(12.2m)

47.2m

1,111

It’s interesting to note that since 2004, businesses domiciled in Belfast have increased by 18.6%, Tyrone by 40%, Fermanagh 33% whilst Antrim has decreased by 24%, Armagh by 25%, Down by 50% and Derry has remained constant. Top 100 Risk & Payment Analysis For the first time, while providing analysis on the Ulster Business Top 100 companies, it has been decided to share how the Top 100 companies are potentially viewed by their suppliers who, in a significant number of cases, will be from outside Northern Ireland. D&B provides a number of measures used when gauging customer performance. For this exercise we are catagorising the Risk Indicators attached to each of the top companies, in addition to their Failure and Payment Scores. The Risk Indicator/Failure Score D&B’s Risk Indicator provides an overview of the likelihood of business failure within the next 12 month period (risk group 1 are considered strong, risk group 4 are considered poor). It is a quartile representation of the D&B Failure Score and as would be expected with companies of the standing of the Top 100, the vast majority of companies are regarded as being “strong” with low risk of failure. The D&B Failure Score attributed to each company is a numeric value ranging from 1

40 AUGUST 2013

“While profitability has tightened, the value of the companies to their shareholders continues to rise significantly.”

TOP 100 ANALYSIS

to 100 (1 being a huge risk and 100 no risk). Benchmarked against the rest of the businesses in the UK, each business will fall into one of the various percentiles. The province’s Top 100 companies have an average score of 72, indicating they are in the top 28% of the UK business universe. Paydex Score The D&B Payment Score (or Paydex) is a two digit score that assesses a business’s payment history based on trade experiences collected through D&B’s Trade Program i.e. how it has been paying its bills. A Paydex Score of 80 indicates prompt payments (in the past). A Paydex Score greater than 80 indicates payments before due, which is no longer a norm and a score of less than 80 indicates slow payments. The majority of Top 100 companies are paying their suppliers on time (although a number of companies within the Top 100 won’t have any payment record as Holding Companies etc are unlikely to have any Trade Creditors of their own). In essence 76% of the Top 100 are paying their suppliers within 20 days of agreed due dates. Generally the average risk is equal to a D&B Payment Score of 60. When the score drops below 44, the risk level significantly grows, while a score over 70 represents a minimal risk. Reader Notes In certain instances comparisons have been made with other Top 100 editions. These comparisons may include figures for companies not included in the current Top 100 due to fluidity of results. A date of 30/06/13 has been used as a cut off for inclusion of later financial results within the Ulster Business Top 100. Financial Information has been gathered using D&B’s Investigate Market Research & Analytics Tool. PATTON GROUP LTD ROTARY LTD

WHO’S IN KINGSPAN ENVIRONMENTAL COONEEN TEXTILES HENRY GROUP T.W. SCOTT & SONS LAGAN ASPHALT

MIVAN O’HARE & McGOVERN TITANIC ISLAND LTD

WHO’S OUT

About D&B D&B provides the information, tools & expertise to help Customers to Decide with Confidence. D&B enables customers to have instant access to objective, domestic & global information whenever and wherever they need it. Customers use D&B Risk Management Solutions to manage credit exposure, D&B Sales & Marketing Solutions to find profitable customers and business partners and also utilise D&B Supplier Management Solutions to assist in managing supplier relationships both efficiently and profitably. More than 90% of the Global 1000 rely on D&B as a trusted partner to enable confident business decisions. For more information visit www.dnb.com/uk or e-mail cushleyj@dnb.com

AUGUST 2013 41

Top 100

Companies

Data researched and compiled by...

Sponsored by

www.equalityni.org

TOP 50 EMPLOYERS 1-25

Only employees working more than 16 hours per week are counted in this list

Rank

Company

Line of Business

City / Town

No. of Employees

TESCO PLC

FOOD RETAILING

NEWTOWNABBEY

9,456

SHORT BROTHERS PLC

AEROSPACE ENGINEERING

BELFAST

4,976

ASDA STORES LTD

RETAIL

DUNDONALD

4,401

SAINSBURY’S SUPERMARKETS LTD

RETAIL

BELFAST

3,915

ASDA Stores Ltd QUEEN’S UNIVERSITY OF BELFAST

BELFAST

3,867 3,771

MOY PARK LTD

UNIVERSITY OF ULSTER

MARKS & SPENCER PLC

RESOURCE GROUP

JOHN HENDERSON HOLDINGS LTD

FOOD DISTRIBUTORS

NEWTOWNABBEY

2,522

ULSTER BANK

BANKING

BELFAST

2,496

CATERPILLAR (NI) LTD

GENERATOR MANUFACTURER

LARNE

2,333

FIRSTSOURCE SOLUTIONS LTD

BUSINESS OUTSOURCING

BELFAST

2,238

BOOTS UK LTD

RETAIL

BELFAST

2,227

BRITISH TELECOM (NI)

BELFAST

2,435 2,107

DIAMOND RECRUITMENT GROUP

BELFAST

2,101

TELEPERFORMANCE

BANGOR

1,9982,008

ALLSTATE NORTHERN IRELAND

BELFAST

2,004

PREMIER EMPLOYMENT LTD

BELFAST

1,8391,929

LLOYDS BANKING GROUP

BANKING

BELFAST

1,911

DANSKE BANK LTD

FINANCIAL SERVICES

BELFAST

1,829

DUNNES STORES (BANGOR) LTD

RETAIL

BELFAST

1,797

GRAFTON RECRUITMENT LTD

RECRUITMENT AGENCY

BELFAST

1,698

INDUSTRIAL TEMPS LTD

RECRUITMENT AGENCY

BELFAST

1,655

GOLF HOLDINGS LTD

WINE & SPIRIT MERCHANTS

BELFAST

1,612

68 AUGUST 2013

Grocery HIGHER EDUCATION

Dundonald

POULTRY PROCESSING Support Services HIGHER EDUCATION

CRAIGAVON

3,157

Belfast CRAIGAVON

3,3093,132

RETAIL INDUSTRIAL CLEANING Poultry Processors

Engineers COMMUNICATIONS

Craigavon

Larne

RECRUITMENT AGENCY Banking CALL CENTRES

Halifax

SOFTWARE DEVELOPMENT RECRUITMENT Recruitment Services AGENCY

Belfast

LISBURN

2,556

LISBURN

2,527 2,885

TOP 50 EMPLOYERS 26-50

Rank

Company

Line of Business

City / Town

No. of Employees

FIRST TRUST BANK

BANKING

BELFAST

1,480

SEAGATE TECHNOLOGY (IRELAND)

ELECTRONIC EQUIPMENT

LONDONDERRY

1,343

NORBROOK LABORATORIES LTD

VETERINARY PHARMACEUTICALS

NEWRY

1,331

G4S SECURITY SERVICES (UK)

SECURITY

BELFAST

1,305

ENDERBY

3,867 1,291

BELFAST

1,285

BELFAST

3,3091,203

BELFAST

1,083

BELFAST

1,069 2,885

ASDA Stores Ltd NEXT PLC

Grocery

RETAIL

Dundonald

BANK OF IRELAND

BANKING

ARGOS LTD

FIRST CHOICE SELECTION SERVICES LTD

SANTANDER UK PLC

ICELAND FOODS LTD

RETAIL

BELFAST

1,034

DUNBIA

MEAT WHOLESALERS

DUNGANNON

1,016

THE CO-OPERATIVE GROUP

RETAIL & WHOLESALE DISTRIBUTORS

BELFAST

995

WRIGHTBUS LTD

VEHICLE BUILDING

BALLYMENA

988

CITIGROUP

FINANCIAL SERVICES

BELFAST

987

MICHELIN TYRE PLC

Engineers TYRE MANUFACTURERS

ROBINSON SERVICES LTD

INDUSTRIAL CLEANING

B&Q PLC

NIE POWERTEAM LTD

LBM

GALLAHER LTD

TOBACCO MANUFACTURERS

BALLYMENA

936

HCL BPO SERVICES (NI) LTD

BUSINESS OUTSOURCING

BELFAST

924

QUINN BUILDING PRODUCTS LTD

CONCRETE PRODUCTS

BALLYQUIN

905

PRIMARK STORES LTD

RETAILER

BELFAST

905

SCHRADER ELECTRONICS LTD

AUTOMOTIVE ELECTRONICS

ANTRIM

905

ALMAC CLINICAL SERVICES LTD

CLINICAL TRIALS

CRAIGAVON

903

Support Services RETAIL

Belfast

RECRUITMENT FINANCIAL SERVICES Poultry Processors

Banking RETAIL

Craigavon

Larne

BELFAST Halifax COLERAINE

CONSULTANCY SERVICE MARKETING/OUTSOURCING Recruitment Services

BELFAST

Belfast

2,435

984 968

1,998 943

BELFAST

939

BELFAST

1,839 937

AUGUST 2013 69

TOP 50 EMPLOYERS

Helping employers get equality Michael Wardlow, Chief Commissioner at the Equality Commission for Northern Ireland, outlines why there’s still a long way to go when it comes to equality in the workplace.

any of the most prominent press stories about the work of the Equality Commission involve discrimination cases – instances where businesses have got it wrong in the way they treated a worker or a customer, and as a result have ended up in tribunal or court. These cases involve companies breaching equality law in Northern Ireland which forbids discrimination on the grounds of sex or marital status, sexual orientation, religion, political opinion, race, disability, age, and in relation to equal pay between men and women. In the year 2012-13, the Commission supported complainants to receive a total of £652,219 in compensation from public and private employers, and from large and small businesses. All our cases are publicised in order both to illustrate what amounts to unlawful discrimination and, more importantly, to highlight what employers can do to avoid it. Most of the cases settle before a hearing and, in these circumstances the Commission always insists that the terms contain firm commitments to make positive changes in equality and employment practices. These aren’t just “paper promises” but something which is rigorously pursued by the Commission. Our follow up involves working with employers to look at what went wrong and to help them ensure that as far as possible in future there will be full equality of opportunity and freedom from harassment for the workforces and customers of those businesses. Following up on discrimination findings is by no means the main focus of the Commission’s work with employers, as we also work extensively with businesses to explain existing equality legislation and help them comply with it. To this end, over the past year we have helped employers develop policies in areas such as recruitment and selection, anti-harassment measures, disability and age discrimination. We also monitor progress on affirmative action agreements which employers have put in place to combat an imbalance in their workforce. In the majority of the employers concerned, this monitoring has shown evidence of improvements in applicant flows, although

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limited recruitment in recent years has inhibited significant progress. But of course, discrimination continues to occur, and often along the familiar fault-lines. Our legal advice team still takes around 3,000 calls a year from people who believe they have suffered discrimination, and the majority of these are to do with their treatment in the workplace. Over the last six years, the biggest single cause of complaints at work, across all equality grounds, has been harassment and problems with the working environment. It is the main cause of complaints in the fields of religious and political belief, sexual orientation and race. For women, issues around pregnancy and maternity continue to be the most common area every year. Sickness absence causes most problems for disabled people, and failure to appoint or shortlist was the most common problem involving age discrimination. The Commission’s advice and guidance services to employers are free and confidential

and we are delighted to note that a recent survey revealed that they can have a very positive impact for the organisations who make use of them. We found that 33% of all the organisations surveyed had made changes in their equality or employment practices as a direct result of their contact with the Commission and for those that had a significant level of contact this figure increased to 61%. Employers with less contact were less likely to have made such changes. Compliance is important for employers and so helping them to “get equality right” is core business for the Equality Commission. However, embedding good equality principles is also of great benefit to all employers and those employers who take the time and effort to put effective policies and procedures in place not only protect themselves from possible damaging and costly legal action but perhaps more significantly, make an important contribution to bettering equality of opportunity in our society.

TOP 50 EMPLOYERS

Sanjiv Goenka (right) met UK Minister Gregory Baker in Belfast recently

Firstsource eyes further expansion Global contact centre company Firstsource is committed to Northern Ireland, its Chairman, Sanjiv Goenka and Global Head of Sales, Iain Regan tell Ulster Business.

usiness Process Outsourcing firm Firstsource is formulating plans to open a new site in Coleraine which has the potential to create up to 500 new jobs for the region. Headquartered in India, the company set up in Northern Ireland in 2006 and currently employs 2,365 staff across its four sites in Belfast and Derry. Firstsource also holds the lease on a site in Coleraine and is in the early stages of exploring the potential to bring more jobs to Northern Ireland. “We are at tipping point in terms of capacity, we’re pretty much full across our eight UK centres and we’re now in the process of understanding where next,” said Iain Regan, the company’s Global Head of Sales. “There are places like Coleraine which are very much on the radar for our next stage of our

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evolution and growth. We think it offers the same sort of fundamentals as Derry,” he added. “It is a bit of chicken and egg as to when, but we’re working with Invest NI, who are actively supporting us in how and when we bring the right sort of business in. It is definitely a location we’d be keen to enter fully over the next few months and years.” Regan said the facility “can handle 500 to 600 roles” but would likely start with a small number of jobs the same way it did in Derry, where an initial 90 jobs gradually increased to 1300. Northern Ireland has been a success for Firstsource, which specialises in customer management services for UK brands such as Sky and O2, with a particular focus on the telecoms, financial services and healthcare sectors. It has delivered more than double the number of jobs it committed to creating seven years ago. However, the company’s ability to grow

had become constrained by high debt levels following a US acquisition. As a result it was acquired last year by the Indian conglomerate RPG Goenka Group, which specialises in turning around “businesses under stress”. The Kolkata-headquartered RPG Goenka Group started life 200 years ago as bankers to the East India Company and now has 15 companies in its fold in sectors as diverse as infrastructure, automotive, IT, pharmaceuticals, power, music and food retail. Mr Sanjiv Goenka, chairman of RPG Goenka Group, sees huge potential in the contact centre market as companies increasingly focus on taking cost out of their business. “There is significant potential for growth, without a doubt. The first 12 months will be focused on consolidation of the balance sheet and on existing accounts. But we’re already beginning to see improvements in the bottom line,” he said. “Typically every company we have invested in, we have been successful in growing them, not marginally but in multiples.” Unlike some of its key businesses in India – such as power and retail – the contact centre space is not heavily regulated by the government, meaning growth can be achieved a lot faster. “When we looked at Firstsource it was stressed at the time but it was in an area which was not regulated, it has an international footprint and is predominant in the UK. It also had a very strong management team which could be challenged to deliver more,” he said. Mr Goenka said RPG Group is committed to Northern Ireland, a region where “we believe we can build a mutually rewarding relationship”. “Frankly we are very happy with what we see in Northern Ireland. We do believe it is a location where we could grow. There are a couple of breakthroughs which Iain and his team have made which will be made public shortly and we do hope we will be able to increase the number of seats here,” he said. Firstsource has recently won an in-sourcing deal with a bank in Northern Ireland, which will see it create 120 new customer service roles within the bank’s own offices in Belfast. Iain Regan says the ability to attract young talent into the company and retain them for the long term – particularly in Derry – means the future for Firstsource in Northern Ireland is bright. He added: “Northern Ireland is the best across our UK sites for talent recruitment and retention and we get great support from Invest NI, politicians and from the communities. The fundamentals are still solid.”

TOP 50 EMPLOYERS

"I know we have a bad image" Ellvena Graham, the Head of Ulster Bank NI, knows the lender has lost a lot of goodwill in recent years, but believes the bank remains an important part of the fabric of the Northern Ireland economy.

“I

would like to apologise to customers and staff to whom we caused unnecessary concern last week following initial reports of further job losses and branch closures.” That was the opening statement by Ellvena Graham, Head of Ulster Bank NI, appearing in front of Stormont’s Enterprise Committee last month following reports the bank was to slash 1,800 jobs and close up to 60 branches. Thankfully those numbers – stemming from a confusing investor briefing – were incorrect, with nearer 950 redundancies to occur across the island of Ireland in the next three years on top of the 950 announced in early 2012. The cuts will be achieved through “natural attrition” with only a few hundred jobs – and less than ten branches – likely to go here. It probably wasn’t the reintroduction to the Northern Ireland business community Ms Graham would have liked. A 30-year veteran of the bank, the last 20 spent in Dublin, she was appointed to the newly created role of Head of Northern Ireland in March. “We’ve a very different position up here being number one and having 30% of the business market to what we have in the Republic, where we’re very much the challenger brand. We realised as an executive team we needed to refocus back on Northern Ireland,” Ms Graham told Ulster Business. She is already well aware the reputation Ulster Bank has in business, government and media circles is not good following the bailout of its parent company and an IT failure last summer which left customers unable to access funds for several weeks. “Of course there is an image problem and I am acutely aware of that. Our image was tarnished last year with the (IT) systems incident, there’s no point ignoring that. So we have a lot of ground to make up.

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“One of the things I do want is to have a bank here in Northern Ireland that the people are proud to work in, that customers are proud to do business with. I don’t think either of those things are true just yet and I realise it is not going to happen over night. It is a big job for us but it is something we can absolutely turn around.” Ulster Bank remains a major employer in Northern Ireland, with over 2,000 employees and Ms Graham is quick to praise the staff in the bank’s branches for maintaining “healthy” relationships with customers through the current turmoil. But the future of Ulster Bank is still uncertain as the Government looks at the best way to return its taxpayer-owned parent company, Royal Bank of Scotland, to private ownership. There has been speculation Ulster Bank could be used as a vehicle to hive off bad loans, or sold to get RBS out of the Irish market. The Ulster Bank boss says while she can’t predict what will happen she is “not overly concerned.” “My message to staff is simply to get on with the day job because the bank is on a trajectory to return to profit. We shouldn’t lose focus on that because the rest of it is completely outside our control,” she said. “Ulster Bank is an integral part of RBS. What happens next remains to be seen. But Ulster Bank is important to the Northern Ireland economy and I don’t think that’s lost of the Treasury at all.” Although Ulster Bank’s most recent results showed a reduction in impaired loans, the bank faces a struggle to return to profit after contributing a £1bn loss to RBS’s balance sheet in 2012. The bank has lent over £80m to 500 customers through the UK government’s Funding for Lending scheme, but says demand is still muted. However Ulster Bank has been singled out by Finance Minister Sammy Wilson for being overly aggressive in

Ellvena Graham says Ulster Bank is ‘moving in the right direction.’

calling in loans or changing repayment terms with business customers. Ms Graham acknowledges the concern. “Yes we may have been a little bit faster than other people to face up to some of the problems we have, but I don’t think that’s the wrong thing to have done. I do believe it is better all round if we can engage with the customer and come up with a solution so we can all move on. I don’t see that as being more aggressive, I just think we are getting on top of it,” she said. In fact the Ulster Bank executive says it is seeing a lot of businesses coming back to its “good book” from RBS’s Global Restructuring Group. “That’s encouraging for us to see that because these are businesses that would have been earmarked as having problems which are now being managed in a normal relationship within the corporate bank again. We’re seeing the right signs. I’d like to see that sustained before we start shouting from the rooftops but it is moving in the right direction.”

TOP 100 COMPANIES

SHS moving fast to stay on top Already an established player in the fast-moving consumer goods sector, the SHS Group is on the lookout for new opportunities and new brands, according to the company’s Managing Director, Michael Howard Michael Howard has very high standards for the SHS Group, the Belfast-based business at the forefront of the fast moving consumer goods sector. Established in 1975, the group’s business is split evenly between its own food and drinks brands and brands owned by other companies, for whom it provides sales and marketing services on an agency basis. Its 2011 figures – which appear in the Top 100 - show turnover of £430m, up from £370m, and pre-tax profits of almost £26m. The big increase in turnover was driven partly by growth in its own brands and partly by a number of significant agency gains – among them sales and distribution contracts for Leaf Confectionary (who make Chewits) and Heineken’s tequila-flavoured beer Desperados. However, while 2011 was very strong for the company, Howard says 2012 was “more challenging” and while “95% of companies would be delighted” with the still robust numbers, he is less pleased because they show a decline from previous highs. “Unfortunately, when we do publish our 2012 accounts you’ll see a reduction in turnover because one of the vagaries of agency business is that it comes and goes and we lost the Heineken Desperados business,” explains the Managing Director. “We did a great job with it and because it was so successful the brand owner decided to take the business back in house. Sometimes you lose a brand because you do almost too good a job! That’s part of the agency model. But it is also the reason we want to have our own strong brands – so we are in control of our own destiny,” he adds.

