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IN DEVELOPMENT: NEw VC fuNDs OPEN

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THE MAsTErPLAN:wILL THE sTrATEGYfOr bELfAsT wOrK?

Danske Bank’s Gerry Mallon explains why he believes a corner has been turned both in the economy and in his bank.

Point ofinflection

48

20

features14 - Cover Story – Danske Bank18 - Interview – NISP 25k 20 - Interview – Denman32 - Belfast Met on Apprenticeships48 - Launch of NICEP

fOOD, DrINK& aGrICuLture24 - Interview – Karro Foods26 - Cavanagh Kelly 28 - NI Food & Drink Show 30 - Interview – Diageo NI

PrOPertY & CONstruCtION 36 - John Simpson38 - Osborne King40 - Profile – Expelliere42 - Worthingtons44 - A&L Goodbody

BusINess fINaNCe& BaNKING52 - Interview – Development Funds56 - NI’s Funding continuum58 - First Trust Bank60 - Close Finance62 - KPMG

PeNsIONs & WeaLtH 66 - Auto-enrolment68 - Ralph McGuicken 69 - Barclays Wealth

reGuLars6 - News76 - Motoring82 - Appointments84 - Photocall92 - Gadget Guide94 - Business Traveller95 - Travel98 - People In Business

Volume 25 No.10

OCTOBER 2013

What’s inside...

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OCTOBER 2013 3

CONTENTS

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

Ulster Business is published by GREER PUBLICATIONS, 5b Edgewater Business Park, Belfast Harbour Estate, Belfast BT3 9JQ Tel: 028 9078 3200 Fax: 028 9078 3210 Email Addresses: soniaarmstrong@greerpublications.com / symonross@greerpublications.com Website: www.ulsterbusiness.com Subscriptions: £27.50 UK per annum £37.50 outside UKDesigned & Published by: Greer Publications Design Tel: 028 9078 3200 Printed by: W&G Baird, Antrim Tel: 028 9446 3911

It is hard in some ways to think that it is only five years since the world as we know it in business finance terms was irrevocably

changed.When Lehman Brothers collapsed in

September 2008 it marked the start of a very sharp slide into recession, the death of easy credit and the failure of many businesses that were previously thought of as rock solid.

Now, in late 2013, moves to address the problem of access to finance for business seem to be gaining some traction with enquiries at Westminster and Stormont showing how seriously government is taking the issue.

But while many firms will still tell you they still can’t get finance, other stories of support for growing businesses are emerging as confidence returns and some banks become less constrained by impairments.

Our cover interviewee, Danske Bank’s Gerry Mallon, believes a turning point has been reached in the economy and is brave enough to predict

his bank will move back into profit next year.Property prices are down 50% since the peak

in 2007 and though they are unlikely to rise quickly, he notes how important it is that we are out of the deflationary spiral and people can perceive with some confidence that prices tomorrow at least won’t be lower, even if they’re only marginally higher.

In this issue we also speak exclusively to the fund managers behind the long awaited Invest NI development funds, which, it is hoped, will address the absence of venture capital investment available to companies who are beyond the start-up phase.

Of course the finance environment, like our local economy, is to a large degree influenced by external factors.

The first forecast from the new NI Centre for Economic Policy was somewhat downbeat in its outlook, agreeing that yes, the recovery is underway, but expressing concern that it could run out of steam if the private sector doesn’t get

Money talks

the support it needs to grow at a sufficient speed. To misquote Star Wars, NICEP’s report

essentially told those in government who are patting themselves on the back that their policies are working: “That’s great, kid. But don’t get cocky.”

Here at Ulster Business, we’re not in the habit of talking the economy down and we prefer to focus on the success stories coming out of Northern Ireland.

But if we are to stay on target to bring the economy up to speed – in the first instance in line with the rest of the UK – then those providing the funding for businesses must be prepared to be in it for the long haul.

OCTOBER 2013 5

EDITOR’S COMMENT

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Wondering what this strange pattern is? For those not in the know it is a Quick Response (QR) code which allows those with a Smartphone to link the experience between online and offline reading. You can easily download a free QR Reader from your chosen App store on to your Smartphone. The code to the right takes you directly to the Ulster Business website.

NEWS

6 OCTOBER 2013

BT Sport hits the mark in Northern Ireland

Take up of BT’s new television sport package has been proportionally greater in Northern Ireland than anywhere

else in the UK since its launch in the summer, according to the CEO of BT in Ireland, Colm O’Neill.

Speaking at the Digital DNA event in Titanic Belfast, Mr O’Neill said the launch of BT sport had “transformed” its business, with over one million customers already signed up in the first few months after the launch across the UK.

The launch of the sports subscription service follows BT’s £246m-a-year deal in June last year for the rights to screen 38 Barclay’s Premier League matches.

The CEO told Ulster Business that BT’s move into sport was evidence the company was looking to be disruptive in an increasingly digital world.

“I think we’re already being disruptive. I think if you look what we’ve done in TV we have a product that other companies are charging £90 a month for and we are giving it away for free. You can argue about the relative content of both but it is not £90 difference. That is changing the economic model of sport,” he said.