Michael Howard

MEETING THE CHALLENGES The SHS Group’s own range of premium brands includes WKD, Shloer, Bottlegreen, Merrydown Cider, Farmlea and Maguire & Paterson matches. Through its sales and marketing divisions the company also distributes a portfolio of wellknown brands such as Jordans, Ryvita, Nivea, Finish and Mars Drinks. It is also the largest private label supplier of herbs and spices and wet condiments and a

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major supplier of milk puddings in GB. Howard believes the agency contracts provide useful insight into how other companies are being innovative with their brands. In turn, it brings skills from its experience of brand positioning, promotion and pricing with WKD and Bottlegreen to its clients, something other sales and marketing companies are not able to offer. For every brand lost on the agency side through corporate activity – for example the recent loss of the Simple brand following its acquisition by Unilever – the MD says the SHS Group has been able to pick up a replacement – for example, in the same personal care category it now has Soft & Gentle, which was recently bought by Keyline Brands. However, the brand which has been the driving force for the Group – WKD – is under

pressure, with the premium packaged alcoholic drinks sector in decline as flavoured ciders and beers cut into the market. It’s a trend the Group has responded to with the launch of Dead Crow – a bourbon based beer – and Cuvana – a rum based drink. The move heralds the company’s first major venture into the premium packaged lager market, which is estimated to be worth over £1bn a year in the UK. Both drinks are already being sold in Tesco stores and the MD says the Group is “quietly pleased” with performance so far. But Howard says the onus is now on its other businesses to step up to the mark. “WKD was launched in 1995 and so it has had a 17 year lifecycle,” he explains. “It’s still an £189m brand, it is still significant and still at the core of SHS and will remain so. It is just not as dominant. So therefore Shloer, Bottlegreen and

TOP 100 COMPANIES

strengthen in grocery and confectionary, although in some categories it is keen to grow – such as the cider market – there are limited opportunities. The MD says an equal number of offers cross his desk which don’t fit with its existing portfolio or the quality standards. “The difference now is that everyone knows the SHS Group is a major FMCG player in GB and Ireland so if companies are coming on the market, we’ll know about them. There’s nothing stopping us other than finding the right targets,” says Howard. “We are very nearly debt free and we have significant capacity to borrow. We’re one of the companies banks are rushing to lend money to and would like us to borrow more. We’re looking to grow the business by a mixture of acquisition, growing the brands we have and additional agency business.” The wider economic situation and on-going squeeze on consumer budgets the Herbs & Spices business are proportionately more important to the group in taking the business forward.” The growing herb and spice business produces own label dry spices and wet condiments for retailers including Asda, Morrison’s, Waitrose and M&S. Turnover of the division is up to £10m and Howard expects further growth as it develops new pastes and sauces that tap into the growing trend towards home cooking. The SHS Group is also investing in further new product development, responding to market demand in some categories and creating the market themselves in others. As well as the flavoured beers and launching WKD in cans, the company has developed a new range of flavoured tonics under its Bottlegreen brand, which are now being stocked in Sainsbury’s. SHS Group was inspired to launch the tonics after spotting a gap in the market through its work with premium gin makers Gordon’s and Tanqueray. “We’re looking at a couple of really innovative ideas, but the question is always, do you go first or do you respond to the competition? It is all about timing,” says Howard.

means the FMCG market remains highly competitive – but the SHS Group’s managing director says this is nothing new. “I don’t think it has ever been any different in that FMCG is extremely challenging. There are maybe six major retailers plus discounters, so it is an extremely competitive marketplace,” he says. “Consumer confidence has been very low but I take the view we’re now bumping along the bottom and the economy is stabilising. But it is very sporadic,” he adds. “I would already be saying that 2013 will be better than 2012 for us. It is not about reducing our focus on WKD it is about growing the other areas. The profits from our acquired companies will exceed the core profits, which is the first time that will have happened, and the strategy of using profits generated by WKD to build further pillars has been proven. So, we are robust and capable of being taken to another level.”

“We’re looking at a couple of really innovative ideas, but the question is always, do you go first”

ACQUISITIONS ON THE CARDS? Although Belfast is the company’s centre of excellence for finance, logistics, IT and Group marketing, SHS now has a significant presence in Gloucester, with senior staff split between the two. The geographical spread across Great Britain and Ireland gives it eyes and ears across the market and Howard says the firm is always on the lookout for potential acquisition opportunities. The business is in particular looking to

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TOP 100 COMPANIES

NI can be leadership leader Anne Clydesdale, the director of Queen’s University’s William J. Clinton Leadership Institute wants to help our business people compete globally by sharpening their leadership skills.

here is no reason that Northern Ireland cannot become a destination of choice for executive education that rivals the best in the world. That’s the belief of Anne Clydesdale, director of the newly rechristened William J. Clinton Leadership Institute at Queen’s University’s Riddel Hall. Established in September 2012, the Institute has already seen huge demand for its leadership development programme from organisations in both the private and public sectors, including the 20 leading companies in its Founder’s Club. Now, Ms Clydesdale says the plan is to utilise the Queen’s brand and build on the goodwill of the successful G8 meeting to build the Institute’s reputation overseas and collaborate with business schools in the US. “Our vision is really to make a meaningful difference to supporting our local economy and wealth creation by helping to strengthen the leadership capacity we have in the private and public sector, particularly in the private

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sector and the SME community,” she said. “But I also want to develop strategic links with business schools across the world. I want more and more people to see Belfast as a destination for getting involved in high end executive education. Why shouldn’t people want to travel to Belfast for executive education in the same way as they do to the US or Switzerland?” The decision to honour President Bill Clinton’s contribution to the Northern Ireland peace process by naming the Institute after him is one likely to prove beneficial to those ambitions. Clydesdale said the president is aware of the work it is doing to support local businesses and help them grow their markets internationally. “We did consider lots of brands but we were delighted when President Clinton decided to lend his name to this institute because he himself is a leader of enormous stature and his ability to sustain his leadership brand beyond his presidency is testament to the type of leader he himself is,” she explained. “He is passionate about making a difference and has that fantastic element to his personality that perhaps makes it easier for him than others, that he has amazing charisma. Leaders need that ability to identify with people and have a positive impact on them. As a leader he has a fantastic brand,” she added. “We are in a post-conflict situation. Northern Ireland has a great offering in terms of skills, it is a great place to come and transact business, and it has great potential. This is about creating a new future for Northern Ireland and I think President Clinton wants to continue to be part of that process.” Having asked SMEs and the companies in its Founders Club what they wanted, the Institute came up with 70/20/10 – an experiential learning model for busy adult learners that uses a virtual learning environment to give information to participants before they ever go to a class. “A lot of leaders have the qualifications but what they need is assistance and help and advice. Short interventions that will help them bring about both personal change and organisational change. To help invigorate them and deliver strategy. We discovered they didn’t want two year programmes, they wanted short programmes that were intensive, high energy and they wanted to be able to evidence the result,” the director said. “We try not to take them out of their business environment for a period of time that would adversely impact on the business.” The longest course only involves nine days out of the office over a five month period, but much of the learning can be used between classroom sessions with the help of personal coaches. Anne believes Northern Ireland doesn’t lack the right calibre of people, but doesn’t believe business leaders have necessarily been equipped with the right skills to take their business international. “A big part of why the leadership institute has been created is to help SMEs to grow exponentially and developing capacity at leadership level is one way to do that,” she said. “It is about trying to encourage our leaders to lift their sights up, to scale their ambition beyond these shores and into international markets. Most of the organisations have very clever people in them but need help to think bigger about what they are trying to achieve.”

TOP 100 COMPANIES

From contact to contract: how do we secure inward investment? Every foreign investment secured by Invest NI is hard won and the result of many months, even years of work. Barry McBride, Invest NI’s Executive Director of International Business, gives an insight into what goes on behind the scenes.

Politicians play a key role in selling Northern Ireland to overseas investors, such as Japanese owned Terumo BCT. It used the visit of Japan’s Prime Minister Shinzo Abe to the G8 meeting to announce plans to create 416 jobs in Larne

ike any sales people we have to knock on a lot of doors before we get an opening, and then work very hard to convert those prospects into actual projects. Fortunately, in selling Northern Ireland plc we have a lot to offer, but we’re also competing with many other countries and economic development agencies around the world. So our approach is very targeted. We do a lot of long range planning, looking at how sectors are developing globally, identifying where growth will come from, where the skills of our people can be best used, and trying to pinpoint and package what is unique about Northern

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Ireland that sets us apart from our competitors. For example, in recent years we’ve secured a number of investments by legal companies. That was the result of us recognising that there were many high quality legal graduates here but not many jobs. We looked at what the big legal companies were doing globally and realised that we had a resource that matched their needs. The result was hundreds of new high quality legal jobs for Northern Ireland. Similarly we were one of the first to target the data analytics sector and as a result won a big investment from Deloitte which created 177 jobs for graduates in that field.

GETTING THE LEADS Having identified the sectors we want to target the first step in the journey to winning an investment is to carry out detailed research. Our Business Development Managers based in Belfast and in our 13 overseas offices monitor business activity around the world through the press, social media and basically keeping their ears to the ground. They review companies’ annual reports looking for key words which will then trigger an approach to the company to try to get it interested in talking to us. About 20 per cent of companies researched will materialise into potential leads, which is a

TOP 100 COMPANIES

good conversion rate. Once a warm lead is identified our Business Development Director in the relevant overseas office will work to convince the company to visit Northern Ireland to see what we have to offer. That can take many months. Sometimes we get lucky and contact a company just when it is about to embark on a project and they’re interested to know what Northern Ireland can offer. We also get unprompted requests for information from companies that want to find out about Northern Ireland as part of their global trawling. And occasionally we get a phone call from a company because a member of their staff has been involved in an investment in Northern Ireland when they worked somewhere else, and has been impressed enough to advocate for us. Usually however, it’s about convincing people to come and visit. TAILORING VISITS Every year we get over 100 visits from potential investors and each of these visits is tailored for the company. Depending on its nationality and interests we’ll involve politicians, the universities, other government departments, property developers, and specialist Invest NI staff. If the company is Indian we’ll involve representatives from the Indian community here and the same with Chinese and other nationalities. We’ll ensure that the company representatives see all the areas of Northern Ireland that meet their needs so that they can decide for themselves which region best suits. It’s also very important to involve other companies that have invested here so that they can share their experience of operating here. Their testimonial is hugely important to convincing investors of the benefits of setting up in Northern Ireland. Often the biggest challenge is getting past the cultural perceptions investors have about Northern Ireland, fuelled by negative media coverage. They need to be sure that this is a stable, business friendly environment and that there is no risk to them financially or to their brand.

Invest NI identified the data analytics sector early, leading to Deloitte’s decision to create 177 jobs.

Visits can take up to two days, but inevitably the companies go away impressed by what they’ve seen, and this first visit may be followed up by many others. Of course every visit doesn’t result in a project any more than every sales call results in a sale. However, if we succeed in impressing potential investors, that may result in an approach from them years down the line. KEEPING UP THE CONTACT Because it’s a long-term process our overseas people are working in a number of ways to keep the Northern Ireland profile high. Our overseas offices run roundtable events featuring expert speakers. By inviting companies along to these events we get to talk to them in a non-sales environment and that‘s very valuable in cultivating their awareness of Northern Ireland. Our politicians also play a key role during their overseas trips when they will visit companies to reinforce a positive image of Northern Ireland. We’ve also joined with Northern Irish Connections to get involved in a diaspora initiative to develop links throughout the world with Northern Irish people and people who have worked here, who can play a part in promoting this region.

“Typically it takes 18-24 months from first contact through to getting a signed investment agreement.”

REELING IT IN Having made the approach, got the visit and hopefully impressed the company we get down to the nitty gritty. We might start out being in competition with several other countries but gradually the company will whittle down the number of regions they are interested in. At this stage our investment managers will negotiate with the company on all the financial and non financial support that’s available. We operate under stringent EU guidelines so we need to get a balance between what the company wants and what we want. We want value for money for the tax payer so the potential investor must present a project that is viable and sustainable without our support. Our assistance is about convincing them to do more, faster. It’s important that we challenge the company. We’re looking for long-term sustainability not short term fixes. It’s about us proving that this location is viable for them, while they prove that their project is viable for us in the long term. So we do a lot of due diligence on new inward investors. Typically it takes 18-24 months from first contact through to getting a signed investment agreement. But that’s not the end of the story. Now our client teams take over and our account managers work to maintain the momentum and nurture the relationship that we’ve built up. This customer care helps to ensure that the investor has a good experience here and that often leads to reinvestment. For the international investment team it’s back to the start in the quest to secure the next investment for Northern Ireland.

AUGUST 2013 81

PROPERTY

Property market fighting to emerge from malaise

By Colin Mathewson, Director, Osborne King

ncreasing levels of transactional activity and better quality product attracting purchasers appear to be the first indications that the transition from recession to recovery may finally be underway within the commercial property market. However, the picture remains partly skewed, featuring areas of disappointing market response and, in particular, limited occupier demand across most sectors, which remains a key impediment to recovery. The most positive activity so far in 2013 has been in the investment market, with a number of significant transactions finalised such as LaSalle’s purchase of Sainsbury’s in Ballymena for £17.85m on behalf of the Northern Ireland Local Government Officers Superannuation Committee. More recently, Bedford Hotels Ltd, owners of Galgorm Resort & Spa, completed the purchase of the Scottish Mutual Building at Donegall Square North in Belfast. At the time of writing, Clandeboye Retail Park in Bangor has been agreed for sale to a UK property company and Linen Green in Dungannon is also generating considerable local interest. It is extremely encouraging to see the range of potential purchasers both from within Northern Ireland and across the UK and we expect further sales activity in the second half of the year. The retail market continues to fight its battles with the recessionary drop in retail spending compounded by issues as diverse as the poor

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summer weather, flag protests earlier in the year and companies either going into administration or closing down completely. The key feature in the retail sector is the lack of active requirements making it difficult to fill vacancies and reinvigorate retail centres quickly. This is more relevant to town centre and shopping centre locations, with the out-of-town centres filling vacancies more effectively. The discounters continue to dominate activity, with Home Bargains in particular pushing ahead with store openings. The office market has experienced a disappointing level of occupier demand with only 32,000 sq ft leased during the first three months of 2013. On a more positive note, a number of large office lettings are in the pipeline including Land & Property Services’ proposed move to Lanyon Place, which will involve taking office space of around 90,000 sq ft. Key concerns within the Belfast city centre office market focus on the availability of Grade A stock – particularly as no Grade A stock is under construction currently – and accommodation available for letting immediately. Although rental levels for prime Grade A stock remain at c. £12.50-£13.00 per sq ft, the lack of space available on the market is likely to result in upward pressure on rents in the short to medium term. The industrial property market remains depressed with limited transactional activity

driven by end-user demand for specific investment product or project needs. The industrial warehouse sector has had another difficult year, with the purchase of warehouse units at an all-time low. Lettings have been reasonable albeit it is clearly a tenants’ market as landlords reduce rents to retain tenants and offer attractive deals to new tenants. Capital values for larger warehouses are achieving £10 per sq ft to £30 per sq while new-build, smaller units in traditional warehouse locations are achieving £20-£50 per sq ft. The licensed trade continues to face extremely challenging conditions and the number of pubs coming onto the market shows no sign of diminishing. Despite these difficulties, we have established ourselves as clear market leaders in this sector and have been involved in a number of recent sales, which demonstrate that demand clearly exists in the right location. Although the licensed market remains extremely testing, it would appear that conditions are stabilising and that buyers are willing to get involved, but only by adopting a realistic view with regard to value. There is no doubt that the market still has many hurdles to clear before real growth can be secured, however, it is important to recognise that progress is being made. The property market is driven by confidence and availability of finance and although we have some way to go these small positive steps are vital for the market’s recovery.

TECHNOLOGY

Chase away cloud blues with Azure By Kyle Johnston, Sales Manager, Leaf Consultancy

eaf, a Microsoft Azure Circle partner understands that the power, popularity and cost effectiveness of cloud-based computing as it continues to grow. That is why Leaf believe you should consider running your internet based or on-premises applications on Microsoft’s Windows Azure technology platform. Windows Azure is an on-demand, cloud-based computing service. Through the cloud developers can create and run applications and maintain their application’s data and not just for internet based applications, but also on-premises applications can use cloud-based resources. Four Ways Your Business Can Benefit from Windows Azure For many Leaf clients, the best strategy to improve the efficiency, reduce the costs, and enhance the security of their IT infrastructure is cloud computing. Here are the top four ways it can help your business succeed. 1. Improve Your Bottom Line The Windows Azure platform saves you money by reducing your capital costs and allowing you to pay only for the IT services you actually use. The consumption-based pricing helps to keep your IT spend predictable, while allowing you to keep pace with your IT needs. According to Leaf, which offers a Windows Azure Assessment consultancy, organizations are increasingly looking to cloud computing to increase operational efficiency, reduce head count, and improve their bottom line. 2. Free youR Focus Migrating to Windows Azure can eliminate the complex, costly tasks of purchasing, installing, and supporting the hardware and software that your company relies upon, freeing you to focus on your core business. 3. Easily Scale IT Services The Windows Azure platform allows you to increase your IT infrastructure simply by upgrading your level of service. You can also take advantage of development tools, automated service management, and Microsoft’s global data centre presence to give your business a competitive edge and respond quickly to growth opportunities. 4. Open New Markets • If you’re an application developer, you can use Windows Azure to sell your innovations as an on-demand service, instead of an on-premises application. • If you’re an IT customer, the Windows Azure platform gives you access to business-enhancing applications that you might not otherwise be able to afford or support The beauty of cloud based platform services is that you can rent a data platform and pay for it as you go, just like you do for utilities like water or electricity. That is why it’s called utility computing – you only pay for what you use. For more information please contact Kyle Johnston at kyle@leafconsultancy.com or call 02890897650.

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Has the death of the PC been exaggerated?

he personal computer’s days may be numbered, if figures contained in recent research are to be believed. Global PC sales have fallen for the fifth quarter in a row, making it the “longest duration of decline” in history, according to research firm Gartner. Worldwide PC shipments totalled 76 million units in the second quarter, a 10.9% drop from a year earlier. Gartner suggested sales had been hurt by the growing popularity of tablets and in particular the introduction of low-cost tablets. “We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets,” said Mikako Kitagawa, principal analyst at Gartner. “In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market.” Gartner said HP and Lenovo’s neck-and-neck competition in the market continues. While HP was slightly behind Lenovo, HP is a market leader in key regions including the US, EMEA and Latin America. Summing up reaction to the record fall in PC sales, Victor Basta, managing director of M&A advisory firm Magister Advisors, said: “The PC era was over some time ago.We are just seeing it become starkly evident now. We track tech investment activity closely and more money has been going into internet opportunities than software and hardware combined in the last 18 months, in anticipation of this trend. If you’re a store chain called PC World you might want to rethink your brand quickly if you want to be associated with the future of technology rather than antiquity.”

PROFILE

Serving up Success Tracy Hamilton, Co-founder and Director of Mash Direct, is the fifth of the alumni to be profiled in our “Ulster Business School – Leaders In Business” series.

Professor Tracy Hamilton, Co-founder and Director of Mash Direct; Visiting Professor at the Ulster Business School

What is your current role and why does it appeal to you?

How did you choose this career field and what was your path?

I am a Co-founder and Director of Mash Direct. Mash Direct is very much a family business and the appeal to me is the buzz and excitement of building our very own brand. I focus mainly on the marketing and management of the company. I am the principal person promoting the brand throughout the UK, Ireland and the Middle East. This involves spending a considerable amountA of time at exhibitions, making presentations, attending PR functions and engaging with both customers and consumers. Through Mash Direct, I am the first woman to sit on the Board of the Northern Ireland Food and Drink Association (NIFDA) and I also sit on the Board of Food NI. I am a very supportive and active member of Women in Business and the Institute of Directors.

Mash Direct was created after careful analysis of changing trends, eating habits and lifestyle patterns. My husband, Martin, decided to diversify our farming business to add value to our raw vegetables by producing quality convenient potato and vegetable accompaniments, with the taste and texture of home-made cooking. Perhaps business is something that is hardwired into my DNA. Enterprise and innovation runs in the family. From a young age my father, Paddy Mackie, a Director of Mackie’s (James Mackie & Sons) instilled a strong work ethic into all his children.

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What is the most rewarding part of your job? The most rewarding part of my job is the response that we have had to our products. We receive emails and compliments every day from people commending us on such wonderful products and explaining how we have transformed their lives, or their parents’ lives, as they no longer have the ordeal of peeling, chopping and cooking vegetables, and they always have clean kitchens! When exhibiting, we witness first-hand the ‘Wow factor’ and the element of surprise when people try our products for the first time, and say to us that “they are just like we make at home, but even better.” In addition, we have had some exciting visitors to Mash Direct, including David Cameron, the Duke of York, and Jamie Oliver. All were hugely complimentary about our

products and Jamie Oliver, in particular, wrote a wonderful review which takes pride of place on our awards wall outside our Boardroom. Winning UK Chilled Foods Manufacturing Company of the Year in 2011 was another major highlight. What is your own educational background and what training, education, qualifications are required for your type of work? I am a Business Studies graduate from what was then the Ulster Polytechnic, now the University of Ulster. In the very early years of Mash Direct, I decided that I should add to my knowledge by achieving other qualifications including Clait Word Processing, ECDL, (European Computer Driving Licence) and Sage levels 1, 2 and 3. All were necessary for me in my marketing role within the company and essential for an understanding of our accountancy system. The strength of the company has been reinforced by the diversity of training, education and qualifications of our workforce. Martin and I are both delighted that our two sons have joined the team, Lance with BSc Hons in AgriFood Marketing with Business Studies, and most recently, Jack with an MA in International Studies and Diplomacy, with Distinction. Do you have any current links with the Ulster Business School? I am delighted to say that I have very recently accepted a Visiting Professor appointment within the Ulster Business School. I very much look forward to making a positive contribution to help and inspire others.

Almac, the pharmaceutical company established by the late Sir Allen McClay, continues to build on its successes, with turnover rising to ÂŁ300m and employee numbers currently standing at 3,240 (1,981 in the UK and 1,259 in the US). Based in Craigavon, Almac has experienced growth this year through the creation of a new 13,400 sq ft formulation

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development facility and analytical laboratories. These labs focus on the development of tablet and capsule formulations for new drugs in the early stages of development that have not yet reached the market. Almac has also announced a commercial manufacturing expansion for a laxative drug that has recorded robust sales growth in the UK and Europe. With existing facilities at full capacity and further demand forecast in a number of new markets Almac is to focus all production in Northern Ireland,

requiring additional resources in Craigavon. The investment will deliver blending equipment, an automated packing and an integrated cartoning line that will enable high volume bulk commercial manufacturing to begin in November. Almac also invested $10m in a 100,000 sq ft facility in Pennsylvania, which was approved by the FDA in January. This has benefited Almac in Craigavon, which is now tasked to produce billions of tablets and capsules in its state-of-the-art facilities.

The board of Almac Group are pictured in one of the companyâ&#x20AC;&#x2122;s stateof-the-art laboratories in its Craigavon complex. From left to right are: John Irvine, Executive Director; Kevin Stephens, Executive Director, Colin Hayburn, Executive Director; Alan Armstrong, Chairman & Chief Executive and Stephen Campbell, Executive Director. PHOTO BY Richard Trainor

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TOP 100 COMPANIES

Norbrook prospers as demand for pharmaceuticals increases Newry-based Norbrook Laboratories has been a mainstay of the Top 100 for many years. Here, chairman Lord Ballyedmond tells Ulster Business about its plans for further growth. This is the 25th year of the Top 100 – what did Norbrook look like back in 1988 compared with today? Norbrook has expanded at least ten fold since then.

The recent announcement you are recruiting for 400 new jobs suggests Norbrook is still growing rapidly – what’s behind this growth? Yes, we are expanding. This is due to our increase in world market share of the veterinary pharmaceutical industry and pharmaceutical raw material. We are an export led company. The demand on the world market is increasing for pharmaceuticals, both medical and veterinary. The regulations are becoming more stringent. We have invested substantially in research and manufacturing facilities and we are now reaping the benefits. Are there any geographical markets which you would still like to break into or where you’re planning to increase your presence? Yes, we are expanding our markets in China however this is a more difficult market, both commercially and politically. We tend to approach it with caution but we are now accelerating our efforts and we see it as being of significant importance in the future. Do you have new products in the pipeline? We have a number of new products in the pipeline. Indeed we launch a new product almost every three months and will do so for the next three years. What sort of roles are you recruiting for and are you able to find enough qualified people on the island of Ireland? We are recruiting on a very broad front, in virtually all of the life sciences. Norbrook is a company unique in Northern Ireland and indeed in Ireland. We are one of the few companies in the pharmaceutical industry that produces our own pharmaceutical raw material, given specialist expertise in chemistry.

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We also produce finished dose form, again given specialist expertise right across the spectrum. No other company in the pharmaceutical industry, either north or south, works at the breadth and the level in the industry that we do. Unfortunately we cannot get the necessary qualified people with experience in Northern Ireland however we do get a lot of very well educated and suitably qualified young people who will be of great benefit to our company in the future when they get experience. Do you anticipate the need for more investment in coming years? Yes. Pharmaceutical companies will only survive if they invest in research and we will continue to invest. What are the challenges facing Norbrook? The main challenge facing the business is the

increased level of regulation. It is only proper that the public health is protected and in doing this, more money has to be generated for the increased level of scientific knowledge required to satisfy these requirements. What one thing would make doing business in Northern Ireland easier? There are very few real impediments to doing business in Northern Ireland, other than the availability of cash from banks. Will the company still be around and thriving in another 25 years’ time? Hopefully yes, although I will not be at the helm. I most probably will be looking up or looking down on those running it but I do hope I will leave a good model for them to drive forward and expand.

MANAGEMENT

CMI brings Bain on board P

hilip Bain, the co-owner of ShredBank – Northern Ireland’s largest on-site document destruction company – has been appointed Chairman of the Chartered Management Institute (CMI) in Northern Ireland. He will be joined by eleven new board members elected by CMI’s members across the province. CMI is the only chartered professional body in the UK dedicated to promoting management and leadership excellence. With a member network of over 100,000 managers, CMI is

the only chartered body in the UK that awards management and leadership qualifications – and the only body that awards Chartered Manager. Commenting on his appointment, Philip Bain said: “I am delighted to be chosen to Chair the Chartered Management Institute in Northern Ireland. We have an excellent board that are truly committed to raising management standards across the province. I’m really looking forward to working with the board in promoting CMI membership and particularly Chartered Manager, which is the hallmark of any professional manager.”

In a highly competitive labour market, Bain says that Chartered Manager’s “practical MBA” approach gives managers a significant advantage by demonstrating their ability to use their managerial skills to achieve organisational results. Research by CMI shows that Chartered Managers deliver an average of £362,176 in added value to their organisations. Philip’s business ShredBank, which he runs with his business partner James Carson, has grown throughout the recession to become a multi award winning business that is now the leader in its industry and Philip believes that this success is because of the quality of their people. “We have an exceptional team at ShredBank and we are a business that has always been very focused on continuous professional development for all our people,” he said. “Given that the development of our staff has been a major factor in ShredBank’s growth, it is a real privilege to lead CMI during this period in its growth as it is an organisation that has always been totally focused on the development of better managers and leaders across all sectors of the economy.” Bain is keen to see more employers draw on the wealth of resources and training offered by CMI to help get the best out of their managers and develop leaders for the future. For individuals, joining CMI is a statement of the standards that they have achieved as professional managers and their commitment to continue to develop those skills. Ann Francke, CMI’s Chief Executive said: “The appointment of Philip and his Board colleagues marks the start of an exciting new phase for CMI in Northern Ireland. Their local knowledge will help us understand how we can best help employers raise their game. Management and leadership development can improve performance by as much as 23%, which is a real prize for businesses still facing tough times.” Philip is working with CMI’s new Northern Ireland Board to develop a programme of work that will include events for current CMI members and non-members alike. “We’ve got an exciting time ahead of us and I’m looking forward to working with managers across Northern Ireland to show them how CMI can help them tackle the real practical challenges they face.”

Philip can be contacted at cminichair@managers.org.uk

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A standard bearer of Northern Ireland excellence in design, innovation and technology, Ballymena’s Wrightbus is a leading British bus manufacturer best known as the company behind the New Bus for London. It has a contract to supply 600 new London buses over the next three years, one of a series of recent multimillion pound orders. The Wright Group’s growing international presence means that Wrightbus vehicles are in daily operation in locations such as Hong Kong, Singapore and Las Vegas. To compete in the lucrative Indian market the company will open a production centre in Madras later this year, although main production for Europe and south-east Asia will remain in Ballymena. The company is a mainstay of the North Antrim economy, employing 1,400 people. Its most recent results showed turnover rising to £156m, up from £133m in 2011, while pre-tax profits trebled to almost £4m.

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Top deck left to right: Martin Graham, Logistics Director, Wrightbus; Mark Mitchell, Product Director, Wrightbus; Brian Maybin, Engineering Director, Wrightbus; Steve Harper, Business Development Director, Wrightbus International; Geoff Potter, Product Director. Bottom deck left to right: John McLaughlin, Managing Director, Wrightbus; Louise Macdonald, Company Secretary, Wrights Group; David Barnett, Product Director, Wrightbus; Dr Paul Dykes, Quality and Business Improvement Director, Wrightbus; Simon Robson, Operations Director, EN-Drive; Dr Lorraine Rock, Global Supply Chain Director, Wrights Group; Mark Nodder, Managing Director, Wrights Group; Dr William Wright, chairman, Wrights Group; Mandy Knowles, HR & Welfare Director, Wrights Group; Sam McLaren, Commercial Director, Wrightbus; Robert Drewery, Business Development Director, Wrightbus; Damian McGarry, Managing Director, Wrightbus International; Mark Johnston, Finance Director, Wrights Group.

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Have you optimised your potential?

o matter what reason you have for leaving the company you have spent years building up, it is never going to be easy. Alan Branagh found this out the hard way when he went to sell his own company. He admits with a rueful smile, “I was far too emotionally attached, the business was my ‘baby’ and it was hard letting go, even though I knew it was the right thing to do.” Now Alan, in his role as business partner for BCMS Corporate, with offices worldwide including Belfast and Dublin, advises businesses on growth and exit strategies. He has more than 30 years’ international business experience in sales, consultancy, customer relationship management, eCommence and IT particularly in the high tech, CRM and internet start-up arenas. “One of the first things I always say when someone tells me they are thinking of setting up in business, is to begin with the end in mind. I get a lot of funny looks when I say this, but once I explain why having an exit strategy is important and the positive impact it can have on the future of the business, suddenly it all begins to make much more sense. “There is never a perfect time to leave a company when you have invested years

of ‘blood, sweat and tears’ but there are a number of reasons why owners choose to move on. Our research shows that many people think about selling their business when they are planning to retire or move overseas. In relation to entrepreneurs, they maybe feel they have taken their business as far as they can and want to move on to their next innovative idea. “The issue is that if you have not planned for what happens next, you may not receive the maximum value for your business when you go to market,” he reveals. Alan readily admits that deciding whether to expand your business or to sell the company which you have personally spent many years developing is a difficult proposition and the fact that it may or may not include you can be an uncomfortable thought, so needs to be an early part of the planning process. “We specialise in helping company owners develop exit strategies which can result in the ultimate growth of a business. This can be through investment or acquisition, with many owners choosing to remain to drive the business forward as they, after all, are the expert in their own marketplace. “The fact is that the best buyers are rarely considering making an acquisition and the only way to find such buyers is to be proactive and introduce bidder competition as early as possible. “We don’t provide any auditing or accountancy services and so are able to focus solely on adding value to the business in terms of an investment or purchase and

treat this strategic move as a sales and marketing issue rather than adopting a traditional accountancy-based approach. “This requires a change in mindset and culture to move away from the value of the business being a multiple of your turnover based on your net assets. We believe it should be valued according to what someone will pay for it and have consistently noticed that the best offer tends to be two and a half times higher than the lowest offer. “Once a company approaches us, our dedicated research team identifies hundreds of potential buyers from our extensive database. With 23 offices worldwide, we ensure our search isn’t just limited to competitors or the ‘usual suspects’. We then vet and qualify all the interested parties and usually end up with multiple serious competitive bids. “There are many companies seeking to buy or invest in businesses in Northern Ireland and it is only a matter of finding them. Usually it is not a direct competitor that is the eventual purchaser or investor but a complementary business keen for immediate market share. “Having a business development and exit strategy in place makes good business sense. It shows you have a future vision for your business and that you have thought about whether this is with or without you. Early planning is key to this process as an investor will want to see the potential for growth supported by dependable revenues, a strong customer base and few serious vulnerabilities,” he concluded.

To find out more visit www.bcmscorporate.com for a full list of free, confidential seminars or contact Alan at Midtown Centre, 25 Talbot Street, Belfast BT1 2LD Tel: 028 9082 3656

TOP 100 COMPANIES

Banks under the spotlight The Northern Ireland Affairs Committee has announced an inquiry into the structure of the banking industry in Northern Ireland. Here we summarise the key questions it will ask in an investigation which is widely expected to confirm a highly dysfunctional sector that is currently doing more to hinder business than help. The structure and governance of banks in Northern Ireland • Is there a difference in the structure of banks in Northern Ireland, compared to their structure in Great Britain? Is there any disadvantage for customers, both private and business, in NI as a result? • Do banks that operate in both GB and NI, eg, Barclays and Santander, operate differently in NI than in the rest of the UK? Does this result in customers in NI being at a disadvantage? • What are the consequences for customers in NI of banks and bank debts being owned by non-UK banks; what role does the Republic of Ireland play in NI banking; what effect does the sale of bank assets by the National Asset Management Agency (NAMA) have on NI property values? The possible breakup of RBS/Ulster Bank • It has been reported that HM Treasury are considering trying to persuade the Irish Government to take control of Ulster Bank. This would involve removing Ulster Bank from RBS Group and swapping all, or part, of the bank for the British loans and investments currently owned by NAMA. What would be the implications for NI of such a move? Access to finance, particularly for Small and Medium Enterprises • Historically, finance for start-ups and expansions had been largely provided through Government agencies – ie Invest NI and its predecessors - with the result that bank finance traditionally played a lesser role in NI than in GB. Have NI banks continued to play a lesser role in commercial finance than elsewhere – in particular, have economic and financial conditions since 2008 exacerbated that position? • If so, what impact does the problem have on (a) business, (b) Government and (c) economic growth/rebalancing the economy, and what measures might be taken to tackle it? Lack of effectiveness of national initiatives to help aid economic recovery • Is the population of NI at a disadvantage to the rest of the UK as a result of the lack of uptake of national economic recovery initiatives by banks in NI? If so, is a more tailored approach from HM Treasury required for Northern Ireland? Lack of availability of detailed regional lending data • The lack of available data means that it is difficult to properly assess the impact of the reduced availability of credit in NI, and also means that there is not sufficient visibility about whether banks are reaching their agreed lending targets. How is new lending recorded; how much ‘new’ lending recorded is actually made up of extensions or additions to existing loans; and what are banks actually doing compared to what they are advertising? Access to banking in rural communities • Following the closure by Danske Bank of some branches in rural areas, are the interests of those living in more rural areas, particularly the elderly, sufficiently fulfilled by the banking structure as it currently stands? How significantly will the situation be exacerbated if Ulster Bank also closes some of its rural branches? The Committee is asking for written submissions by September 2 and intends to hold public evidence sessions in the Autumn.

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Chain Reaction Cycles has grown from a small retail shop first opened in Doagh in 1984 into a leading e-commerce business which can rightfully bill itself as the world’s largest online bike store. For the year ended December 31, 2011 the company posted turnover of £136m and its significance to the local area can be measured by the fact that it now employs over 600 staff. The retailer stocks a massive 90,000 products – from complete bikes to specialist parts and accessories – and ships on average 60,000 orders a week to around 125 countries. In 2011 the company went back to its roots, opening a 10,000 sq ft store on Belfast’s Boucher Road, giving its online expertise a physical presence. Founders George and Janice Watson remain active in the company, which is now led by their son Chris as Managing Director. Many of the company’s senior team are themselves cycling enthusiasts.

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Pictured left to right at the Chain Reaction Cycles warehouse at Whitepark near Ballyclare are: Frank Warwick, Director of Trading; Nick Redmond, Director of Operations; Maurice Donaldson, Head of Strategic Management; Chris Watson, Managing Director; Lola Oâ&#x20AC;&#x2122;Hare, Creative Director; Jarlath Quinn, Finance Director; and Michael Cowan, Director of E-Commerce. Board members absent from the photo are Michael Murdock, IT Director and the companyâ&#x20AC;&#x2122;s founders George and Janice Watson. PHOTO BY Richard TRAINOR

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COMMUNICATIONS

Northern Ireland leads the way in tablet computer revolution

obody could have known what a success tablet computers would become when they were launched in

2010. Latest figures from the communications regulator Ofcom show the number of people in Northern Ireland who own a tablet computer has trebled in the past year, with nearly one in three homes (29%) having one. Take-up was particularly high in urban areas and homes with children. Moreover, Northern Ireland leads the UK in tablet take-up, according to Ofcom’s latest Communications Market Report for Northern Ireland.