He said that BT also expected 4G to be a big part of its future product offering after the company bought 2.6Ghz spectrum in the recent 4G auction.

“Our approach to mobile will be a disruptive approach. I think we’re going to come out with

CUSTOM BUILT: Secretary of State Theresa Villiers MP and Enterprise Minister Arlene Foster recently joined CEO James Leckey to open James Leckey Design Ltd’s new £3m factory in Lisburn. Established in 1983 by James Leckey, the company has become a global leader in the development of postural rehabilitation equipment for children and adults with disabilities. The 80,000 sq ft state-of-the-art facility will bring all of Leckey�s research, design, production and marketing capabilities under one roof for the first time. Exporting 98% of its products outside Northern Ireland, Leckey employs over 112 people at its Ballinderry Road site with a further 18 staff located throughout the UK, Ireland and USA.

some propositions that are really interesting,” he said.

“We’ve secured 4G spectrum, 2.6Ghz spectrum, so it is reasonable to expect that in the not to distant future BT will have a network in urban and semi-urban areas that you can make calls on and do whatever you need to do on. The technology is still developing and the opportunities are not clear but we’ll certainly look to be disruptive in that space.”

BT has rolled out high speed fibre broadband to 90% of Northern Ireland and

Mr O’Neill said the region had a window of opportunity to benefit from the wide availability before the rest of the UK catches up in 2016 and Europe after that. Good dependable networks were essential for the growth of digital businesses, he added.

“Our calls business is declining, people don’t make calls on their landlines any more. What we’d say is that the way the vast majority of people connect to mobile devices is through fixed lines. So 4G will have a role to play, as will WiFi, as will fixed line broadband.”

Colm O’Neill

NEWS

OCTOBER 2013 7

ACCESS TO CABLE: Business Secretary Vince Cable has said he wants more Northern Ireland companies to avail of central government support schemes such as the £4bn Business Bank and the Start-Up Loans scheme. Mr Cable was speaking at a roundtable event to discuss how Northern Ireland businesses could secure access to finance to help them expand. The event took place at Brookvent, the Dunmurry-based manufacturer of energy-saving ventilation systems, which exports to European markets, the Baltic states and China. He said the government would announce more measures this autumn designed to help small businesses grow and create jobs. Declan Gormley, Managing Director of Brookvent, added: “A major component of our success has been a focus on innovation and R&D. It¹s the cornerstone of our business but it has only been possible because we have carefully targeted financing options to drive that growth.”

NEWS

8 OCTOBER 2013

Glen Dimplex turns up the heat with new product

The world’s largest heating manufacturer Glen Dimplex has launched a next-generation renewable heap pump which

could see 55 new jobs created in Northern Ireland.

The company said it had invested £4m over three years in the Research & Development and manufacturing of the A-Class Air Source Heat Pump – which is designed to be a replacement for boilers.

Glen Dimplex believes it is the most efficient Air Source Heat Pump available in the UK and Ireland due to its design, which maximises year-round heating system efficiency.

The product was developed in Dunleer with manufacturing set to take place in the Glen Dimplex plants in Newry and Portadown. It is hoped that the introduction of the ‘A Class’ will create an additional 55 jobs between the two factories over the next three years.

The development is the latest in a series of innovations from the company founded 40 years ago by chairman Martin Naughton and follows the launch of Glen Dimplex’s Quantum Energy System in April, a project in which the company invested £8.5m

At the launch Neil Naughton, Deputy Chairman of the Glen Dimplex, said testing had shown the product outperformed all other leading heat pumps in the market.

“The Dimplex ‘A Class’ Range has been specifically engineered to deliver optimal performance at typical UK and Irish winter temperatures. It’s not the first Air Source Heat Pump but it’s now the most efficient Air Source Heat Pump available in the UK and Ireland. The outstanding performance really sets it in a class of its own, and that’s why there’s huge potential for the ‘A Class’ and for our manufacturing plants in NI,” he said.

Neil Collins, Managing Director of Glen Dimplex Northern Ireland added: “The ‘A Class’ range of Air Source Heat Pumps is the first of its kind to be suitable for both retrofit applications and new build projects. It has been designed specifically to maximise year round heating efficiency and therefore provides lower heating costs than other air source heat pumps on the market.

“Subject to consultation, Air Source Heat Pumps will be included in the Northern Ireland ‘Renewable Heat Incentive’ from spring 2014. The ‘RHI’ rewards heat pump owners with grant support and a cash payment for every unit of renewable heat produced, further increasing the savings against oil and LPG heating systems and reducing energy bills.”

The Glen Dimplex plant in Newry is set to manufacture a minimum of 2000 units of the ‘A Class’ in 2014.

Software firm Asidua has announced a further significant local authority contract win worth up to £5m after its Customer Contact PlatformTM (CCP) was selected by Leeds City Council to help them deliver the council’s Customer Access Strategy. Following a competitive tender process, Asidua was awarded a five year contract by the Council to use CCP in delivering an enterprise Electronic Service Delivery Platform.