The surge in tablet ownership reflects the continuing rise in take-up and use of the internet in Northern Ireland. The report reveals that eight in ten households (80%) now have access to the internet, up from 73% the previous year while people in Northern Ireland are increasingly accessing the internet on their mobile phones smartphone ownership is up by a third, to 45%, in the past year. “The rise of the tablet computer is the big story from this year’s report,” said Jonathan Rose, Ofcom’s Northern Ireland Director. “Since they were launched just a few years

“Since they were launched just a few years ago, take-up of tablets has reached nearly a third of homes in Northern Ireland.” 104 AUGUST 2013

ago, take-up of tablets has reached nearly a third of homes in Northern Ireland. Consumers value the portability and quick access to the internet at home and on the move that these devices provide. “This is also reflected in another sharp rise in smartphone ownership with nearly half of us owning one. “It is encouraging to see that the availability, take-up and use of most communications services in Northern Ireland are now on a par with and, in some cases, ahead of the rest of the United Kingdom. “Where we are doing less well is mobile coverage with consumers in Northern Ireland less satisfied with the service they are receiving than those in other parts of the UK.” The report gives an insight into the communications devices people in Northern Ireland have and how they use them. Social media continues to be popular among people in Northern Ireland, with more than half (53%) accessing Facebook, Twitter and similar services online, either at home or on the move. A similar proportion (51%) say they bank online, while three in five (60%) purchase goods and services on the internet. Northern Ireland leads the way in take-up of pay TV, with two-thirds (66%) of homes having Sky, Virgin Media, BT Vision or paid-for top-up services (e.g. Top-Up TV), compared with 59% for the UK as a whole. New research, carried out for this year’s report, also highlights the popularity of Republic of Ireland (RoI) TV channels in Northern Ireland. One in four people watch RTE channels (One and Two) every week, with smaller but still significant numbers watching TG4 and TV3. Ofcom’s says the huge take-up of smartphones and tablets is creating a nation of media multi taskers. It says families are still coming together to watch TV in the living room – 91% of all viewing is on the main TV set, up from 88% in 2002; however an increasing array of digital media are now also vying for their attention. People are streaming videos, firing off instant messages and updating their social media status – all while watching more TV than before. The report is available to view on the Ofcom website: www.ofcom.org.uk

TOP 100 COMPANIES

Randox lays down a marker Randox Laboratories Managing Director Dr Peter Fitzgerald tells Ulster Business about the company’s plans to roll out more health clinics and the imminent launch of a new product division. Peter Fitzgerald looks at me rather quizzically when I ask how important it is to him to know that his company is helping people. “It is our raison d’etre,” says the Managing Director of Randox Laboratories. “You have to make money to be able to do it. But we are medical research scientists so everything we do is about improving people’s lives. It is an endless journey because so little is known about the human body and diseases.” It is an interesting snapshot into the ethos behind one of Northern Ireland’s most celebrated companies in the pharmaceuticals and life sciences sector. Randox is a global market leader in what’s known as the in vitro diagnostics industry, developing innovative diagnostic solutions for hospitals, clinical, research and molecular labs, food testing, forensic toxicology, veterinary labs and life sciences. Its biochip tests – whether for food contamination, narcotics or STIs – typically test for a far wider range of outcomes than standard tests. Founded in 1982, the Crumlin based company continues to go from strength to strength, with offices and distribution in over 140 countries and more than 1,000 employees globally. The accounts used in the Top 100 show turnover of £68.6m, up from £57.7m a year earlier, and while its full accounts have not been filed for 2012, the company saw turnover rise again last year to £74m. Building on its reputation as a leader in the medical diagnostics industry Randox recently announced a multi-million pound deal with the Saudi Arabian government to supply cutting edge laboratory equipment to the Gulf state’s

Ministry of Health. The deal, worth at least £6m over the next five years, will include delivery of fifty of Randox’s pioneering RX Daytona Plus analysers to hospitals across Saudi Arabia in 2013, with the potential for further orders next year. It would be easy to let such success go to your head, but Peter Fitzgerald remains focused on the same goal he had when he set the company up over 30 years ago – to change lives for the better. He refers to Randox as a medium sized company, which may be strange in the Northern Ireland context, but not, he says, when you consider its competitors are global giants like Roche and Siemens who are up to 20 times bigger. “I believe we’re nothing compared to what we could be. We could be significantly better. Bigger doesn’t necessarily mean better but we plan to be bigger in terms of our output

“we started Randox Health clinics to offer tests to the public because we felt we weren’t getting new tests quickly enough into our NHS.” 106 AUGUST 2013

of products and working out ways to get them more widely available. There’s no point inventing things unless you can get it to where it should be,” says Fitzgerald. “We invest very heavily in R&D. We pretty much put all of our earnings back into the company and don’t take dividends out, so we have already developed some very good technology. We’re probably coming up to the stage whereby we will have quite an explosion of new products coming on the market, both in what we would call classical tests and biochip tests.” Dr Fitzgerald explains that as Randox develops new products – in many cases actually creating new markets for diagnostics - it has to form new business units around those products. Currently there are 13 divisions and a new one will be set up in 2013. “We do have a new division that hasn’t actually been formed yet around a product which is coming out at the end of the year. It is a new clinical analyser called the Evolution. We will need to form a new group around that because all our staff are taken up in various specialisms. It is a question of getting the R&D right on a product and then building a team around that,” says the MD. Over 300 people joined Randox during an extensive expansion phase last year and the company’s founder estimates it has recruited

TOP 100 COMPANIES Peter Fitzgerald with Enterprise Minister Arlene Foster

between 50 and 70 additional staff so far this year. Around 80 per cent of the new employees are based in Northern Ireland and it continues to hire across all areas - R&D, sales and marketing, finance, administration, and PR. “We have to be international and we have to be internationally competitive - to think beyond Northern Ireland. But we are a Co Antrim company. We’re always expanding in Co Antrim and we’ll be expanding more here,” says Fitzgerald. “If we stay competitive we can create more jobs. We feel we’re a medium sized company but we could be a large company. We think of ourselves in a global environment.” OUTLOOK Other than the crisis economies of Southern Europe, the Randox boss is “fairly bullish” on most of the company’s key international markets. As demonstrated by the recent Saudi deal, it is working hard to put in place long term relationships with customers and to make sure they know about its products. “We have always been strong in what’s been known as emerging markets. We’re strong in the US. But after that we’re strong in the BRIC companies, we do work in

Brazil, China, India, Russia. Also Vietnam and Thailand – countries that are quite open,” explains Fitzgerald. “We do find new products are accepted faster in the so-called emerging markets. They latch on to new products far faster than anyone else, with the exception of the US.” One market that remains a tough nut to crack is our own NHS. Fitzgerald has previously voiced his disapproval of the procurement system in the NHS and still believes it needs to be more open. He adds that while Randox gets good support from other aspects of Government – for example it sells to the social services – it finds the NHS “ponderous and slow to take up anything new.” “It’s very hard to know where the decision makers are sometimes, especially on new products, when clinicians feel it is very worthwhile but it just doesn’t seem to happen. The chance of getting access to a totally new product in Northern Ireland are not very high,” he elaborates. “That’s why we started Randox Health clinics, to offer tests to the public, because we felt we weren’t getting new tests quickly enough into our NHS.” Randox Health is a business that offers

preventative health profiling, empowering people to make their own decisions on tests of their own health. Far from trying to replace the traditional GP, the service allows people to pay for tests that can give early indicators of symptoms of diseases that might not otherwise be picked up until it is too late. The company opened a clinic in Crumlin to be sure that it offered value and people were willing to pay. It has since opened one in the Culloden Hotel, one in London and is soon to go international by opening a clinic in Dubai. “We reckon we save a life every week or at least dramatically improve one. So it’s a positive thing. Either there’s nothing to find or you are finding it earlier,” says Fitzgerald. “We intend to roll out many more. We had to prove to ourselves, are we helping people and will people pay. We have been happy on both counts the answer is yes. We have to work out how we roll it out throughout the world, but we’re in the process of doing that,” he adds. “We’re in a period where there are so many new tests and so many new biomarkers being discovered it is probably unrealistic to expect the NHS to keep pace. But the more tests people buy the more this will force new tests into the NHS.”

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THE NEXT

25 YEARS AS THE NORTHERN IRELAND ECONOMY ATTEMPTS TO REBALANCE TOWARDS THE PRIVATE SECTOR AND ADAPT TO GLOBAL TRENDS, WHAT INDUSTRIES PROVIDE THE GREATEST POTENTIAL FOR GROWTH? ULSTER BUSINESS ASKS LOCAL EXPERTS TO GIVE THEIR VERDICT.

was struck looking back at the 1988 editions of Ulster Business by the number of business people pictured sitting proudly next to massive desktop computers. Most likely state-of-the-art in their day, the large white PCs with their black and white or four colour screens immediately place the photo in the late 1980s. I wonder if, when we look back at 2013, whether those pictured holding laptops, tablets and iPhones in the images that accompany the press releases I receive each day will feel similarly dated? Looking into the future is always something of a crystal ball exercise and when it comes to business and the economy, specialist companies like Gartner can charge a pretty penny for the considered predictions of their futurist analysts. But over the next 30 pages or so, we have taken a stab at highlighting some of the industries and sectors of the economy that offer the greatest chance to propel Northern Ireland out of the doldrums and towards prosperity over the next quarter century. Within the feature we look at everything from the agri-food, digital and aerospace sectors to construction, exports, renewables, tourism, niche manufacturing, retail and the creative industries, as well as examining the need for greater provision of start-up support and STEM education. Of course there are clear challenges ahead. Economist Alan Bridle outlines how some global issues could play out, and their impact here; our columnist John Simpson tackles the more immediate need to sort out the local planning system; and NICVAâ&#x20AC;&#x2122;s Seamus McAleavey asks what impact greater devolution might have on our fortunes. Whether any of our chosen sectors will still be thriving in 25 years time remains to be seen. Iâ&#x20AC;&#x2122;ll leave the job of checking that out to whoever is the editor of Ulster Business in 2038!

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A long slog back to prosperity Alan Bridle, UK Economist at Bank of Ireland, gives his perspective on how the Northern Ireland economy could develop in the medium term amid a rapidly changing global landscape.

n trying to sketch out how the Northern Ireland economy might perform over the next decade or two we are confronted with two fairly obvious challenges. Any long-term prognosis comes with the usual health warning given the capacity for “economic shocks” and the reality that this region is still dealing with its economic past and a legacy of high debt, the adjustment from which is incomplete. In a sense, the repair of balance sheets may be seen as the solution rather than the problem, but the work-out period will likely extend for a number of years yet, impacting on the level of aggregate demand in the economy and ensuring the our GVA growth rate stays on a lower trajectory relative to pre-crisis. The centre of the world’s economic gravity continues to move east and, despite the so far patchy recovery in emerging markets, the longterm outlook remains broadly favourable. There are huge pools of educated and skilled labour (though more expensive than before) combined with scope to boost productivity through new technologies and increasing urbanisation. The growth path in these economies will not be in a straight line and there may be a financial crisis or two along the way. Against such a backdrop, the local economy must continue to “internationalise” and look outwards. Interestingly, while we are trying to rebalance towards exports (and away from

domestic consumption), China faces the opposite challenge. The outlook for the US appears more mixed – the Federal debt and ageing demographic should inevitably act as a drag on long-term growth rates. At some point Washington will have to “suck” demand from the economy to a much greater extent. More positively, advances in shale gas technology should ensure an abundant supply of cheaper fuel, at least in the short-term. The outlook for Europe seems less encouraging – has the crisis subsided or merely moved into another phase? The ECB’s actions have bought time but can weaker states restore competitiveness versus Germany within the monetary union by a de facto internal devaluation? Over the next decade the euroarea will either come closer together in deeper political and fiscal integration or fragment – but the risks of a long period of economic stasis are high. UK DEVELOPMENTS The vote on Scottish independence, a general election and possibly a referendum on EU membership must be considered. Whatever the outcomes, there is a risk of a change to the financial arrangements in the UK to the detriment of this region. On monetary matters, at some point the BoE will have to manage the formidable challenge

“We should attach some probability to the risks of another financial crisis in the UK over the next 5-10 years.” 110 AUGUST 2013

of unwinding Quantitative Easing (QE) – the volatile response recently to the hint of a withdrawal in the US may indicate how dangerously dependent the financial markets have become on a flow of very cheap liquidity. In scenario planning, we should attach some probability to the risks of another financial crisis in the UK over the next 5-10 years – a national debt rising towards 85-90% of GDP and the unwinding of QE are potential triggers for disorder in the gilt and currency markets. While “policy” interest rates are almost certain to remain unchanged until 2015-16, market rates may begin to normalise sooner. REGIONAL OPPORTUNITIES The critical conditions for restoring buoyancy to the regional economy have been well rehearsed, notably: • a widening and diversified export base a revival in private investment and public infrastructure • stabilising the banking system, housing and property markets • structural reform of public services and reducing the cost of government • recovery in our neighbouring markets in GB and ROI. The near-term challenge is to move from stabilisation to recovery. The immediate outlook seems a little brighter for 2013 and 2014 with a modest acceleration in UK GDP. The overarching goal is sustainable and balanced growth, a task made more difficult by the recession and policy responses which have, in effect, helped widen the imbalances. Despite numerous strategies, the reality is that Northern Ireland is as dependent on government and public spending as ever – the Economic Pact and report by the Food Strategy Board are recent examples. The “growth drivers” in the pre-crisis decade – rapid expansion in both government expenditure and private credit – will carry much less weight, while domestic demand will remain constrained. Potential growth areas are a mixture of the traditional and the new – agri-food, niche, high value manufacturing, technology, pharma & health sciences, renewables, tourism, creative industries, regulatory & compliance services etc. Furthermore, the rate of house building is likely to accelerate again A JOBLESS RECOVERY? Lower growth rates will pose a formidable labour market challenge. In the decade to 2008 the regional economy created c12,000 jobs per

First Ministers Peter Robinson and Martin McGuinness have visited China twice in the last year. The centre of the world’s economic gravity continues to move east.

David Cameron chats to US President Barack Obama at the G8 in Lough Erne. The outlook for both the UK and US is mixed.

annum, largely driven by the retail, construction and public sectors. Post-2008, around 40,000 of these jobs have gone, with the same sectors going into reverse. Despite welcome job announcements, our labour market has little prospect of returning to the pre-2008 peaks over the next decade. Net job creation is unlikely to absorb the volume of new entrants as the historic labour-intensive sectors remain challenged and others re-size operations in the face of market changes. In the foreseeable future we will be running hard to stand still. For young people there will be fewer local opportunities compared to the previous generation, a situation that should trigger a re-think of all current policies aimed at the 16-24 year olds. Unemployment and underemployment will remain key issues. Businesses will continue to face the challenge of adjusting to the “new” financial order and the rapid pace of technological change. Those with strong balance sheets, competitive labour costs and diversified markets will have better prospects. Businesses no longer relevant or able to deliver for tomorrow’s consumer will likely

disappear. Others face the threat of increased commoditising of their services. For Stormont and local government, the task should be to create the most businessfriendly environment through affordable energy, planning, regulation, employment law, business rates etc. The opportunity to fundamentally re-shape the public sector through greater participation of the private sector in service

provision was not taken during better economic times. And if the ring-fence on health and education is lifted in the next UK spending round, we may not have a choice. Critical decisions on the long-term funding of water, health, social care and infrastructure lie ahead. The long-term outlook for all stakeholders in the economy remains challenging but we get richer by getting better, not by getting older.

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Any vehicle, any manufacturer T hat’s the deal at Donnelly Finance and Leasing (DFL), Northern Ireland’s largest locally owned vehicle leasing company! The company, which is part of the Donnelly Motor Group, provides business customers in Northern Ireland with cost effective transport solutions tailored to suit the individual needs of the business. Whether it is one vehicle or a fleet of 100, DFL customers have the choice of any vehicle from any manufacturer. Debbie Irwin, Sales Manager of DFL, which offers customers a full fleet solution under the one roof, said: “As part of the Donnelly Motor Group, we can now bring the trust, experience and incredible value that has been associated with the Group throughout its 65 year history, to business customers in Northern Ireland. “The Group’s overall ethos is ‘keeping the customer central to everything we do’ and that is no exception at DFL. “We recognise that the needs of every customer, particularly from businesses across a range of industries, are different, and our finance and leasing professionals work closely with each customer to create a tailored solution which best suits the requirements and budget of your business. “This can range from vehicle supply, conversion, fitting out, service, maintenance and vehicle disposal. No matter the manufacturer or size of the fleet, we deliver a solution for every customer.” “Earlier this year major expansion plans were announced which will not only double our current workforce but also see DFL, which is currently based in Mallusk, open offices at all seven Donnelly Group sites across Northern Ireland, meaning wherever you are, we are never far away! Debbie continued: “Our research highlighted that business

Debbie Irwin

people want to support local companies and local jobs. They want a finance and leasing company that is close to their own business and offers the widest possible range, excellence in service and keenest value. “These are exciting times for Donnelly Finance and Leasing and I look forward to the Group’s expansion over the coming years.” For more information, please visit www.DFLNI.co.uk.

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There are no silver bullets – just complex choices and hard work The time is right to at least debate the devolution of additional tax, spending and borrowing powers to Northern Ireland, writes Northern Ireland Council for Voluntary Action (NICVA) chief executive Seamus McAleavey.

iven the prominence of the call to devolve corporation tax to the Northern Ireland Assembly it would be easy to think that our economic woes would be solved by a positive decision from Downing Street. However, while the Executive remain committed to pressing the Prime Minister on this issue, we also need to look at other options. Northern Ireland’s current economic strategy is focused on growth; narrowing the productivity gap with the UK average, boosting exports and attracting foreign direct investment. But we have a very obvious problem – we have been saying similar things in a range of strategies for over 50 years and have not succeeded in changing the economic outcome. Northern Ireland has been unable to find and execute a strategy based on four or five key policy changes that would actually produce a positive result in improving our overall economic performance. NICVA wants better economic prospects for

people, particularly those on low incomes. We want to close the inequality gap characteristic of underdeveloped economies. As part of our research programme we commissioned an independent review of the scope for devolving wider tax, spending and borrowing powers to the Northern Ireland Assembly. The report, A review of the fiscal powers of the Northern Ireland Assembly, concludes that Income Tax, Stamp Duty, Air Passenger Duty and Landfill Tax, could be potential candidates for devolution. These taxes collectively contribute an estimated 22.3% of Northern Ireland’s tax revenues and the report also suggests that other ‘minor’ taxes and some excise duties may be suitable for devolution. However, the report warns that enhancing Northern Ireland’s control of taxation poses practical challenges, as any increase in revenues from devolved taxation would be offset by an equivalent cut in Northern Ireland’s block grant. The challenge to the Northern Ireland

“We need economic game changers but we won’t find them looking in the same old places.” 114 AUGUST 2013

Executive is, if given the powers, could they do better for the economy? Would more economic responsibility enhance governance arrangements here? Would the discipline of being responsible for raising, as well as spending, resources sharpen our social and economic policy development? The report also highlights that accurately calculating how much tax is due in Northern Ireland and how much is collected requires a level of precision in revenue assessment not currently available. Further, the cost of administering enhanced tax devolution could be significant and needs more investigation; the experience of Scotland in establishing a separate revenue agency should be carefully considered. So while nothing in the economic sphere is without risk we believe the time is right for debates on these issues. We need economic game changers but we won’t find them looking in the same old places. We will not make change happen by simply aspiring to change. Our past economic strategies failed to produce a real shift in our economic fortunes; it’s now time to find the policy changes that might actually make the shift. But it’s important to remember they will not have a silver bullet effect either. They will require long hard slog and solid implementation before they begin to look like they are doing the trick.

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Making better planning decisions It is agreed that sorting out our planning system will be key to the economy in future. John Simpson asks whether the new Planning Bill is likely to make the difference, or if it throws up more questions than answers. on the social, sustainability and economic outcomes.

hen the Planning Bill becomes law, planning application decisions should be quicker, based on clearer criteria, less likely to be subject to Judicial Review and, for special zones, given extra flexibility to help to rebuild the economy. The Planning Bill, now passing through the approval stages of the Assembly legislative requirements and expected to become law later in 2013, represents a necessary clarification of how applications for planning permission will, in future, be assessed. There is an inheritance of long consideration periods, an apparently increasing tendency for planning approvals to be subject to applications for Judicial review, and a perception (at least) of controversial evaluation of competing criteria in making decisions both within the guidelines of regional or local development plans, or challenging the logic (or ambiguity) of existing development plans. During 2013 the Planning Bill has attracted considerable debate. The merits and tensions of the debate have been controversial in ways that illustrate the differences between the volume of â&#x20AC;&#x2DC;noiseâ&#x20AC;&#x2122; from vocal pressure groups and the wider need to take account of the full range of qualitative and quantitative factors impinging

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PRIORITY SETTING The planning system needs to reflect and evaluate competing priorities. Only very infrequently will one particular planning issue be the only material consideration in decision making. Sometimes there will be a predominant issue but rarely should it be over-riding. Planning practitioners must become competent in multi-disciplinary assessment and evaluation. Planning decisions will usually start with an assessment of the environmental impact including questions of sustainability. Questions of social policy, including for example urban regeneration, and economic policy must then be part of the summation. The proposed Planning Bill procedures will rely on a comprehensive overview. No single issue will predominate and no single issue should be ignored. Admittedly, this combination (not for the first time) means that the senior planning decisionmaker (usually a Minister) must evaluate features where part of the final evaluation is subjective. There is no finely tuned scoring system that can make the process completely measurably objective. Recognition of this tension is not new. The implicit factors are being made explicit. The environmental lobbyists who have argued either that non-environmental factors should be excluded from planning analyses or non-environmental factors should not be assessed along with environmental factors, now face a need to rebuild the platform on which they make these assessments. Economic benefits (or costs) are now an explicit feature, as a material planning consideration. The Chairman of the CBI (NI), Ian Coulter is unhesitatingly supportive of the change to make this ambition explicit. Mr Coulter goes further in support of the new Bill. He welcomes the proposal that economically significant (defined) planning zones should be created where development proposals would have an assurance of enhanced timely consideration. This particular enhanced treatment is, in his

opinion, needed so that Northern Ireland can build a more efficient decision making process in support of a balance in development proposals. The concept of specific areas which qualify for enhanced planning policy application (not necessarily less rigorous policy) must, he argues, be sparingly used as a coherent part of a wider regional policy. The Planning Bill sets out the framework for the establishment and operation of economically significant planning zones. They will be defined areas, based on specific locations and subject to operational regulations to ensure clarity of purpose, consistency in operation, and with detail that will facilitate quicker decision making. That said, many of the features that will be critical to the acceptable operation of these zones will lie in the detail of the operational regulations. Caveats on what will be the acceptable proposals, the unacceptable, and the degree of delegation to the newly formed local authorities may still merit careful scrutiny when they are issued for consultation. The concept of a more flexible planning regime in the special economic development zones will, in principle, receive widely based political endorsement subject to some reassurance on the locational impact in terms of general social, environmental and economic effects. POLITICAL COHERENCE The Assembly has supported an additional feature in the creation of special planning zones: responsibility for these zones will lie with the Office of the First Ministers (OFMDFM), rather than the Minister for the Environment. This decision was not supported by the Minister for the Environment and the operational practicalities have not yet been detailed. Alex Attwood, speaking as Minister for the Environment during the Assembly debate (before he was replaced by Mark H Durkan) disagreed with this organisational decision. In essence, the Minister did not oppose the creation of special zones. He did doubt the wisdom of separating their regulation and administration from the main planning services

THE NEXT 25 YEARS

Maze Long Kesh is one of several high value, but potentially controversial, projects which OFMDFM could take decisions on under the new Act.

in his department. The Bill sets out, in general terms, how the distinctive differences will be handled. The logic is clear enough. To quote the Bill: “38F. The Department (DoE) must provide such administrative and other assistance for OFMDFM as may be necessary to enable OFMDFM to carry out its functions…” However, the operational detail is fuzzy. Will the OFMDFM have their own core professional planning staff at the top of the decision making tree, or will they rely on the professional staff of the DoE? This raises the stark question: why split this critical function between two departments? Does OFMDFM not have enough confidence in sensible collective decision making by the Executive? EFFICIENT DELIVERY The Planning Bill now aims to set up a planning process designed to respond to the needs of the 21st century. A feature of the early years of the 21st century has been the impact on planning processes of the intervention of the legal system through the pursuit of judicial review proceedings. There is good reason to try to ensure that in any judicial review proceedings the focus is on major alleged deficiencies in administration.