Irwin’s Bakery is to supply own brand bread products to Musgrave Retail Partners’ 120 independent SuperValu and Centra stores across Northern Ireland in a deal worth over £1m a year. The Portadown-based bakery will make premium white pan bread, soda farls, potato farls and pancakes under the FreshBake brand for the retail group’s stores.

Bombardier’s C-Series aircraft has successfully completed its first test flight. The CSeries aircraft wings are produced in Belfast using a patented Resin Transfer Infusion process developed by engineers here. Michael Ryan, Vice-President and General Manager of Bombardier in Belfast, said: This is an achievement of which all our employees and our supply chain should be justly proud.”

Toomebridge-based manufacturing company SDC Trailers has announced a new contract worth £600,000 with ASDA. The contract will be to supply GRP Box Van trailers. The contract is the latest in a series of new business announcements from SDC, which now turns over in excess of £100m annually, and is the first contract to be announced with ASDA.

Machinery manufacturer Edge Innovate (NI) has won business worth around £2m with a major distributor in Johannesburg in South Africa. The Dungannon company specialises in the design and manufacture of mobile machinery such as stackers, conveyors, stockpilers, shredders and trommels for recycling a wide range of materials.

University of Ulster spinout company HidInImage has secured an additional £125,000 in funding from NISPO’s Ulster Innovation Fund and a private investor. Led by Dr Joan Condell, the company emerged after a decade of research into steganography – the science of writing hidden software messages only the sender and intended recipient realise they exist.

Neil Naughton and Martin Naughton from Glen Dimplex were joined by Dick Strawbridge, TV presenter and Sustainability Expert at the launch of the ‘A Class’ air source heat pump.

OCTOBER 2013 9

NEWS

DONE DEAL: Audit and advisory firm Baker Tilly Mooney Moore and business recovery and insolvency specialists McClean & Co have merged. With four partners and 45 staff the newly enlarged practice will operate under the Baker Tilly Mooney Moore name and will be based at Baker Tilly Mooney Moore’s existing offices in Clarendon Dock, Belfast. Desmond Mooney, Chairman of Baker Tilly Mooney Moore, said: “This development is part of our strategy to grow the practice by expanding the service lines we offer and it will have considerable benefits for both firms. McClean & Co is one of Northern Ireland’s leading specialists in business recovery and insolvency, advising company directors, individuals and professional advisors on debt recovery and insolvency issues.” Pictured are John O’Rourke, Partner, Baker Tilly Mooney Moore, Anne Fitzpatrick, Partner, Baker Tilly Mooney Moore, David McClean, Partner, McClean & Co and Joanne Small, Partner, Baker Tilly Mooney Moore.

NEWS

10 OCTOBER 2013

The BIG Numbers

The amount NICVA said the government’s welfare reforms will take out of the Northern Ireland economy, equivalent to £650 a year for every working adult. That compares to an average of £470 a year across Great Britain.

£30bn

2,700

$1bn

£2

£750m

100

US call centre company Stream Global Services has announced that it is in the process of creating nearly 1,000 jobs in Belfast.

The company said that around half of the 993 jobs are already in place at a new contact centre at Airport Road West after it began recruiting last year with the approval of Invest NI.

The economic development agency has supported Stream’s investment with a package worth £3.3m and the project is expected to deliver £14m in salaries to the economy once all staff are in place.

The business process outsourcing company, which operates 55 contact centres around the world, used to employ a similar number of people in Londonderry, but closed its operation in Derry in 2011.The new jobs are being created in a business called LBM Direct Marketing which Stream bought at the start of this year.

Stream Chairman and CEO Kathy Marinello said: “Establishing this new centre is a very exciting development for our business in Northern Ireland and Europe. Invest NI has assisted us in bringing these plans to fruition. A number of locations were considered for this project, however Northern Ireland best met our needs.

“The talented people we have in Northern Ireland have already made significant contribution to our operations. This investment from both Invest NI and the Department for Employment and Learning underlines the value placed on the skills and commitment of our local workforce. We are focused on providing meaningful career opportunities for our Northern Ireland employees.”

First Minister Peter Robinson and Deputy First Minister Martin McGuinness welcomed the investment.

The First Minister said: “To have so many of these jobs already in place at this new facility is fantastic news for us. While several alternative global locations were considered by the company, the requirements of its customers combined with Northern Ireland’s attractive business environment resulted in Stream locating this new centre in East Belfast.”

The Deputy First Minister,added: “Our Business Services sector is a key driver of economic growth and securing this major investment over competitors in other regions is an important win.

“Stream’s investment here underlines our ability to meet the business needs of global companies. Its expansion is positive news for our economy and creates much needed jobs that offer flexible employment and the opportunity to develop transferrable skills.”

Stream creates almost 1,000 new jobs in Belfast

5%

The Executive said it was expecting to welcome over 100 potential foreign direct investors to Northern Ireland at its Investment Conference.

The cost of a National Lottery Lotto ticket has doubled to £2, the first rise since the lottery started in 1994. Operator Camelot said prizes would rise for rise for both jackpots and matching three numbers.

The level which the Northern Ireland Hotels Federation wants to see VAT on the hospitality industry cut to. The UK VAT rate of 20% puts Northern Ireland at a major disadvantage to the Republic’s 9% rate, said the NIHF.

The European Commission says counterfeiting and piracy could be costing the UK economy £30bn and over 14,500 UK jobs. A PwC report found Northern Ireland is the knock-off capital of the UK regions outside London with more people here admitting to buying counterfeit goods.

The number by which the claimant count in NI has fallen over the past seven months, according to August jobs data, which also showed a decline in the overall unemployment rate.

The amount that social media phenomenon Twitter is planning to raise when it makes its stock market debut, the largest listing since Facebook in 2012. Twitter also said 500 million tweets are now sent every day.

OCTOBER 2013 11

Northern Ireland’s reputation as a hotbed of innovation for capital markets technology is spreading amongst international companies, according to the CEO of

NYSE Technologies. Speaking at the Digital DNA conference in Titanic Belfast,

Robson said “key elements” of the software platform NYSE uses to deliver electronic trading solutions globally are built in Belfast. Belfast was “emerging as a centre of excellence for digital technology” and NYSE was proud to be a part of that, he added.

He later told Ulster Business that Invest NI had developed a “compelling” model for FDI and he expected more global financial companies and investment banks to consider setting up here.

“I think there is a growing understanding and there have been people building capital markets technology here for 30 years so the brand is actually pretty strong. As we bring customers here, as we bring large multinational banks through here to look at what we do, I’m sure they go home thinking, actually that’s not a bad idea for us,” he said.

“So we’re bringing not only manufacturers of capital markets capability into the region but also the consumers of that are coming to see it and you’re going to start to see banks wanting to start putting infrastructure here as well,” added Mr Robson.

“We certainly advise anyone who looks at it that our experience has been good. It’s a competitive market and, like anything in life, you’ve got to show up. I think Northern Ireland, with Invest Northern Ireland, has shown up.”

Mr Robson also said NYSE Technologies – the technology arm of NYSE Euronext, the operator of stock exchanges including the New York Stock Exchange – intends to keep growing its business in the province.

“We have grown from 60 people to just over 300 and it is a very productive facility. We use it very broadly across the business so I think yes, we are going to continue to invest in Northern Ireland and bring important work to Belfast,” he said.

“Certainly the customer demand for what we have is growing every day. Customers are demanding more and more capability and the best place for us to innovate in response to that is right here.”

Belfast’s stock is rising

To talk to us about how we might support your exporting ambitions, you can email me on ruth.graham@danskebank.co.uk or telephone 028 9004 8683

By Ruth Graham, Head of Trade and Export Finance, Danske Bank

Exports to Russia

When talking about export opportunities, it can be easy to batch countries together – for example, the BRICs, the EU, the Americas. Yet a crucial part of the export process is selecting

appropriate markets and matching a firm’s products to specific local demand. The BRIC countries, for example, represent four large and autonomous

regions where taste varies enormously. While there has been a decline in exports to China, and exports to Brazil and India remain modest, Russia has been a true success story, with sales up 20 per cent over the last year. It is important for Northern Ireland firms to move quickly to capitalise on this trend.

The Russian economy is seemingly entering into a period of modernization and diversification to ensure further growth. At the beginning of his third term in office in 2012, Russian President Vladimir Putin faced a somewhat different economic context – it wasn’t possible to rely on rising energy prices for economic prosperity and there is now an emphasis on improving the business environment – creating new opportunities for local businesses seeking to break into the market.

There are planned investments in transport infrastructure in the coming years, particularly in light of the Sochi Winter Olympic Games and the World Cup in 2018, which will necessitate bringing a large number of people to many cities that are currently difficult to access.

Another sector that offers clear opportunities for Northern Ireland businesses is agriculture. Despite highly fertile soil, agricultural production in Russia plummeted during the Soviet era and the sector needs significant investments to become more efficient, replacing machinery and infrastructure.

Ultimately, there is long-term growth potential in various Russian sectors, such as infrastructure and housing construction. Northern Ireland companies have the chance to build valuable relationships that can sustain long-term growth. In the Trade & Export Finance team at Danske Bank, we work closely with colleagues across Danske Bank to enable new and existing customers with trade finance services necessary for export – helping Northern Ireland’s emerging and established exporters enhance their business prospects.

Jon Robson (centre) with NYSE’s Claire McIntyre and Digital DNA’s Gareth Quinn.

12 OCTOBER 2013

MEET THE DIASPORA

Belfast-born Neal Beatty has worked in China and the far East for almost 20 years specialising in risk management

and security. Based in Shanghai, he is Regional Director for Global Client Services in Greater China for Control Risks and is also the Chairman of the British Chamber of Commerce in Shanghai. Control Risks is an independent, global risk consultancy that specialises in helping organisations manage political, integrity and security risks in complex and hostile environments. Fluent in Mandarin Chinese, he has a masters degree in Chinese studies from the University of Leeds and a BSc in chemistry from Warwick University.