The Planning Bill has introduced a provision to constrain the scope for judicial review. Discussing the possible review of planning decisions where an Order made by OFMDFM has been approved, the clause says: “33A (2) Subject to paragraph (3), a decision .. to which this Article applies shall not be subject to appeal or liable to be questioned in any court” “33A (3) A person aggrieved by a decision … to which this Article applies may, within 6 weeks … appeal to the High Court on any question of law material to the decision only where the question of law raises matters of: • The compatibility of the decision … with the [European Convention on Human Rights (1988)] • The compatibility of the decision … with EU law.” This provision has attracted significant

support from the business community. Ian Coulter believes that “there is a need to look at how judicial reviews operate in Northern Ireland as there is a risk that in some cases they are being used as an obstruction”. This is a new approach to determining when legal issues are themselves material to the process. It may set a precedent for an important change in the frequency of resort to legal delays. The legal experts believe that the impact of this provision may effectively constrain the scope for delays caused by (now) unacceptable judicial interventions. Has the balance of judicial intervention alongside efficient administration been improved? Northern Ireland needs to rebuild a reputation for good defensible and timely planning decisions.

“Will OFMDFM have their own core professional planning staff at the top of the decision making tree, or will they rely on the DoE?” AUGUST 2013 117

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EXPORT OR BUST Increasing exports is crucial for our economy. But local companies must be prepared to put in both time and investment if they want to sell overseas, writes Andrew Webb, Consulting Director of OCO.

orthern Ireland’s economic strategies through the ages consistently highlight the key objective of increasing exports. Current objectives aim to deliver an increase of 20% in the value of manufacturing exports by the end of 2014/15 by encouraging first time exporters and helping current exporters to increase the extent of their external sales by selling into new markets. There is no debate to be had as regards the merits of such aims as the benefits of exporting are well documented – increased sales and profits, enhanced domestic competitiveness and selling in multiple markets reduces the risk of a downturn in just one market. While it would be churlish to suggest that there has been no success towards improving exports when we see the likes of Wright Bus and Bombardier starring on the world stage, there is a sense that achieving a step change in Northern Ireland’s export performance is proving a much tougher puzzle to solve than anyone expected. That said, I sense that Northern Ireland’s export performance is significantly better than our statisticians currently measure. Take our own situation in OCO. Less than 5% of our turnover is generated in Northern Ireland, but as a service sector company, our export sales are not well captured, if at all. There must be hundreds, if

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not thousands, more companies just like us. But let us park the measurement issues for now and stay with the theme of how to increase export performance. The opportunities for Northern Ireland exporters are plentiful with established markets continuing to provide significant demand for Northern Ireland goods and services and new emerging markets such as Asia and the Middle East offering strong opportunities. However, even when local companies here have a product that would translate to external markets, there are a range of issues that seem to prevent them from taking that step into new territories. The most common issues seem to be the cost of market entry and a lack of information about the opportunities. While there are many support services available to assist with these two barriers there remains a big issue to address that relates to ‘export readiness’ or indeed appetite. An assessment of export readiness goes beyond assessing the financial capacity and knowledge of the markets and also looks at issues around whether the company has a welldefined international marketing plan and the commitment of management to invest the significant time and effort required to break into new markets. These are areas where our local

companies seem to struggle. It is critical that people who are running our businesses have the mind-set that exporting is the way forward to grow their business. But it is important to realise that even with support it is a substantial investment of time and focus. It isn’t a case of making a few trips for a few days to the chosen market. A concerted effort is required in terms of putting people on the ground for a sustained period of time. Again, when I think of our own situation in OCO, our best external markets are those where we have dedicated people in the market. That is a significant ask for our SME based economy, especially as many of our owner managers are up to their necks delivering on the day to day business. So it seems to me that a significant part of the export conundrum relates not only to practical measures around export finance, trade missions and market information but also to awakening some sense of pioneer spirit in our companies. Can it be achieved? I hope so because its export or bust as far as our economic fortune is concerned.

Andrew Webb is the Consulting Director in OCO, a Belfast headquartered FDI & Economic Consultancy with offices in Europe, the Americas and Asia.

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Rise of the machines While some sectors of Northern Ireland’s manufacturing industry are in the doldrums, those involved in the production of materials handling, screening and crushing machinery are still buoyant.

t is clear that manufacturing is no longer the powerhouse of the Northern Ireland economy that it used to be. But in some niche areas, companies from the region are actually leading the way on a global basis. This is particularly true in the materials handling sector and the companies based predominantly around Co. Tyrone who produce machines for crushing, screening and sorting to the mining and construction industries. The Co. Tyrone cluster can be traced back to two companies – Finlay and Powerscreen – who in the 1960s developed mobile screening solutions for quarries to supplement their large static equipment. In the intervening years there were several spinouts from those entities and changes of ownership (both still exist as brands owned by Terex Corporation), with companies diversifying from mobile screening and crushing into sorting, waste recycling and a whole range of technologies around that activity. International names in the sector who have a manufacturing presence in Northern Ireland include the

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aforementioned Terex, Caterpillar and NACCO (all from the US), Sandvik and TESAB (from Sweden) and McCloskey (from Canada). Locally owned companies also succeeding in the business include Blackrock Manufacturing, Hill Engineering, Smiley Monroe, JMG Systems and the RP Group. It is estimated the industry accounts for some 4,500 jobs in total and last year the companies combined had turnover worth almost £1bn. Kevin McCann, Invest NI’s Director of Advanced Engineering and Construction, says the boom in the global mining industry has significantly benefited local players in the past few years. “The materials handling sector is a very buoyant sector at present. The sector suffered from a significant downturn in 2009 but is now seeing significant growth,” he said. “That’s because their market really is international – they are selling in South Africa, South America, Australia, Saudi Arabia, mainland Europe, you name it. Wherever there is a market opportunity you will find those mid-Ulster companies there, and in many cases they will be the dominant player in the market.” McCann notes that many of the companies

here have invested heavily in R&D to keep their machinery at the cutting edge, which, allied to their already strong focus on exports, makes the sector a good bet for future growth. “The companies all have an international focus. In fact more than 40% of mobile screening equipment in the world comes out of mid-Ulster,” he notes. “It is second nature for those firms to operate in the international marketplace – they have always had to do it to succeed and they will continue to do that, especially where they see growth markets, for example Russia, Brazil, South Africa and India. The challenge for all manufacturing, not just in this sector, is to maintain the high value added here, even if they outsource the lower value stuff elsewhere.” Commentators often lament the passing of the days when Northern Ireland’s economy was based around manufacturing. But, sad as it undoubtedly was to see the demise of the textiles and ship building industries, it seems clear that the manufacturing industries that remain here are still making a significant impact on our economy.

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Can Tourism move into top gear?

illed as a tipping point for the Northern Ireland tourism industry, 2012 either exceeded expectations or proved underwhelming, depending on your reading of the statistics. Offical figures showed that 1.98 million tourists from external markets visited Northern Ireland in 2012 – an increase of 3 per cent on the 2011 figure. Many commentators suggested this wasn’t the outcome the Northern Ireland Tourist Board and Stormont Executive were looking for when they pumped millions of pounds into flagship projects such as Titanic Belfast and the new Giant’s Causeway Visitor Centre. But tourism chiefs were more positive in their outlook, pointing out that tourist expenditure grew by 7 per cent – or £42m – to directly contribute £683m to the economy. While NITB has no control over business travel, it said more people came for holidays, rather than just to visit friends and relatives, and the number of visitors from the Republic increased by 16 per cent to 60,000. While the overall number of overnight visitors was virtually unchanged at 3.9 million, the NITB also highlighted the fact that this was achieved in a subdued market where Britain only saw a 1% uplift despite the London Olympics. NITB CEO Alan Clarke said that behind the top-line figures, the numbers show a “pretty good” performance by a growing tourism sector that has potential to make a much bigger contribution to the economy. “It’s not just about numbers, it is about spend. Three years ago our average spend per day per visitor was about £37. We were lagging behind England, Scotland and the Republic, which were at £60-£70,” he said. “But we’re getting nearer our competitors. That £683m figure puts us 14 per cent ahead of the Programme for Government targets. The aspiration is to double spend to £1bn by 2020, so we are on target to achieve that. We now need to continue the momentum,” he said. Clarke is expecting another rise in visitors this year, boosted by the positive coverage of the G8 meeting in Fermanagh and events such as the World Police and Fire Games. But he warns that the same old problems remain one of the biggest hindrances to making the region a destination of choice. “The ni2012 campaign was about creating a positive image of Northern Ireland. It is crucially important that we build on that perception in key markets. The G8 was tremendous for international coverage but that can be undone by a bad marching season – it is really important for tourism that Northern Ireland is portrayed as a safe place,” he said. And with another British Tour de France victory fresh in the memory, Clarke is hopeful that the hosting a stage of the next most famous cycle race in the world – the Giro d’Italia – will prove a big draw for visitors from GB and overseas. “In 2014 the big event we have coming here is the Giro d’Italia. I don’t think people realise how big it will be. It is not just a cycling event, there is massive television coverage that will allow us to show off our signature projects to an international audience.” The NITB CEO says that with tourism recognised in the Programme for Government and Economic Strategy, the sector should be able to compete with other destinations to attract visitors for years to come. “Tourism is seen now as part of the Northern Ireland economy when it wasn’t before. 2012 has perhaps repositioned tourism’s role in the wider economy, with Ministers and businesses now seeing it as the shop window for Northern Ireland as a place to invest and study,” he said. “The success of the Irish Open wasn’t just about visitor numbers it was about image and we see further opportunity to improve that image by linking tourism to arts, culture and heritage. There is definitely still a lot more to come.”

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Helping Northern Ireland’s aerospace industry to soar The local prospects for the aerospace sector are good, writes Dr Leslie Orr, Northern Ireland manager for ADS, the national trade organisation for advancing the UK Aerospace, Defence, Security and Space Industries.

he worldwide demand for air travel and for new aircraft continues to grow. The global market outlook for the aerospace industry therefore presents major opportunities for Northern Ireland companies. Currently, UK aerospace has a 17% global market share, making it the number one aerospace industry in Europe and globally second only to the US. The sector generates over £24bn of UK revenues. Northern Ireland contributes nearly £1bn to this total and therefore in scale is one of the top aerospace regions. The sector directly employs over 8,000 people in Northern Ireland and contributes 20% of the province’s annual exports. There is real opportunity for growth; however there is also very strong international competition as the sector is highly prized by governments across the globe, being a high value, high technology industry with the potential to generate jobs, wealth and exports for many years to come. The global growth figures for the industry are staggering. Between now and 2031, there is a global requirement for over 27,000 new passenger aircraft worth approximately $3.7 trillion and an expected demand for in excess of 40,000 commercial helicopters worth approximately $165bn. To capture more of this market and further grow the sector, UK Government

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and industry formed The Aerospace Growth Partnership (AGP). The AGP is a long term strategic plan with commitment to capitalise on the opportunity for growth. As a result of the work of the AGP, in March 2013, Government and industry announced a joint R&D investment of more than £2bn over the next seven years. The AGP is facilitated by ADS, the national trade organisation advancing the UK Aerospace, Defence, Security and Space industries. ADS has 900 Member companies across the UK. ADS Northern Ireland was established three years ago and already has 55 member companies. The goal of ADS Northern Ireland is to further grow the Aerospace, Defence Security and Space industries here. Bombardier, B/E Aerospace, Aero Engine Controls, RLC Group, Magellan Aerospace and Survitec Group all have substantial Aerospace operations in Northern Ireland that supply many leading programmes worldwide. There is also a very strong aerospace supply chain cluster with over 40 companies supplying components to major industry primes like Bombardier, Airbus and Boeing. There are only a few global aerospace primes and Northern Ireland is in a very favoured position to have a major Bombardier hub based in Belfast. The new Bombardier CSeries aircraft, for which Bombardier Belfast is producing the advanced composite wings, and in which the local supply chain are involved, is very exciting for the future of the industry here.

Another great development is the establishment of the Northern Ireland Advanced Composites and Engineering Centre (NIACE). This was opened in January 2012 as a specialist facility where small and large companies will be able to work together with the Universities in NIACE to develop new products and processes keeping us at the forefront of the technology driving the industry. Bringing together many of these strands for growth, ADS NI has formed a very strong Northern Ireland Industry Council. The Council is chaired by David Beatty MD of Thales Belfast and comprises leaders from the companies and the Universities to collectively set the direction for the industry. In tandem with the AGP, the ADS NI Council is working with Invest NI and government departments to develop a strategic plan to accelerate growth in the industry here. This involves many areas from skills provision to business and supply chain excellence and expanding our sales to export markets. This strategic plan, which will include plans for the defence, security and space industry, is due to be released later this year. In Northern Ireland we can look back with pride at over 100 years of aircraft innovation and production, with this rich heritage, knowhow and skills we can also look forward to the next stage of expanding this highly respected and competitive industry sector we have based here.

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Food for thought Tony O’Neill, Chairman of the Agri-Food Strategy Board, outlines the sector’s potential to drive future economic growth and the obstacles in its way.

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eedback on the Going for Growth – Investing in Success action plan has been immensely encouraging from all sectors of the industry since its publication in May. The growth potential of what has become our biggest manufacturing industry is now widely accepted, especially within the Northern Ireland Executive and the Assembly. Equally important is the support from farmers and processors for our primary recommendation that the industry must be seen and treated as a single supply chain. This is seen in our strategic vision of a “sustainable, profitable and integrated Agri-Food supply chain, focused on delivering the needs of the market.” There is recognition that the plan’s projected 60% growth in sales to £7bn, the 75% rise in sales outside Northern Ireland to £4.5bn and the additional 15,000 jobs could have a huge impact on the economy. They would be investing in an industry that is continuing to grow through the current recession. Major investments have already been announced by processing and packaging companies over the past six months and others are in the pipeline. The industry has agreed ambitious targets and is confident that these can be achieved. Underpinning our approach is recognition that both farmers and processors should share the benefits. Of course some commentators have questioned the funding required for several of our 118 recommendations. At the heart of our action plan is a commitment from the industry to invest over £1bn in growth by 2020. We believe that leveraging this investment by the private sector will require upwards of £400m in public funding and other support including from the European Union. Much is likely to come from existing funding streams. What we want to see is a more strategic and coherent approach to the deployment of these funds in key areas such as innovation, new product development and sales outside Northern Ireland. Some public finance for a new Agri Food Fund would help to encourage the banks to back growth-focused companies and progressive farming enterprises to a much greater extent. Our plan is designed to transform the industry into one that is market-led and able to respond faster to the business opportunities that are developing from global population growth in emerging nations – and also from the growing focus on health and food safety among consumers in developed countries. We believe that additional funding can also be drawn down from European sources, especially for innovation and R&D, by a more co-ordinated approach by Executive departments working closely with the industry. Such an approach could also involve greater co-ordination and co-operation with the UK Government and the Republic of Ireland. Investing in the growth of a successful industry, which currently contributes £4.4bn to the local economy and employs around 100,000 people, makes sound business sense for the Executive and the wider community. Food and drink, after all, is probably the only industry with a presence in virtually every part of Northern Ireland. It is an industry which lends itself to our local natural resources and to our people’s talents... an industry ripe for growth and expansion.

THE NEXT 25 YEARS

Renewables: a bright future? As drive towards renewable energy powers ahead certain obstacles that could short-circuit the sector’s potential remain, writes Gary Connolly, Chairman of Northern Ireland Renewables Industry Group.

t’s widely recognised that the renewables sector represents a significant economic opportunity for Northern Ireland and that assertion is based on a solid foundation of investment for more than a decade. Development companies have grown the sector to the point whereby in excess of 12% of local electricity requirements are now supplied from renewables sources, mainly large scale onshore wind, but also small and medium wind turbines, hydro schemes, biomass generation and, increasingly, solar power. The past 12 months have seen huge steps forward in the sector with approximately 130MW of large scale wind generation commissioned. The medium and small wind sectors (sub-250kW turbines) have also had a good year contributing circa 15MW to the overall generation profile. The other big advance has been the awarding of rights by The Crown Estate for the development of offshore wind and tidal generation off the Northern Ireland coastline. This will facilitate the delivery of up to 600MW of offshore wind and 200MW of tidal generation, a crucial step forward for the

marine and offshore industries, and will cement the investment in the supply chain sector in and around Belfast Harbour. While it’s important to celebrate success, we need to focus on the path ahead. From a policy perspective, we are entering a time of great change. Both the London-based Electricity Market Reform process and the reform of European electricity markets as part of the European Target Model means that there will be uncertainty within Northern Ireland up to 2017 at least. In common with our colleagues south of the border and across the Irish Sea, grid infrastructure development remains a challenge. Strong collective efforts will be needed from the industry, the Utility Regulator, NIE and SONI to make sure that infrastructure development keeps pace with projects needing connection. The North South tie line is a particular concern; this project, more than any other, has the potential to stop the delivery of new wind in its tracks should it not proceed soon. Everyone who works in our industry is very aware of the target for 40 per cent of electricity generation to come from renewables by 2020. In that context, it’s useful to reflect on where we have come from and where we need to get to. In

“We will need to connect at least another 800MW in the next seven years to be sure of reaching our 2020 target.” 130 AUGUST 2013

the five years prior to 2013, the Northern Ireland industry delivered approximately 300MW of new wind generation. According to the most recent Generation Capacity Statement published by EirGrid and SONI, we will need to connect at least another 800MW in the next seven years to be sure of reaching our 2020 target. Even allowing for possible advances in turbine technology, this will require a concerted effort by all to make it happen. It goes without saying that the continued success and growth of our industry is visible for all to see and, as more turbines appear on hillsides, community acceptance of our activity becomes increasingly important. While I believe that we are leading the way as an industry when it comes to effective community engagement, we need to continue to work hard in this area. Genuine engagement with communities will help allay their concerns. The economic and other benefits of wind generation are clear to us but they are not always as obvious to local communities and we need to continue to demonstrate both local and national benefits in a meaningful and relevant fashion. Taking a more long term view, I strongly believe that the future for renewable electricity generation in Northern Ireland is bright. Our sector is a lynchpin of our long term energy provision and, notwithstanding the obvious technical challenges, there remain exciting opportunities in the further development of new renewable generation in Northern Ireland.