How did you first come to be working in China? I’ve been in mainland China for ten years and before that I had almost nine years in Taiwan. I finished university in 1991 and didn’t really know what I wanted to do. I bought myself a one way ticket to Hong Kong and quickly moved on to Taiwan where I started teaching English. I enjoyed living there and after a couple of years joined the Swiss company SGS.

What does your current role at Control Risks involve?I’ve been with Control Risks for six years heading up the business development and account management team for China. The work that we do in China is mostly for multinational companies. A lot of work around pre-investment due diligence, understanding the operational landscape, issues around fraud and corruption, and also crisis management.

How do you find living in China? Work wise it is a fantastic place to be. The pace of life is extraordinary. I’m in London this week and even being in London it is a slightly slower pace than being in Shanghai! The energy of the place is great. You can get caught up in that and so people get rushed into things, they don’t apply the same processes they would back home. Some people get too carried away with the opportunities in China and forget the basics. You can be successful in China but you have to remember it is not the easiest place to do business and the risks around fraud, corruption and compliance are much higher than at home.

What should local companies consider before trying to do business in China?The number one rule is due diligence, due diligence, due diligence. You just can’t do enough. I know that is an issue for smaller companies in terms of budget but you’ve just got to take it a step at a time. You can get support from the British Consulate, UKTI, Chambers of Commerce. Utilise the networks that are established in China to help you do your homework before you take the plunge. Finding a reputable distributor is also very important. It is not always how it looks on the surface. You can fly into Shanghai or Beijing and be blown away by the infrastructure and how wonderful it all looks but it is not always that easy.

What about employing people in China?If you’re looking to hire someone to run an operation in China for you, be extra careful

about checking them out and making sure they can deliver. Don’t just hire someone and manage them remotely, you’ve got to be involved. One of the main issues we see is people working to their own plan, not the company’s plan. Trust is a big issue.

Is it essential to know the language?Outside of Shanghai and Beijing it is very important. You’ll still find people who speak English but if you are going to be out visiting factories or whatever there will be a lot of situations where English isn’t spoken.

How do you hope to help local companies as part of NI Connections?There are a handful of people from Northern Ireland who, like myself, have been here a considerable amount of time doing manufacturing or engineering. We’re happy to share that experience and talk with people who are coming to Shanghai on business.

Would many people in China have heard of Northern Ireland?Chinese people generally have heard of Ireland but often they are thinking of Ireland as a whole and they are thinking of sport. When I was home at the Titanic exhibition there were three or four Chinese tour groups there, but most people wouldn’t know Titanic was built in Belfast.

Controlling risk in mainland China

In the second of our profiles of members of the Northern Irish diaspora, China-based Neal Beatty talks to Ulster Business about his role advising organisations on the risks of operating in Asia.

“Some people get too carried away with the opportunitieS in china and forget the baSicS.”

14 OCTOBER 2013

Danske Bank CEO Gerry Mallon is hopeful that when we look back at the summer of 2013 it will be seen as the point when things started to take a turn for the better in the economy.

COVER STORY

Gettingback to

Black

15 OCTOBER 2013

COVER STORY

Danske Bank in Northern Ireland will return to profitability a year earlier than expected if current economic

and market trends continue, according to the bank’s CEO Gerry Mallon.

The bank has previously given guidance that it expected to narrow its losses in 2013 and 2014 before returning to profit in its 2015 annual results.

But now, having registered a modest profit in its second quarter and with a number of economic indicators also pointing towards the early stages of recovery, that forecast may have to be revised.

“In our five year plan we expected 2013 to be a loss-making year, 2014 to be close to a break-even year and 2015 to be a return to a reasonable amount of profitability. At the moment it looks like we are about 12 months ahead of that,” Mr Mallon told Ulster Business.

“We see an improvement in the underlying health of the business. It looks like the level of impaired loans is moving in the right direction. Impairments have a habit of not happening in a linear way, a lot of it is driven by business failures, but we feel we have got so deep into the portfolio that we have brought out all the risks and made appropriate levels of provision for them,” he added.

Unemployment figures, GDP data, consumer confidence indices and house price surveys have recently been encouraging and the CEO is hopeful that a corner has been turned in the economy.

That has been reflected in the bank’s results. In the second quarter of the year Danske saw a small profit of £0.2m and impaired loans were substantially lower at £28m in the first half of the year compared to £99m in the same period a year earlier. Though property prices are down 50% from the peak, activity has returned to the mortgage market.

And perhaps most encouragingly business lending – which has been hit by impaired loans disappearing off the books

and companies de-leveraging – has stopped shrinking.

“Having shrunk by double digit percentages in the last two years, we are approximately flat in terms of our business lending this year. That might not sound spectacular but it actually represents quite a big turnaround from the trend of the past few years. That’s down to new customer acquisition, but it is also being driven by us starting to see some appetite for investment among our existing customer base,” explained Mallon.

“It’s still early days and it is still very fragile but it is nice to see a positive inflection. The mood feels considerably different this side of the summer than it did even as recently as the spring time. All the economic indicators both nationally and locally are pointing in the right direction.”

Danske grew market share last year from 29% to 33% in business banking and the CEO says he’d be “disappointed if we didn’t grow it further this year”.