Pension Auto-Enrolment – no ‘opting out’ for companies With government legislation making it a requirement for businesses to provide an auto-enrolment pension scheme for employees, it is critical that each company starts to take the necessary steps in order to meet its staging deadline, which varies depending on the size of an organisation.

eople are now living longer and the Government estimates that there are 12 million people working in the UK who are not saving enough to fund their retirement. In 1900 there were 10 people of working age for every pensioner and in 2050 it is estimated that there will only be two, putting an unaffordable burden on taxpayers. This government initiative aims to ensure that present employees will enjoy a better lifestyle upon retirement. The largest companies will have ‘autoenrolment’ well underway but as the Northern Ireland marketplace is dominated by SMEs, a significant number of businesses will reach their deadlines from early next year. Iain Ferguson from Belfast-based Workers Pension Trust (WPT), a not-for-profit organisation that provides a local autoenrolment solution, explains why this reform is bringing pensions to people who may never have been able to access them before: “Historically, company pensions have often proved inaccessible for many workers on lower incomes or for those working on flexible contracts or a reduced number of hours. The new pension reform however means that all employees who are over 22 years old and earning more than £9,440, will have to be automatically-enrolled into a pension scheme and it will then be their own responsibility to opt out if they choose. “The administration team at WPT has been operating a multi-employer pension scheme for Northern Ireland businesses since 1982. We were able to draw on that experience to develop a scheme which meets the requirements of auto-enrolment and is particularly suited to the needs of local businesses. Our aim is to

“Our pension expertise, combined with a locallybased service team, means we can provide a support programme specific to each business, with telephone and face to face support.” help companies improve the wellbeing of their employees in retirement as well as helping them to comply with the new legislation in the most straightforward and cost-effective way. “Our pension expertise, combined with a locally-based service team, means we can provide a support programme specific to each business, with telephone and face to face support. WPT also offers many advantages over other competitor schemes, for example, we have no cap on contributions and transfers are permitted both into and out of the scheme. This flexibility together with our simple online

system have been identified as major benefits to local businesses.” Iain Ferguson has a wealth of experience having worked in the employee benefits sector for more than a decade. He believes that there are perceived pitfalls and obstacles for companies introducing the new schemes. Iain comments: “With any new legislation, there will be a degree of culture change required and obligatory auto-enrolment pensions are no different. Preparation ideally needs to start 9-12 months before the staging date. Yes, there will be administration requirements but our online system can help reduce much of this burden and ensure that companies meet their deadlines and comply with their legal obligations. “Employers will continue to have an on-going role in the auto-enrolment pension process. For

example, keeping the eligible employee database up to date but WPT will be on hand during set-up and in the long-term to help and advise on any issues which arise.” Workers Pension Trust is the only Northern Ireland–based full auto-enrolment solution available to all businesses. The pension scheme is open to every employee across all income brackets and is based on more than 30 years’ experience delivering multi-employer pension schemes. For more information on auto-enrolment and your responsibilities as an employer please visit www.workerspensiontrust.co.uk or contact Iain Ferguson on 028 9087 7142 or email iainf@workerspensiontrust.co.uk

Worthingtons Solicitors continue to grow!

aving relocated their Belfast office to modern spacious offices in the Cathedral Quarter, Worthingtons Solicitors have concentrated on expanding the practice and, as part of this strategy, have appointed two new partners. Graham Pierce has joined Worthingtons as a partner in the firm’s commercial property department having trained and become a partner with L’Estrange & Brett and latterly being a partner in the international law firm Pinsents Masons. Graham has been consistently ranked as a leading individual in commercial property in Chambers Guide to the Legal Profession and has been involved in some of Northern Ireland’s most high profile property-related projects, acting for a number of wellknown high street retailers and investment institutions. Louise McAloon has been made a partner in the firm’s expanding employment department. Louise works closely with employers across the public, private and third sectors providing practical advice and assistance in respect of the application of their internal disciplinary, grievance and family friendly policies and procedures to individual employee cases. She also provides advice and representation in respect of the defence of all categories of employment

Huw and Celia Worthington welcome new partner Graham Pierce to the firm.

claims before the Industrial and Fair Employment Tribunals and the civil courts. Within the same department Niall McMullan has been promoted to the role of an Associate Solicitor. Niall, who qualified in 2008, works closely with employers and senior employees, routinely representing clients at tribunal in relation to all forms of workplace disputes. Senior partner, Huw, enthuses: “Worthingtons are delighted with our recent appointment and promotions. Graham is a

highly experienced commercial property lawyer and is well known in property circles in Northern Ireland. All at Worthingtons are thrilled that Graham has joined our practice as he is a fantastic addition to our already strong commercial property team. Louise and Niall have been with the practice for many years. Their promotions are well deserved. Both have demonstrated their total commitment to Worthingtons and to providing high quality advice to our many clients.”

THE NEXT 25 YEARS

INFRASTRUCTURE: THE 2030 CHALLENGE Michael Wightman, CBI Northern Ireland’s Improving Infrastructure Committee Chairman, says an infrastructure investment pipeline is essential for the long-term health of the construction sector.

f all the sectors that have taken a hit since the onset of the financial crisis in 2008, construction has perhaps suffered the most. With upwards of 30,000 job losses and the collapse of many firms – not least Pattons and the significant knock-on effects for its supply base – there has been little to be positive about. Add to this the initial prioritisation of the Coalition Government at Westminster of current over capital expenditure and you have a perfect storm from which many have struggled to recover. However, some of that gloom may now be lifting. The change in the Coalition’s stance, encapsulated in its Investing in Britain’s Future publication at the end of June, rightly recognises the key benefits investment in economic infrastructure can bring. The often quoted construction multiplier effect, whereby every £1 invested generates £2.84 in total economic activity, has many attractions for a Government that is looking to speedily rejuvenate the UK’s economic fortunes. When such reprioritisation is factored into the Northern Ireland Executive’s budget, we can see that significant reallocations have been made, from current into capital, over consecutive Monitoring Rounds and as a result of Barnett Formula calculations. Indeed, in 2013-14 alone, an additional £145m of capital will be available to the Executive over and above what it initially expected.

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It is clear to us that there is little shortage of capital monies at our disposal in the short term. What is also clear to us, however, is that there are a number of Northern Ireland specific hurdles that remain to be cleared to make us a much more effective deliverer of infrastructure projects. One major aspect that continues to plague Northern Ireland’s ability to spend capital monies to most effective economic need – as seen in the wake of the postponement of the A5 – is the lack of a pipeline of so-called shovel ready projects. As a consequence of a sometimes bureaucratically inefficient business case process, through to the inability of Ministers and Departments to progress projects past pre-procurement stage without definitive monies having been earmarked for projects, we need to find ways and means to prepare a much more market friendly pipeline. This will allow firms the time to plan to bid for contracts as well as, where private finance may be involved, give the market sufficient confidence that a pipeline exists which is both an attractive and clearly deliverable prospect. While we have welcomed the significant progress made by the former Environment Minister Alex Attwood in speeding up the decision making around planning applications in his two years in office, we believe there remains much room for improvement if we are to secure the investment and jobs that we need. Recently the debate in the Assembly over the Planning Bill has provoked much

controversy. However it is important to note that, while others move ahead, we continue to lag behind. A new means of prioritisation for economically significant planning applications is something we believe should also be considered, albeit with the necessary attention paid to community consultation and sustainable development. A schedule of significant projects both in the public and private sectors should then be put to the Executive and Assembly for approval on a regular basis. A further area for examination is best practice in other regions. Aspects of models such as those of the Scottish Futures Trust and the National Development Finance Agency in the Republic of Ireland should be considered as we look to deliver infrastructure more speedily and with enhanced private sector expertise. That the Coalition Government, through Danny Alexander MP, announced at the end of June that it was to accept a key recommendation of Lord Deighton in respect of taking ‘crucial infrastructure delivery out of the hands of civil servants and into the hands of commercial experts’ is something we believe should be assessed at Northern Ireland level too. These key themes, and others, will be detailed in an infrastructure report that we will publish in September. We have undoubtedly made progress, but we need to now be much bolder in our approach to this subject.

THE NEXT 25 YEARS

Screen industry takes centre stage The strategy is in place to ensure that Northern Ireland’s burgeoning film and television sector will make a big contribution to the economy for years to come.

t’s amazing how many of our local politicians and business people have rushed to declare they are big fans of the gory and somewhat saucy medieval shenanigans of the hit series Game of Thrones. Such has been the success of the HBO produced drama and its links to Northern Ireland, that Stormont Ministers and MLAs have been singing its praises. Even First Minister Peter Robinson recently said he hadn’t missed a single episode (you wonder what the DUP hardliners think of that). That government has chosen to prioritise support for the creative industries should come as no surprise. The province has seen a run of high end international productions and local successes since 2007, when the region pulled in its first high-profile US studio project City of Ember from Tom Hanks’ production outfit. Universal Pictures then brought feature film Your Highness to Northern Ireland, before HBO arrived in 2009 to film a pilot of Game of Thrones that turned into four award-winning series. This month sees the start of principal photography on Dracula, the second feature film from Universal to film here. Projects to be filmed here in 2013 include The Wipers Times, Starred Up, Miss Julie, Our Robot Overlords, Line of Duty series two, Dani’s Castle series two, 37 Days, The Fall series two and Blandings series two. Even Bollywood has come calling, with an Indian film called One… Nenokkadine on location here over the summer. As well as bringing economic benefits, large incoming projects have helped spark fresh investment in infrastructure expansion, with two new sound stages built in the Titanic Quarter in Belfast, which provide a platform for skills development. Locally produced film has also gained further critical acclaim, with the widely lauded Terri Hooley inspired Good Vibrations and Terry George’s Oscar-winning short film The Shore catching the eye around the world. As with all FDI, winning the big international projects requires incentives and Northern Ireland has the Screen Fund – open to both incoming productions and indigenous – which

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is administered by NI Screen. NI Screen’s first strategy for 2007-2010 saw it invest £10.8m in film, TV and digital content production, expenditure from which was £54.7m, with £25m spent on employment on 28 productions. For every £1 invested, $5.08 came back into the NI economy and almost 3,000 cast and crew jobs were supported. Based on productions already completed and predicted, estimates for the 2010 to 2014 period are for significant growth. NI Screen’s funding for projects increased to £20.1m, but expenditure from this investment is predicted to be £120m with an estimated £54m on employment. If that estimate proves accurate that would mean just under £6 coming back into the economy for every £1 invested. Such production finance is not without criticism – studios in the Republic for example were aggrieved that Dracula was tempted north when it had been expected to go to Dublin. But funding incentives and tax breaks are common around the world. The incentives for Northern Ireland – and the UK in general – were improved further in this year’s Budget when George Osborne introduced a tax credit for high end television and animation. High end television is a market NI Screen has made no secret it is targeting over the next five to ten years, particularly given the payback from multiple series of Game of Thrones and plaudits for The Fall, starring Gillian Anderson. Studios and big name actors too are looking at cinematic television in a totally different way and with the likes of Sky and Netflix now actively creating original content, a whole new sector has effectively been created. So with its strong crew base, stunning locations, studio facilities and financial incentives, Northern Ireland is fast becoming one of the most sought-after filming locations for both film and television productions. And with the indigenous sector galvanised by a number of locally based production companies and post-production houses adding to the region’s growth, the future looks good. Northern Ireland is very much ready for its close up.

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THE NEXT 25 YEARS

Putting tourism on the throne Dr Peter Bolan from the University of Ulster believes the success of TV series Game of Thrones presents a huge tourism opportunity for showcasing Northern Ireland.

ilms or movies, and by extension television shows, provide us with a window into other places that broadens our knowledge and can fuel our desire to travel. What has become known as film-induced tourism has begun to gather momentum on a global basis as an area of both academic research and tourism industry interest. Successful film tourism examples include the Lord of the Rings movies and New Zealand, Braveheart and Scotland, The Sound of Music and Austria, and the likes of The Da Vinci Code bridging France, England and Scotland. This also presents a huge opportunity for tourism in Northern Ireland with the increasing number of high profile films and television shows being made here. In particular the award winning HBO television series Game of Thrones could herald a new era of film tourism potential for the province. The medieval fantasy series (based on the novels of George RR Martin) is being watched by millions and each one is a potential tourist. So far the media attention surrounding this has been concentrating on the economic impact of the actual filming and production here but the potential tourism spinoff is arguably much greater. Ireland is no stranger to the concept of film tourism and has in fact one of the earliest examples in John Ford’s 1952 film The Quiet Man which is still (some 60 years later) bringing coach parties of American tourists to the village of Cong, Co. Mayo and the region where the movie was made. David Lean’s 1970 film Ryan’s Daughter had a similar effect on putting Dingle on the tourist map and on the television side, the series Ballykissangel certainly boosted tourism to Avoca and Co. Wicklow. Now it could be Northern Ireland’s time to benefit from such an effect. The shining example of leveraging

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potential from film tourism however has been the Lord of the Rings (LOTR) movies and New Zealand. An extra NZ$32.8m was brought into the country through tourists influenced by the films and the New Zealand government even appointed a Minister of the Rings to maximise such potential. New Zealand was quick to brand itself as the home of Middle Earth. Game of Thrones has a similar tone, look and appeal and like the LOTR films has a fictional fantasy based setting. The first series used locations in and around Co. Down in particular and the second season utilised a number of key locations on the north coast such as Ballintoy harbour, the coastline around Dunluce and the beach at Downhill. These scenic locations have been showcased to millions of viewers across

Many scenes in Game of Thrones are shot on location in Northern Ireland.

the globe and to the American market in particular. That’s the kind of tourism marketing that money just can’t buy. Potential to entice these people here as tourists is enormous, though they have to know it is Northern Ireland they are seeing. So whilst this can be seen as an almost free form of marketing and promotion, tourist bodies do need to help raise awareness that Northern Ireland is the scenic location. The time is bright for tourism here right now, with the new Titanic project, the new Giant’s Causeway visitor centre, the Irish Open golf and further golf tourism potential, Derry city of Culture etc. The Game of Thrones effect can boost this yet further and shouldn’t be overlooked or ignored. The time to seize this opportunity is now.

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THE NEXT 25 YEARS

I.T. must show Digital love The IT industry has been identified as a sector which could be significantly scaled up in future. But there’s work to be done to ensure the indigenous digital sector doesn’t get left behind.

t is now taken as given that IT will be a key component of the Northern Ireland workforce in years to come. Some 28,000 people already work in IT and Momentum, the ICT Federation, believes there’s potential to increase that to 50,000 in the next five to 10 years. Those predictions are largely based on the success Invest NI has had in attracting inward investment from global companies like Citi, Allstate, NYSE, CME Group, Liberty IT and Deloitte. More multinational firms are being courted and the Department for Employment is aware of the need to get more young people studying computer science and IT degrees to provide the skilled workforce they need. The recently published annual ICT Snapshot survey of 300 organisations showed 28% of ICT companies had recruited in the last year and 60% were planning to recruit more over the next six months. Some 21% of ICT companies were searching for one or more ICT professionals, with developer roles comprising a fifth of advertised vacancies, and Microsoft, Java, C#, .NET, Linux and Cisco the most commonly sought skills. However, a third of companies expected it to be difficult or very difficult for them to recruit. As recently as May there were 1,000 unfilled IT positions in Northern Ireland. There have also been increasingly audible grumbles from smaller digital content producers, app developers and web designers, that finding talented people to work for them is impossible when competing with multinationals offering larger pay packets.

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Last month the organisation representing 300 businesses in Northern Ireland’s creative digital sector, Digital Circle, decided to become independent from Momentum. Far from being acrimonious it was a move which reflected a divergence in the goals of their members – as highlighted by Digital Circle’s Matt Johnston, in a blog posting. “I always described Digital Circle as being colourful software. Momentum dealt with serious software and serious business, whether that be insurance companies or financial institutions, and to reflect that the software was also serious and grey. Lots of forms and spreadsheets. Whereas Digital Circle members made software all the colours of the rainbow in the form of games and web sites. They took the design and crafting of the product seriously. They would do the right thing for a product rather than the expedient thing. Considering the time I spent at a large financial institution trying to manage a second line support team, I can say that large institutions writing grey software will always choose expedient,” he wrote. Johnston told Ulster Business bringing in FDI investors hasn’t provided any real supply chain benefits to indigenous local companies because much of their work is done in-house “In short, the FDI dividend for indigenous companies hasn’t happened to any appreciable degree because of a lack of understanding of the digital space,” he said. He thinks there’s a need for more investment in the sector to enable our local digital companies to compete globally.

“Digital products have advantages in a massive global market on your doorstep but they’re expensive to produce if you’re going for quality and we have much to learn in making products for markets other than our own. We’re low on investment in digital compared to other sectors and that’s a shame because, for example, the games sector in Northern Ireland grew 3000% in the last five years. The lack of investment just increases the time to market,” he said. “I’m fortunate to work with a sector of highly motivated and imaginative people, working on awe-inspiring products, collaborating and sharing freely. The missing links are in investment and skills. That’s why Digital Circle kicked off Coder Dojo across Northern Ireland last year, it’s why we worked with the University of Ulster to start 3D Dojo and it’s why we’re trying to bring a new games development course to Northern Ireland very soon.” Momentum is well aware that with rapid expansion comes growing pains and is putting strategy in place to meet the needs of the whole sector. Rob McConnell, chair of Momentum said: “We have been saying for some time that the future for the sector is bright, but growth presents challenges and will further exacerbate issues around the need for more highly skilled Digital professionals. “Our forthcoming Digital Summit is designed to look at all the barriers to growth and expansion, and put in place mechanisms to ensure that we can fully take advantage of the opportunities which exist in the sector.”

THE NEXT 25 YEARS

Retailers fighting to survive The retail industry will continue to be a big contributor of jobs to the economy but it faces strong different headwinds at present, writes Aodhán Connolly, Director of the Northern Ireland Retail Consortium.

hen looking at the future of retail in Northern Ireland, it really is a balance between the potential and

the reality. The potential exists to create jobs in retail and the supply chain that will help towards correcting the imbalance between public and private sector jobs in Northern Ireland. There’s also potential for even more community projects and corporate social responsibility from our sector, and the potential to provide consumers

with choice by keeping prices low through increased competition. However, all this potential is tempered by the reality of ever greater pressures on consumer spend and pressures on retailers from rising costs and further regulation from Government. These past six months have been tough for retailers in Northern Ireland. We have seen vacancy rates rise again to the point where almost one in five of our shops are lying empty. Footfall has been erratic to say the least with

“The potential of retail is tempered by the reality of ever greater pressures on consumer spend and pressures on retailers from costs.” 142 AUGUST 2013

Northern Ireland being consistently worse year on year than any other region in the UK. We have seen pressures on retailers from everything from street protests to adverse weather that caused footfall in the weekend before Easter to drop by an astounding 48 per cent. And we have seen over this past few years that the way consumers shop has changed dramatically. More and more consumers are buying online and this has continued to put pressure on the traditional high street. Our members have been at the forefront of both embracing this new technology and working with government on ideas such as Business Improvement Districts that will not only ensure the survival of the high street but encourage a change in consumer culture towards destination retailing. Destination retailing is the premise that, with the right mix of retailers large and small, the right blend of leisure facilities, a great offer of restaurants and bars and with accessible car parking, consumers won’t just pop in for a brief visit but will stay and spend their hard-earned money in a safe and welcoming environment. The next year will also see challenges from government. The NIRC is vehemently opposed (as are all retailers) to the introduction of a 10p tax on reusable bags. This tax is penalising consumers for being environmentally conscious and puts a financial burden on them as well as a financial and logistical burden on retailers at a time when both groups are squeezed. There is no scientific evidence to show this will make a viable difference and the single use bag tax has not even had 12 months to bed in. There are also proposals from the DSD to change how alcohol is sold in Northern Ireland. From walled off areas to alcohol-only tills, these proposals again will put a financial and logistical burden on retailers. A recent DEL update on retail stated that there is the potential for 20,000 retail jobs in Northern Ireland in the next five years, and here at the NIRC we would agree with this potential. However, we need government to work more closely with us to allow us to create jobs and investment at a time when it is crucial for Northern Ireland PLC.

Inspiring business at “Killy-Heaven”

n a business world you need a business hotel that inspires! Whether your event is large or small, business or pleasure, the dedicated conference and banqueting team at the heavenly 4* Killyhevlin Hotel will ensure it is an inspirational one. Located only 1km from Enniskillen, Co. Fermanagh the Killyhevlin Hotel has gained a reputation for being one of Northern Ireland’s most professional, versatile and flexible four-star hotels. The Killyhevlin Hotel offers the choice of six conference suites accommodating up to 500 delegates in a variety of styles. All conferencing suites and meeting rooms have natural daylight, with many of them boasting panoramic views over scenic Lough Erne. The Hotel also offers both residential and non-residential packages with the possibility of private dining from specially created menus and wines that will satisfy your guests. Residential delegates can enjoy complimentary use of the hotel’s exclusive Health Club, complete with swimming pool and outdoor hot tub, or can go that one step further and enjoy a luxurious pampering session in the Elemis Spa. As a venue for conferences, exclusive summits (the hotel was the international media centre for the recent G8 Summit), management training, team-builds and hospitality, the Killyhevlin Hotel ultimately offers the perfect escape, with space to think and peace to focus. The team at the hotel come with a wealth of experience and will be only too delighted to assist organisers in the planning and co-ordination of their event. For all bookings and enquiries, call the Killyhevlin Hotel today on +44 (0)28 6632 3481 quoting “Ulster Business” email conference@killyhevlin.com or visit www.killyhevlin.com

THE NEXT 25YEARS

Start-ups: The next generation The Hub, a new shared space for start-up companies, has been established in Belfast. Symon Ross ventured into the hive of creativity to find out about some of the entrepreneurs hoping to make it big with their new businesses.

here’s a wealth of evidence to suggest that start-up companies thrive in shared workspaces that encourage knowledge sharing and peer to peer support. So it makes sense that Invest NI this year opened The HUB, a shared space in the heart of the Cathedral Quarter for the exportfocused, high growth potential start-ups taking part in this year’s Propel programme. The HUB offers hot desks and meeting areas as well as open space for events and networking, with ongoing support from the Propel programme team. Diane Roberts from that delivery teams believes the space will really benefit the business owners. “I’ve been involved in a lot of programmes in Dublin and Cork and one of the main things that adds value is that they’re in a shared space. They’re in the same place every day, they’re interacting with one another, sharing stories, sharing information on grants, on how to complete forms,” she said. Propel received 119 applications this year, of which 62 were interviewed, 44 came through to the market validation programme and 26 then won

£20,000 in phased equity funding to help get their business off the ground. “What I think we’ve proved with Propel is that there are enough people out there who want to start their own business. We shouldn’t knock ourselves because entrepreneurship is alive and well in Northern Ireland and what we have here is as good as what I see in Dublin or Cork or other parts of the world,” said Diane. Here, we profile some of the entrepreneurs trying to establish innovative companies that will make a real splash in the future economy of Northern Ireland.

Tomorrow is a mystery, today is a gift

ith her husband’s background in forestry, and a business qualification from DARD, Catherine Cunningham was intrigued by the idea of creating an eco-friendly online business. The mother of four - a former Marie Curie nurse and a mosaic artist - lives on a farm with her husband Andrew, whose business is growing and planting trees. It makes sense that her e-commerce business, The Present Tree, would draw on that background. The company sells beautifully gift-wrapped young trees online to customers anywhere in the EU. Having researched her market and developed her own packaging and symbolic gift cards, Catherine decided she could do better than the competition both in terms of service, presentation and green credentials. She says trees are suitable gifts for many occasions, from weddings and birthdays to corporate gifts or even bereavements. “Trees used to be incredibly important and sacred. We’ve lost that connection and I’d love to get people more in tune with trees,” she says. “Each tree has particular significance – whether for a wedding or moving into a new home. They are also a great unisex gift because if you think about it you don’t often send a man flowers but you could send him a tree.” Catherine is hoping to establish the business and will then look to expand the idea overseas, to the US and even China, where people “are still into the meaning of trees”. “My vision is to work with tree nurseries in America. I could supply them with the seeds or they could use their own if people want native trees. The nurseries there would have my packaging, the trees would be bought from my website, have my card. Everything that goes with the integrity of the Present Tree stays the same. They would become an agent, like Interflora.” She knows she has a long way to go before then, but is confident the business will be a success. “I am not experienced in business but I have decided to say yes to everything and go for it. I’ve always known I wanted to do something that didn’t feel like working and this doesn’t. There are highs and lows but I feel like I am really living my life,” she says.

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THE NEXT 25 YEARS

Pushing the boundaries of publishing

eb designer Kevin McGrath was intrigued by the new reading experiences that the latest tablet devices offered and was curious about the design and development process behind them. It was this curiosity that led him to create ‘Beacon’ - a solution for publishing and selling digital magazines. He decided that with the low overheads of micropublishing, a small distribution can still be profitable and so a writer with an existing following from social networks like Twitter should be able to sell directly to readers at a reduced cost, with greater profits. “Every week you hear another story about the publishing industry struggling. What we’ve come to realise is that it’s not that people don’t want to read magazines, it’s that they are not being given to them in a format that suits them. So, writers can still write and readers can still read but there’s often a gap in the delivery of these great stories,” he says. “We’re hoping that our product will help the little guy to join the micro-publishing revolution. There’s no reason why independent journalists and writers can’t sell directly to their readers now. With social media they can reach them already, but what they can’t do is put together the mechanics of selling and publishing digitally. We take care of that and let them focus on the writing.” Beacon has 600 interested customers – some as far away as Canada - waiting to use the product. Kevin believes it is a growth industry, noting that Ed Williams, one of the founders of Twitter, has recently launched a new product to make long form content easily available. “I don’t think we are in direct competition to the traditional media. But it is an industry that is ripe for disruption. When you think the tools used to create a digital magazine are the same tools used to create a print magazine it doesn’t make sense,” he says. “We want to create an ecosystem of user generated content similar to the way YouTube has. It has created this great platform with amateur and professional content sitting side by side. If you want to watch a video you will go to YouTube before you even know what you want to search for. We hope to do the same for digital magazines.”

Making videos that create the radio stars

iarmuid Moloney is the man behind ‘Rotor’, an online music tool designed to create quick and customised music videos. He built the first ‘Rotor’ prototype as an application that scans a user submitted audio file and analyses its features, such as tempo and rhythm. This data can then be used to create and edit a video from user submitted images. “There is a huge surge in up and coming musicians at the moment what with it being so inexpensive to acquire music software and the ready availability of YouTube. But to stand out over the noise and to raise your status and get gigs musicians now need good videos, which take time and money they don’t have. Rotor is a solution that lets’s them quickly, easily and inexpensively create music videos for themselves,” he says. A graphic designer for the music industry, Diarmuid retrained in creative technologies and with the help of friends built the first version of Rotor as a university process. Rather than the displays used by DJs he wanted visuals to be created from the sound, to give an emotional connection to those listening and watching. With the core application now developed the full product and website will launch soon. “Obviously our initial market is the upcoming musician who doesn’t have access to video but there’s also potential for it to be used as a marketing tool. We’ve been approached by a number of marketing agencies who are interested in using it in their promotional campaigns,” he says. Coming from a creative background he says Propel has been hugely beneficial for him and his co-creators. “We have the skills and expertise to develop the product but we didn’t understand fully how to operate it as a business. We learnt a bit ourselves and thought we had it sussed out until we came to Propel. They have really drilled into it and highlighted the key areas we need to work on and how to fill those gaps,” he adds.

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THE NEXT 25YEARS

A start-up that’s on a voyage of discovery

graveyard may seem an unlikely place to develop a business idea, however online start-up Discover Everafter has proved that inspiration can come from the most unusual places. The brainchild of Leona McAllister, the online tool aims to modernise how the death of our loved ones is recorded through the use of its cemetery management software and genealogy resource. Using interactive cemetery maps to identify the geographical location of a headstone combined with photography and transcriptions, the software offers a new depth of genealogy access to interested parties both at home and abroad. Portglenone based Leona McAllister and husband Sean realised the value of this innovative idea when she was commissioned to do a survey of her local parish graveyard, including transcribing the inscriptions and capturing images of the headstones. “It was a simple spreadsheet with hyper-links to photos which we thought was pretty basic, but the priest thought it was a fantastic resource,” explains Leona. “When we thought about it we realised we might be on to something. A lot of parishes still keep records in burial books which are subject to fires and hard to search.” The business is now developing a software package that can go head to head with existing cemetery software companies, as well as exploring the growing interest in genealogy. So far it has 94,000 burial records on the site and 3,000 monthly users. “Unlike other websites out there for genealogy we have real good quality data when it comes to the burial records because there is a geographical location to each of the plots and a memorial headstone photograph and full search facilities,” she says. “We have a product, we have a website. But we’re turning that into a robust system that incorporates everything that comes with managing a cemetery. In particular the mapping side of things is where our expertise lies. Most cemeteries have big paper maps, we’re changing that with GPS surveys and incorporating online maps,” she adds. “We want to be the software of choice for cemetery managers throughout the UK, Ireland and beyond. But we’re starting closer to home.”

Not your average Zombie business

proar Comics was launched in 2011 by Derry locals and lifelong comic book fans Kevin Logue and Danny McLaughlin. Having gained recognition for its flagship publication, the award winning ‘Zombies HI’, Uproar is now exploring new possibilities and using the latest technologies to create truly interactive comic books. “We’re creating a multimedia publishing platform that will allow the user to develop once but distribute their work on multiple platforms without the need for redesigning because we use responsive codes. To maximise your market you want to be putting it out onto as many devices as possible,” says Kevin. “Our goal is to create an experience for new age digital comic readers. Market intelligence shows this is a viable market that has expanded every quarter since 2010. It is a great market to be tapping into.” Kevin, who started out as a comic book artist before becoming Uproar’s MD, found customers felt they were paying too much for the same content and wanted a new experience for a new medium. “When we were young myself an Daniel McLaughlin, the creative director, were always writing new Star Wars and Star Trek stories. We were very much true born geeks, through and through. Then as we got older we did the Comic Art and Digital Illustration course from Marvel over 30 weeks and when the course stopped we realised there was nowhere to take these skills in the UK. So Uproar Comics was born,” he says. Uproar has a contact list of 40 artists and writers and runs an open submission policy for its current publications. Kevin says its main point of differentiation is its local tone. “We made a point of making sure everything we did was identifiably Irish. People were starting to get bored of everything happening in Manhattan. You pick up a Mavel or DC book and that’s what you see. People loved the freshness and the fact they were set in Belfast and Derry, and Dublin and Galway – people liked our turn of phrase. We’ve started getting a bit of American traction and the response from overseas people is it is really refreshing, it has authenticity,” he enthuses. “Propel has given me enough direction and new knowledge that I already feel that the business is geared in the right direction. With their help I can now see that by 2014 we will be globally scalable business.”

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Raymond Mulligan, Director of Johnston Campbell, delivers an insight on the company’s growth plans as it appoints new directors and targets the London market.

London’s calling T

hose in Northern Ireland who regularly take the ‘red-eye’ to London will doubtless have spoken to many colleagues in the capital who will have told them, ‘there’s been no recession or downturn here’. While in one sense it’s a sweeping generalisation, in another it appears perfectly true as any observation of the sheer volume of economic activity going on in the city will reveal. Increasingly for Northern Ireland companies bereft of a growing market at home, the attraction of London as a growth opportunity is hard to resist. More companies, from a wide range of industries and sectors, are taking the step of exploring what is on offer. At Johnston Campbell we are no different. With a strong belief in our people, our capability and our knowledge; we too have entered the London market looking for commercial opportunities. So far, so good. While the market at home remains core to our business the decision to explore what is happening in the city was taken with an understanding that to succeed we would need to be totally committed and that commitment is starting to pay off. Furthermore there has been an added value impact for our clients in Northern Ireland as the knowledge gained in London has been transferable and as a consequence is delivering new opportunities here in Northern Ireland. And so, in making the move we have strengthened our team in Belfast with four new directors. Jamesina Doble has been appointed Director of Investment Management; Kerry McCaughan is the Director of Wealth Management; Jonathan Simpson is Director of Financial Services and Conall Reilly is Director of Pensions.

(L-R): Kerry McCaughan, Director Wealth Management; Conall Reilly, Director Pensions; Jamesina Doble, Director Investment Management and Jonathan Simpson, Director Financial Services.

Each new director brings a strong business acumen to the role, an empathy with what individual clients need and a rock solid integrity that is well recognised in both Northern Ireland and London. This core team along with company Directors Graham Glover, Raymond Mulligan and Ewan Boyle pro-actively places Johnston Campbell in both markets delivering growth for their clients and their firm. Part of that growth has come from forming strong relationships and alliances with

established professionals both in Belfast and London. The alliances are important as they bring a greater sense of added value to the service of the client in the provision of a comprehensive financial strategy. In an economic climate where confidence in financial institutions has been damaged in part by the banking crisis, the more insight that can be brought to bear on a client’s needs, the better the solution and outcomes will be.

8 Cromac Place, Belfast BT7 2JB • Tel: 028 9022 1010 • www.johnstoncampbell.com

THE NEXT 25 YEARS

A leisure centre for geeks Hackerspaces are increasingly coming to be seen as vital components in the development of great ideas into useful technology. Here, we profile Farset Labs, one of the first hackerspaces to open in Northern Ireland.

n 2010, Andrew Bolster was in New York at the ‘Next HOPE’ conference, where hackers, electronics enthusiasts, security consultants, software developers and freedom fighters from all over the world come together to share their ideas, projects, and thoughts. Those thoughts ranged from Anti-Face recognition makeup and disaster proof wireless networks for earthquake zones, to panels on the future of IPv6 and the stability of world wide DNS services. After visiting AlphaOne labs in Brooklyn and meeting Mitch Altman, the founder of San Francisco’s Noisebridge hackerspace, Andrew started down the long road of trying to set up a space in Belfast. In April 2012, after nearly two years of planning, several weeks of hard labour and the blood, sweat and tears of a core community of technologists and entrepreneurs, Farset Labs opened its doors as Northern Ireland’s first Hackerspace, based in Weaver’s Court Business Park in South Belfast. Five minutes from the Europa Bus Centre (and the same distance from the nearest pizza delivery place) Farset Labs is a haven for technology enthusiasts in all their forms. Born out of the frustration of not having anywhere to experiment, share equipment, share knowledge, and collaborate without having to put up some kind of cross-institutional banner – let’s face it, when was the last time QUB and UU students collaborated on anything – Farset Labs is an independent hub for thought, exchange, and outreach. On a day to day basis, Farset Labs operates like a “leisure centre for geeks”. Members pay dues to be able to come into the space and grab a hot-desk, or use the 3D printer. To experiment with its Quadcopter, or to borrow a Raspberry Pi (a credit card sized computer), to re-solder a Gameboy to become a musical instrument or to extract DNA from samples using a pedestal drill and a Quality Street tin. These members range from school leavers to retirees, with a range of experience from utter technophobe to guru-level. The greatest asset it has is the ability for someone to stand up in the space, say they’re having trouble with some particular system, technology, or idea,

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“FARSET IS NOT AN INSULAR COMMUNITY OF ‘NERDS’ BUT AN OUTWARD FACING VANGUARD OF NEW IDEAS.” and nine times out of ten, someone will know something about it and be more than happy to help out. Farset also gets involved in the wider community, though programmes such as CoderDojo, where children as young as four are given the opportunity to learn the fundamentals of computer science and critical thought. Having previously contributed to the NISP Connect Generation Innovation programme, the Bank of Ireland Young Enterprise Awards, W5 STEMNET, Princes Trust, and more, Farset is not an insular

community of ‘nerds’ but an outward facing vanguard of new ideas and technologies. With an ethos of knowledge sharing, respect, experimentation, and light hearted banter, Farset has already attained a reputation within recruitment circles for producing individuals who go that extra mile; who have real experience and practical knowledge about real tools and real systems, as well as being fantastic self-driven learners. And while its founder says these ‘hackers’ may occasionally break things, well, that’s just the price you pay for innovation!

THE NEXT 25 YEARS

STEM ‘must be made compulsory’ The curriculum in schools needs to refocus on STEM subjects if Northern Ireland really wants a place at the table when it comes to high value industries, according to the chair of a leading STEM organisation.

orthern Ireland can forget about becoming a successful Knowledge Economy unless there is a fundamental overhaul of the schools curriculum to embed STEM subjects earlier. That’s the view of Jim Stewart, chairman of Sentinus, an organisation that works with over 60,000 young people every year to deliver programmes that promote engagement with Science, Technology, Engineering and Maths (STEM). Mr Stewart believes that while progress is being made to raise the awareness of STEM’s importance to the economy, the schools curriculum in Northern Ireland is still “a bit of a joke”. “The curriculum should include more compulsory STEM involvement at an early age rather than be left to the discretion of the school or the teacher, which means they don’t really do it,” he said. “From the last two years of primary school they should be getting an introduction to STEM and I think STEM should be compulsory right through to 16,” he added. “We think you get the interest from students at the early age. You have to get them bought into this area from primary school. If they are sufficiently enthused at primary school they will want to continue to do this. That is vital to the future of the economy here.” While he acknowledges that a shortage of STEM graduates is being addressed by the Department of Employment & Learning he believes Northern Ireland’s economy will fail on a number of levels if we don’t equip our future workforce with the necessary STEM skills at an earlier age. “We will get left behind. Companies from the likes of Japan and the US who are thinking of investing here are not coming out of sympathy. They are shrewd business people. They will want to come here provided all the requirements are here and that means a well qualified, educated workforce, including STEM. If we don’t have what they are looking for, all the good work from the G8 will be for nothing,” he said. “I’m always struck by a comment I read in Steve Jobs’ book. He was asked by President Obama how many people he employed in China and the Far East and his answer was in the

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Pictured at the Sentinus Young Innovators Exhibition at the Odyssey Arena are Sean O’Dolan and Nathaniel Mills from St Mary’s Primary School, Mullymesker, Enniskillen working hard at the Sentinus Construction Challenge.

hundreds of thousands. Obama asked why he couldn’t bring those jobs to the US and he said in order to have that number of employees he’d need 30,000 engineers and the US didn’t have them. The same scenario for me exists here. If we want more of the Seagates and the Duponts, more of the high paid, quality jobs that you have in a knowledge based economy, you need STEM graduates coming out of university.” Mr Stewart said there is a huge demand for STEM in schools and enthusiastic teachers but the resources are not available to meet that demand. “The Department of Education give us good support, but at the same time there are a

lot of people missing out on the opportunity. We see 60,000 school kids a year but that’s only 18% of the student population of the age ranges we cover. We are oversubscribed in every programme we do. We get £400,000 from the Department and we triple that in other contributions, so the end result is extremely good value for money,” said Jim. “We have 108 MLAs up at Stormont. Only six of them have a qualification or background of employment in a STEM environment. I’m not trying to say that means they’re not interested. But if you are from the STEM area, you understand it. I don’t see the opportunity for young people here.”