“Of the Ulster Business Top 100 companies we now have over 50 of those as customers, so I think it is easy to say, without being challenged, that we are the number one business bank,” he said.

“The key now is to see the bottom line benefit from that. We require our customers to grow in order for us to grow.”

The businesses the bank has been lending to have come from a diverse range of sectors, from medical practices to local retailers, farmers to service companies, he says.

“The recovery will start with the largest companies and it will start with the exporters,” added Mallon. “Norbrook for example, which has recently moved to us, is a company very much at the leading edge of businesses in Northern Ireland, which is exporting globally and which can see benefits in our capability to support their growth.”

INCREASED SCRUTINYUlster Business meets Mr Mallon, coincidentally, on the day the Northern Ireland

Affairs Committee at Westminster is holding the first day of its inquiry into banking practices in Northern Ireland.

The industry is being put under the spotlight to see if private and business customers in Northern Ireland are at a disadvantage to those in Great Britain and MPs will investigate access to finance, the governance of banks, the effectiveness of national initiatives and how the lack of available regional data has an impact.

Mallon points out that Danske – despite being Danish-owned – is the only bank in the market that publishes full accounts for Northern Ireland.

“As far as I’m concerned I’m happy to disclose anything and everything on the outcome of our lending if we can match that at an industry level. I perceive some of the institutions have a real technical difficulty in being able to carve out that data because they’re not structured that way,” he said.

“On the other hand, what is it going to tell you? It will tell you that bank balance sheets have reduced. That’s not an amazing revelation. The question is what you infer from that. I think some people want that information to blame the banks for not lending but the truth is, for us, that people haven’t wanted to borrow.”

Danske has submitted evidence to the inquiry citing reports from before the 2007 financial crisis and the more recent report by the Economic Advisory Group – on which Mallon sits – which concluded that businesses in Northern Ireland access finance on roughly the same terms as GB.

If we are to blame the banks for anything, he believes it should be for historically being too keen to lend in more competitive times, leading to over-leveraging and the property bubble.

Mallon thinks the inquiry may be useful to determine if there’s a lack of appetite to support certain niche sectors, such as IT, in the local banking sector. Otherwise he believes the lack of business lending comes down to confidence.

“It is all about lack of demand rather than a lack of supply. If you look at our capital position it is strong, if you look at our liquidity position, we are over liquid, we need to lend money. We’ve been out there knocking on doors to take business off the competition and increase market share,” he said.

In fact Danske has 20% more deposits than loans on its balance sheet – a surplus of £1bn – compared with 20% more loans than deposits before the financial crisis, meaning it is not reliant on wholesale funding and doesn’t currently need to avail of government schemes such as Funding for Lending. >>>

“The mood feels considerably differenT This side of The summer Than iT did even as recenTly as The spring Time.”

countries. It puts us in a fortunate position in terms of staying ahead of the competition,” he said.

“The uptake has been phenomenal. The growth in mobile access in business overtook online access to accounts within a few months of the launch of our app. We were the first of the Danske Bank countries to see that happen and now it has happened in all of them. The growth in mobile business is so explosive it is hard to know where it is going to go but the convenience of it is amazing.”

Mallon says feedback shows customers have also been receptive to the transition to the “progressive and international” Danske brand, with very few grumbles about the 200-year-old Northern Bank name being replaced.

With that transition now bedded in, the focus is very much on the future, with 2014 on course to be a good year.

“A lot will be driven by the macro situation in Europe, in the UK and in Ireland. If we get a rising tide it will lift all boats and there is a possibility of a very strong recovery. We’ve positioned ourselves to catch the wave.”

16 OCTOBER 2013

COVER STORY

Looking out from Mr Mallon’s corner office on the top floor of Danske’s headquarters on Donegall Square, it is possible to see the head offices of some of the bank’s main rivals.

Mallon doesn’t want to get drawn into how healthy or otherwise some of them are, but reiterates his belief that Danske is among the best placed to quickly meet demand from any recovery, having taken the hit on impaired loans early.

“What’s the old saying in banking, a rolling loan gathers no loss. I’m sure for some institutions there’s a temptation if you don’t have the capital strength to absorb the loss, to not take the loss. We’ve always had the view that we have the capital strength to absorb the losses so let’s get it out of the way,” he said.

NEW TECHNOLOGYOne other issue being covered in the Westminster banking inquiry is the rapid reduction in bank branches across Northern Ireland.

By the end of this year Danske will have 53 branches – down 50% on 2007 numbers – which Mallon says is simply a reaction to how many people use them.

“There has been a huge amount of attention on branch closures but for the most part there have been very few complaints from customers. When it becomes clear customers aren’t using a branch as much as they used to that’s when you review its usage. It is about adjusting the network to deliver the needs of the customer,” he said.

The bank is instead investing in online

technology and the branches that are used to make sure they are “best in class”.

“The way I see it going, and this is something which we’re adapting to, is that the branch moves from what it was 20 years ago – the post office model of lots of low value frequent transactions – to being much more like a car dealership where transactions are less frequent but more complex and requiring expert advice. There are fewer of them but they are worth going to,” explained the CEO.