Addressing gender balance in STEM Joanne Stuart, a Matrix panel member and Chair of the STEM Business Group, believes getting more women involved in STEM is the only way to plug the shortfall of skills in our workforce.

n Northern Ireland some employers, who need key science, technology, engineering and mathematics (STEM) skills are facing difficulties recruiting and retaining enough staff who have the necessary levels of qualifications and skills. And this isn’t just a problem for Northern Ireland. The Social Market foundation recently estimated that there is a 40,000 shortfall each year in the number of STEM graduates in the UK. According to the National Skills Forum “the limited number of women entering science, engineering and technology (SET) exacerbates skills shortages in these sectors, reducing the productivity of SET organisations and making it harder for them to compete on the international stage”. Engineers Ireland, in their report Engineering Perspectives, pointed out that “men outnumber women in the engineering profession by nearly nine to one”. In the Northern Ireland economy, high level STEM posts currently comprise over 11% of the workforce with men outnumbering women by nearly three to one. Contrast this with the overall employment situation in Northern Ireland where women constitute 47% of all those aged 16-64 currently in employment and it is clear that a proactive approach to

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address the gender imbalance within the STEM industries is needed. This challenge is recognised by the Government and was highlighted in an oral statement to the Assembly on June 4th by the Minister for Employment and Learning, Stephen Farry MLA, who said: “I want to ensure our society is aware of these gender issues and their potential impact on key areas for growth. The Executive’s Economic Strategy identifies a number of priority growth sectors which include Telecommunications, ICT, Life and Health Sciences, Agrifood, Advanced Materials and Advanced Engineering. Future growth in jobs will be concentrated in these areas and we must ensure equitable access by gender to maximise our local pool of available talent.” The ‘Success through STEM’ strategy includes a recommendation on the need to address the issue of gender bias. As part of the work in this area the STEM Business Group (SBG), in partnership with the Equality Commission, recently held a seminar ‘Addressing Gender Balance – Reaping the Gender Dividend’. This seminar, attended by over 70 delegates, looked at the issue of gender bias, the sharing of best practice and identified some additional steps that businesses could take to make careers in the STEM industries more

attractive to all – and particularly to women. So where does the problem first begin? The figures, from 2010/11, show pupils choosing STEM subjects at both GCSE and GCE (A) level are fairly balanced between boys and girls. However, there is a marked difference in Physics and ICT at GCE level. Physics is one of the least favoured choices for girls but interestingly shows the largest difference in achievement as 86% of girls achieved A* to C grade compared with 80% of boys. The difference is more pronounced in tertiary education choices. In Further Education 25% of males opt for STEM courses, compared with only 13% of females. In Higher Education, females account for 38% of total STEM enrolments. Over the period 2007/08 to 2011/12 the total number of male STEM enrolments increased by 12% but female enrolments decreased by 2%. There is a notable gender difference in Mathematics enrolments: male enrolments were up by 19% and female enrolments down by 12%. Computer science also follows a similar trend with male enrolments up by 12% and female enrolments down by 8%. Only 8.6% of participants undertaking apprenticeships in STEM related areas are female. The initiatives being taken by government departments and other organisations designed to attract more girls into STEM sectors are very welcome. However, given the projected growth in these sectors and the projected skills shortages in these areas, a greater collaborative effort is needed from business, government and education to engage, encourage and inspire young women to aspire to STEM careers. The SBG is preparing a set of Good Practice Guidelines and a Business Charter. Using these documents and continuing to engage within the education artery will enable organisations to demonstrate their commitment to supporting gender diversity and equality and help them to increase the pool of talent in their businesses. The message that the STEM industries provide exciting and rewarding career options is not yet being heard. Only by attracting and retaining a more diverse better qualified workforce will businesses maximise innovation, creativity, and critically their competitiveness. Joanne can be contacted at joanne.stuart@attrus.com

INNOVATION

Unveiled: the

25k Top Ten innovators

Philip Mills from Columbus (QUB) in action.

en innovative hi-tech teams have successfully pitched their product ideas to go forward to the final round of the prestigious 25k Awards, a key part of the NISP CONNECT programme. Entries range from a hydrogel that pours drugs into wounds and intelligent data gloves for arthritis sufferers, to pollution-eating inks and real-time route planners for in-transit travellers. The overall 25K Awards winner, as well as category winners for Bio-tech, Clean-Tech, Hi-Tech and Digital Media & Software, will be announced at a Gala Dinner in Belfast on September 26. The companies who were successful in pitching their product ideas to a respected panel of judges were: In the Bio-tech category, Jenarron Therapeutics Ltd, from University of Ulster, has developed a novel hydrogel drug delivery product. When applied to an open wound or laceration, it results in painless suturing with improved clinical outcomes and a superior patient experience. Digitease’s (UU/Health and Social Care NI) first product focuses on rheumatoid arthritis care and treatment for the hand through an

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intelligent wearable data glove system which quantifies finger joint stiffness and range of movement. The third contender in the category, ProAxSiS (Queen’s University Belfast), is developing a range of novel diagnostic tests which will enable routine monitoring of patients with chronic conditions such as cystic fibrosis, either within the clinic or at home. In the Clean-tech category, ADFerTech (QUB) is developing a low-cost, bolt-on device for anaerobic digestion plants whereby nutrients contained within the waste are concentrated and processed to form organic granular fertiliser. Their competition is Inkintelligent (QUB), which has developed a number of patented inks that change colour rapidly when deposited onto a self-cleaning surface using, say, a marker

pen. These are ideal for marketing and quality control of self-cleaning materials. Columbus (QUB), a contender in the Digital Media & Software category, is a realtime personal travel assistant which provides public transport users with dynamic, up-tothe-minute information about their travel plans using powerful new mathematics and network analysis. Meanwhile, Liopa (QUB) is aiming to win with a novel new mobile biometric speaker verification solution which can verify user identity by analysing their viseme profile, a unique biometric characteristic which can help prevent theft and identity fraud. Three innovative companies, two from University of Ulster and one from Queen’s, are competing in the Hi Tech category.

“It is clear we have the capacity to be one of the leading knowledge economies in Europe by 2030.”

INNOVATION

A tyre pressure monitoring system which uses a smartphone as an activation tool in response to European legislative changes requiring all cars to be installed with TPMS has been developed by Xpress LF (QUB). However, one which might catch the judges’ eyes comes from Eye-See 3D (UU). This is a high resolution camera designed to picture the back of the eye in 3-Dimensions in order to deliver cost effective imaging and telemedicine for eye disease. Last, but not least, Nite Rider’s (UU) first product is an accessory which will enable motorcyclists to see further at night, with the aim of reducing the number of individuals killed or seriously injured on our roads. The 25k finalists have exactly the kind of indigenous innovative ideas that could transform the Northern Ireland economy, says Steve Orr, Director of NISP CONNECT. “It is clear we have the capacity to be one of the leading knowledge economies in Europe by 2030,” he said. “There is enormous potential for local companies in the tech sector to compete in the global market while producing high quality, high paid jobs.” Michael Robinson, who looks after Marketing for the Agri-Food & Biosciences Institute (AFBI) and sits on the programme’s steering committee, agrees. “There are many innovative products out there that no one has heard about,” he said. “25K is a good way of getting those ideas into a Ten businesses presented their ideas at the Quick Pitch event.

The audience gets its head around the complex ideas.

public forum and for like-minded organisations across Northern Ireland to work together to help commercialise that potential.” It’s an area in which AFBI has much experience. AFBI’s work on developing a porcine circovirus’ vaccine to reduce the incidence of a wasting disease in pigs, has helped create one of the world’s largest selling production animal vaccines, generating a multimillion pound royalty stream for the Institute. The team at AFBI is currently actively working to commercialise new Intellectual Property in areas

that include diagnostics and potential vaccines for poultry production. Dr Paul Donachy of QUB and Tim Brundle of University of Ulster are proud not just of their respective teams’ ideas, but also of their commercial awareness. “As a Russell Group university with a huge research portfolio it is important for us to look at where economic impact lies within the research base not just to grow the local economy, but to make the entire region attractive for inward investment,” said Paul. “So while there is still a place for blue sky thinking, it is important to commercialise our high quality research and bring new products and services to market.” The University of Ulster claims the honour of being the most active university on the island in terms of their innovation portfolio and programme of technology transfer into the commercial world. “We recognise that we need to aggregate our resources in order to invest in the long term success of hi tech start-up businesses and talented young entrepreneurs,” said Tim. “All our assets across NI, from ideas and tech management to leadership skills and professional services, need to be available to create an eco system of open innovation programme.” Dr David Brownlee of HSC Innovations, the technology transfer service for Health and Social Care in Northern Ireland, works to seek out and progress innovative ideas in the health sector. “25K offers an opportunity of raising awareness of what’s involved in the process of transforming a good idea into a new product that can help to secure real improvements in healthcare practices locally, nationally and globally,” he said.

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BUSINESS FINANCE & BANKING

Protecting you and your business By Glenn Branney, Chartered Financial Planner, Barclays Wealth & Investment Management. profit, reduced sales, or recruitment and training costs.

t is often said that ‘people are the life blood of a business’ and arguably, this statement could not be truer. If a business owner, partner or key employee dies or falls ill, then the impact on the business can be enormous, especially for small to medium sized firms. The success of many businesses will depend to a large extent on the skills, knowledge and abilities of one or more key individuals. The sudden, unplanned loss of one of these key people would certainly have a serious impact on the business, affecting profits and in a worst-case scenario, forcing it and its remaining management into bankruptcy. All businesses are well versed with risk management and the use of insurance. Many are likely to already have professional indemnity insurance, public liability insurance, legal expenses cover and policies covering vehicles, premises and stock. Many top companies also provide additional benefits to employees such as private medical insurance, life cover, income protection cover and fund a pension scheme. But many businesses will not have made arrangements to protect what may well be their greatest asset, their people.

People risks in numbers: 1 • 1 in 4 men and 1 in 5 women will suffer a critical illness before 65 • 43 – the average age for a stroke • 43 – the average age for cancer • 47 – the average age for a heart attack • 42% of businesses fold within two years of the death or critical illness of a key individual.2 So how can you protect against such unfortunate circumstances? At Barclays, we aim to protect your business by helping you identify people risks and put

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appropriate plans in place. This will ensure that your business can continue to deliver to its customers, shareholders and investors in any eventuality. Business protection can provide peace of mind by ensuring:

• Business loans can be repaid in the event

of the death or serious illness of a director or partner. This is particularly important where an individual has the role of guarantor.

• The business can overcome the loss of any

individuals who make a major contribution to the company’s profitability.

• The surviving shareholders or partners keep

control of the business if a major shareholder or partner dies or falls seriously ill.

Key Person Protection Business owners should be able to identify those who are key in their own business although many will not have fully thought through the financial implications of an unanticipated loss of the key person’s services. A key person is anyone whose efforts drive business forward, creating profits or perhaps hold a high expectation of future profits. Key Person Protection helps protect a business against the financial fallout of a key person dying or falling terminally or critically ill during the term of the plan. With Key Person Protection, the business takes out a life insurance plan, with or without optional critical illness cover, written on the life of the key person. The plan is owned by the business, which also pays the premiums. In the event of a claim the sum assured is therefore paid to the business and can be used to cover a loss of

Shareholder/Partner Protection Unlike other forms of business protection, shareholder (or partner) protection covers each person who has a significant share in the business rather than the company by providing a fund to enable the remaining parties to ‘buy out’ the share of a business colleague who has died or becomes too ill to carry on working. When used as part of a suitable arrangement, the remaining business owners can choose to buy out the interest of a critically ill or deceased business owner. It also helps to ensure that the business owner’s family receives the full value of their interest in the business on death. Without this type of cover, control of the business could pass to someone who has no experience of, or no interest in, the day to day running of the business or may even want to sell their share rather than becoming involved in the business with the remaining owners not having the ability of raising capital. In summary Protecting the people risks in your business is every bit as crucial as accounting for risks such as fire, theft or any other business interruption. By putting the right protection policies in place, you can provide a benefit for key staff, make sure family members are protected from business liabilities and ensure your business’ future is fully safeguarded. Our expertise in identifying and mitigating people risks comes from years of working with businesses of all sizes and structures. It has given us a clear understanding of what solutions are right for what businesses. To review your current business continuation measures or to learn about the cover that could better protect your people and your company, talk to us. Barclays does not provide tax or legal advice. We therefore recommend that you obtain independent tax and legal advice tailored to your needs. 1 2

Legal & General, 2011. Institute of Directors, January 2011.

Glenn Branney can be contacted at the Barclays office in Belfast by email: glenn.branney@barclays.com or Tel: 028 9088 2925

CORPORATE RESPONSIBILITY

Games partnership a perfect fit Thousands of volunteers played a crucial role in the operational delivery of this summer’s World Police and Fire Games( WPFG). Coca-Cola HBC Northern Ireland Communications Manager Zoe Cunningham, who joined the Games Media Team as a volunteer, looks at the benefits and legacy of involvement in the event.

t the end of August last year WPFG organisers launched a campaign to recruit over 3000 volunteers to help Belfast deliver the ‘friendliest Games ever.’ Managed from the outset by Volunteer Now and backed by WPFG sponsor Coca-Cola HBC Northern Ireland, the team rolled out a proactive recruitment campaign and road-show, culminating in BBC network coverage on The One Show as registrations drew to a close. Local enthusiasm for being part of the volunteer action – no doubt partly inspired by London 2012 – was staggering, with a record number of volunteer applicants registering. Some of the first volunteers to sign up were 18 Coca-Cola HBC Northern Ireland employees who were put through their paces during a Selection Event interview session in January. Following application analysis, role matching and allocation of roles, Coca-Cola staff joined their fellow volunteers at a special Volunteer

Orientation Event held at the King’s Hall in June, hosted by local comedian Tim McGarry and supported by ‘mentalist’ David Meade. This was the first time that the majority of the volunteers had gathered together under one roof and the atmosphere was electric! The common denominator was clear – everyone was delighted to be involved in such a massive sporting and community event and wanted to show off the very best that Northern Ireland has to offer to the international competitors, their families and all the Games visitors. Everyone also noted that they would personally benefit from meeting new colleagues and developing new skills sets. A lasting legacy of the 2013 World Police and Fire Games is the creation of a diverse pool of skilled volunteers for future events held locally as well as demonstrating Northern Ireland’s ability to organise and host major international events which involve huge numbers of volunteers.

“It was important that we led by example, encouraging our own employees to be actively involved.” 160 AUGUST 2013

As a local business Coca-Cola HBC Northern Ireland has been actively supporting and investing in the local community since it was founded by Tom Robison in 1939. Volunteering is part of our employee engagement programme and many of our staff members have already been involved with the Coca-Cola Clean Coast programme managed by Tidy Northern Ireland as well as fund raising activities for our charity partners NI Hospice and Arc Cancer Support Centre. Our WPFG volunteers will be bringing all the new skills and expertise they have learned through the Games back into the company. The Games partnership has been a perfect fit for Coca-Cola HBC Northern Ireland as it enabled us to build on the excitement, inspiration and legacy of London 2012, CocaCola’s global involvement with the Olympics and the Coca-Cola Future Flames initiative. It also dovetailed with our ‘Share a Coke’ campaign as we encouraged volunteers to Share a Coke and their 2013 WPFG experience with friends and family both at home and internationally. It was also a natural fit with our focus on grassroots active lifestyles where we support initiatives which promote active living and encourage people to be active. A key aim of our Volunteer programme sponsorship was to inspire people from all walks of life to get involved and give something back to their local community – both for the Belfast Games and after the Games baton had been handed over to Fairfax. It was important also that we led by example encouraging our own employees to be actively involved in the Games and to continue with their volunteer work into the future. As official Games hydration partner we also donated any left over product to a range of local community and charity organisations including the SOS bus. Through our partnership with the Games our long term aim was to encourage people who had never volunteered before to be inspired to give volunteering a go and for those who had already picked up the volunteer baton to get involved in new and different projects. We also wanted to help re-ignite passion, community spirit and pride throughout Northern Ireland.

CORPORATE RESPONSIBILITY

NI businesses compete to ‘Make a Million’

This year’s teams (L-R): Ulster Bank, JCI, ShredBank, Asidua, Adelaide Insurance, Abbey Bond Lovis and Chemical Treatment Services

he Prince’s Trust and eight of Northern Ireland’s leading companies have signed up for the Million Makers Corporate Challenge 2013. Each company is aiming to turn an initial £1,500 investment into a fundraising profit of £10,000 in just six months by establishing and running a mini-enterprise. Now in its sixth year, the fundraising competition has successfully raised £250,000 to help The Prince’s Trust support disadvantaged young people from the ages of 13 to 30 across Northern Ireland. Million Makers is an opportunity for companies to engage, inspire and motivate employees to develop many transferable skills such as leadership, motivation and decision making, while generating funds to help young people turn their lives Ulster Bank (L-R): Sean Murphy, Paul Thompson, Asidua (L-R): Paul Matthews, Sophie Gaw, Alistair around. Chris McVeigh and Stephen Cruise (kneeling) Massey and Irene Gates The companies participating in this year’s competition are Abbey Bond Lovis, Adelaide Insurance, Asidua Software Consultancy, Chemical Treatment Services, Junior Chamber International, ShredBank, Ulster Bank and a team from The Prince’s Trust programme staff. At the launch day Lee-Ann Calwell from Adelaide Insurance said: “Adelaide Insurance Services see this challenge as the ideal opportunity for our Million Makers team to further develop the business skills and abilities that we require for our every day job roles. However, the bonus will be raising much needed funds for The Prince’s Trust, which transforms the lives of young people within our own local communities.” Ian Jeffers, Director of The Prince’s Trust in Northern Ireland welcomed the support from all of the teams saying: “The last round of Million Makers was an overwhelming success. This year I know that the teams will throw themselves wholeheartedly into the competition with the goal of collectively raising even more money helping local young people to get their lives on track and move into work, education or training.” ShredBank (L-R): Morgan Watson and Philip Bain

If you think your company has what it takes to be a Million Maker, then why not sign up for next year? For more information contact Arlene Creighton on 028 9089 5019 or email: arlene.creighton@princes-trust.org.uk

NEWS

Irish brands contribute to Diageo profit lift

One of the special bottles of Bushmills presented to G8 leaders.

iageo’s iconic brands from Northern Ireland and the Republic have played a big part in delivering an 8 per cent rise in annual profits at the global drinks giant. The PLC said that its pre-tax profits for the year to the end of June 2013 hit £3.5bn, compared with £3.2bn the year before, while sales rose 5 per cent to £11.4bn, driven by the US and Latin America. Diageo said its Irish brands continued to expand their global presence in the year, driven by a 12 per cent net sales growth in Bushmills, 2 per cent

net sales growth in Baileys and a 1 per cent net sales growth in Guinness. Michael McCann, Country Director for Diageo Northern Ireland, said: “Long term sustainability and exports have been a key focus for Diageo Ireland over the past 12 months. Strong exports of Guinness, Baileys and Bushmills brands are very positive for the Irish economy and the Irish export market – 70 per cent of Guinness, 85 per cent of Bushmills and 90 per cent of Baileys is exported. The new St James’s Gate Brewery will be one of the world’s most technologically advanced breweries upon completion in 2013.” Bushmills increased net sales in all of Diageo’s five regions, with a particularly strong performance in the markets of Russia and Eastern Europe, where it grew 36 per cent. Growth in Baileys was driven by a global re-launch, including its new ‘Cream with spirit’ campaign, new pack and retail design. In Ireland, Baileys performed well and grew 9 per cent. In the United States, which accounts for more than a quarter of the brand’s net sales, Baileys performed strongly with 9 per cent net sales growth driven by a new advertising campaign and the launch of a new Hazelnut flavour. Baileys continues its growth trajectory in emerging markets, with double digit net sales growth in Russia, Africa and China. Across the island of Ireland the beer market contracted. Guinness holds a market share of 33 per cent, which equates to one in three pints consumed in a pub in Ireland. Globally, Guinness net sales grew by 1 per cent. Growth was driven by Africa, the largest Guinness market by volume, while in its largest market by value, Western Europe, net sales were down by 3 per cent driven by beer market decline and economic uncertainty. This resulted in an overall global Guinness volume decline of 2 per cent. The spirit market on the island contracted by 3.5 per cent but Diageo grew its volume share by 0.9 percentage points with increased sales of Captain Morgan and Bushmills.

Yelo aims to double its turnover by 2016

arrickfergus-based technology company Yelo is undertaking a £1m expansion with support from Invest Northern Ireland that will see it create 15 new high quality jobs. Yelo, which designs and manufactures automated test equipment for the international electronics market, has been offered £230,000 of support by Invest NI. Its three year expansion project includes a £241,000 investment in research and development to enable the company to expand its products and target new export business. Yelo exports 80 per cent of its equipment and has recently won contracts from major corporations in the US and China. Following the investment it is aiming to double its turnover by 2016. The company, which currently employs 26 people, was formed in 2010 in a buy-out of the then Canadian-owned business by its management team of Richard Furey, Dave Sinclair and David Simms. The new jobs to be created in the next three years will be in electronics and software engineering. Yelo sales director David Simms is pictured with Invest NI’s Jeremy Fitch.

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Executive Motoring By Pat Burns