Danske was the first bank in Northern Ireland to launch a business app and the first in the UK to launch its tablet app – something Mallon puts down to being part of a group headquartered in a more tech savvy region.

“We’re organised in business unit lines so instead of us in Northern Ireland being at the end of the queue of countries who have these things rolled out in a sequence we’ve got these technological deliveries at the same time as the rest of the Group.

“You’re talking about markets that are really sophisticated and very online orientated and Danske as a bank is at the leading edge in those

“As fAr As I’m concerned I’m hAppy to dIsclose AnythIng And everythIng on the outcome of our lendIng If we cAn mAtch thAt At An Industry level.”

18 OCTOBER 2013

INNOVATION

A Queen’s University Belfast team which is developing a range of novel medical diagnostic tests has been chosen as the

overall winner of this year’s NISP CONNECT 25k Awards.

The annual awards, sponsored by Bank of Ireland, are made under the NISP CONNECT entrepreneurship programme, which is based at the Northern Ireland Science Park in Belfast’s Titanic Quarter.

ProAx-SiS have incorporated their patented “Protease-TagTM” technology into a range of easy to use home tests, which will work similar to a conventional pregnancy test to enable patients with chronic diseases to be monitored within the home.

In the first instance, their focus is on respiratory diseases such as cystic fibrosis

and chronic obstructive pulmonary disease (COPD) – the collective name for lung diseases including chronic bronchitis and emphysema. In these diseases, a protease (enzyme) biomarker can provide an early warning of an acute exacerbation that would normally require hospitalisation. Their test, NEATStikTM, which is a first to market product, with no competition, will prompt early treatment at home reducing the need for a hospital admission and more expensive, invasive treatment.

Dr Lorraine Martin, the founder of the company, said the company planned to initially use the £10,000 top prize and £3,000 from winning the Bio Tech category of the awards to develop its website, to access other funding and to raise the profile of the ProAx-SiS brand.

Dr Martin told Ulster Business the fledgling

business will next month go before the board of Queen’s spinout body QUBIS Ltd., to be formally instigated as a QUBIS company with additional external investment.

“We’re working towards a three year plan. It will take us another nine months to have the device optimised to move into clinical trials. We are hoping to conduct a one year trial to test the device and really prove its utility in the home and clinic in terms of improvements to patient health and outcome,” said Dr Martin.

“Things started to move very quickly in the last 18 months when we got a Medical Research Council Confidence in Concept award and then we also got financial support from the Cystic Fibrosis Foundation (CFF) in the US. That’s been a fantastic endorsement for us.”

Having first received a Proof of Concept

Kelly Moffit (left) and Lorraine Martin (right) of ProAx-SiS, Queen’s University Belfast, pictured with Julie-Ann O’Hare of main sponsor Bank of Ireland, after being named the overall winner at the NISP CONNECT 25k Awards 2013.

Winner of NISP’s 25k Awards ProAx-SiS has big ambitions

Companies in the creative industries must take a 360 degree approach to launching their brands and consider

partners in different media in order to succeed in today’s fast moving market.

That will be the key message that international speaker Eric Huang will deliver when he speaks at the Arts Council’s Creative Industries “Thrive” event at the Lyric Theatre on October 15.

Currently development director of digital agency Made in Me, Huang worked with Northern Ireland companies in his previous role as new business director at publisher Pengiun. He plans to use Derry-based children’s media company Dog Ears as a case study of a successful partnership between a publisher and animation company. It was announced last month that Dog Ears’s new animated TV series Puffin Rock has been signed up by broadcasters Nick Jr and RTE Jnr.

“I’ll be giving examples of how formerly very distinct industries like film and publishing and gaming are now merging and a lot of media companies now think about the brand – not just the TV, not just the book, about everything. It is a 360 approach to launching a brand,” Huang told Ulster Business.

“If something like Puffin Rock had appeared five years ago I don’t think we at Penguin would have got on board in the same way as we did, we would have waited until the TV was out, looked at the ratings and then said let’s do a publishing deal but instead we invested in the TV before there was any deal because we loved it and wanted to be more of a part of it than just a publishing partner,” he added.

“About two or three years ago my focus was all about digital, digital, digital and now I think it is more about brand. The focus isn’t on digital versus physical, it is on the brand first and how you tell that story, whether it be through TV, books or apps.”

Huang believes more creative digital businesses could get their ideas off the ground by approaching partners with commercial deals early in the process.

“Publishing houses like Random House and Pengiun or broadcasters like Nickelodeon now see apps and digital products as viable. Toy companies like Mattel and Hasbro who a few years ago might have been more risk averse are now interested. There is more money if you find the right partner,” he said.

Huang believes there’s strong talent in

OCTOBER 2013 19

INNOVATION

Time for the creative sector to THRIVE

Northern Ireland and the island of Ireland which can now be recognised as self publishing to App stores is so easy.

“Being able to reach a global audience by self publishing on to the app stores is really powerful. Whereas before you maybe had to have four or five partners in order to put together something really huge or who had distribution, you can now go direct, which is a great opportunity for regions like Northern Ireland.”

‘Thrive’ will celebrate the success of Northern Ireland’s Creative Industries and showcase the work of some of the creative companies supported by the £4.5m DCAL/Arts Council Creative Industries Innovations Fund (CIIF) including Airpos Ltd, Abigail Ryan homewares, Sixteen South and Jude Cassidy Textiles.

CIIF, which can give creative businesses up to £10,000 of support, has funded 150 projects and will open the funding round for 50 further projects in January.

grant from Invest NI in 2008 it has been a long journey for Dr Martin and her co-founder Professor Brian Walker, whose research had focused on Protease Tags for many years before entering the commercialisation process and forming ProAx-SiS.

Professor Walker commented: “I am delighted that the 25K award will act as a springboard for the realisation of the translational element of our research, with the ultimate goal of improving patient outcomes.”

Dr Martin is hopeful the CFF will also help the company navigate the regulatory process required by the FDA in the US.

After initially launching in the UK for cystic fibrosis followed by the US and Europe markets, the company plans to very quickly move into the potentially more lucrative market for COPD (Chronic Obstructive Pulmonary Disease).

“That market potentially for our product could be worth about $6bn and if you include China the market nearly doubles,” explained Dr Martin.

“We aim to launch for cystic fibrosis in the UK in year four and gain about 20% of the market, which would bring a profit of around £1m. That could expand to £30m in year five if we enter the COPD market,” she added.

“In year five we want to then expand to launch in the EU and US in cystic fibrosis clinics. Because the same clinicians who are looking after CF patients are also looking after COPD patients, we don’t think it is too big an extrapolation to say we’ll get 10% of the UK COPD market by year five.”

ProAx-SiS’s victory in the 25K awards is the first for a biotech company and was apt on a night when the main speaker was Dr Peter Fitzgerald, founder of Randox Laboratories. Dr Martin said she would be interested in having a discussion with Randox to see if there are potential synergies with its biochip technology.

She believes that having decided to go into the multi-billion dollar diagnostics and point of care market, the company will also prove attractive to investors.

“Investors can be afraid of biotech. We’re so excited to get a win for biotech at the 25K awards, it has been a long time in coming. Our product has a long lead time and a lot of regulation and validation processes to go through. But it is potentially a huge market.”

Although concentrating initially on developing diagnostic tools for the clinical management of patients with respiratory diseases, ProAx-SiS also plans to develop a portfolio of similar tests suitable for use in the cardiovascular, infection and oncology areas.

Queen’s University companies ADFerTech and Liopa emerged victorious in the Clean Tech and Software award categories respectively, while University of Ulster-based Eye-C-3D won the Hi-Tech category of the 25k Awards.

Other finalists on the night included: Jenarron Therapeutics (UU); Digitease (UU), Inkintelligent (QUB), Columbus (QUB), Xpress LF (QUB), Nite Rider (UU).

The company behind one of the most iconic products produced in Northern Ireland is looking to widen its markets

even further this year, according to its new Managing Director.

Hairbrush manufacturer Denman International Ltd, which already exports to over 50 countries, is aiming to break into potentially lucrative regions such as South America and the Middle East this year, while also continuing to grow sales in its core UK and US markets, said Philip Steele.

Steele, who has been with the business for 23 years, recently took over the day-to-day running of Denman International from John Rainey, Chairman and owner of the Bangor-based Denroy Group of companies, which employs 180 people.

His aim is to build on Denman’s success and continue the growth it has managed to achieve through the recession.

“The last two or three trading years have been very strong. Our UK retail business is up, our export business is up, our professional business is like-for-like. We seem to do better when there is a recession on. When times are slow we benefit from the so-called “lipstick effect”, where women cut down on big ticket items but they still like to treat themselves to a smaller product that will make them feel good,” he explained.

“Our exports are up 25% year to date, so we’re also doing extremely well there. A large part of that is America, which is flying at the moment.”

Denman’s business is evenly split between the UK professional salon market, UK retailers such as Boots and Sainsbury’s and exports to other countries.

Its biggest international market is the US – where it has had a wholly owned subsidiary, Denman Inc, for nearly 25 years – followed by Japan, Germany, South Africa and Australia. Steele wants to extend that export business further.

“We’re actively starting to look at South America and we have just found a distributor in Brazil. We’re also working very hard in conjunction with Invest NI to identify partners in the Middle East because we feel we could be doing better there. We also haven’t really cracked China. We’ve been in and out of China via Hong Kong and we’d like to do something

in China in the future. Russia would also be a newer market that has started to take off in the last couple of years,” he said.

The business is this year celebrating its 75th anniversary and Steele puts its longevity down to the quality of its products and its reputation as “the hairdressers’ hairbrush”.

It will underline that reputation as the premier sponsor of the Alternative Hair Show at the Royal Albert Hall this month, which attracts an international audience of 5000 hair stylists.

“Ask any hairdresser about Denman they will normally say good things. We have a reputation for quality and performance,” said Philip.

“We are at heart an engineering and plastics company. We’re used to making industrial mouldings products and have always used the best grade plastics or materials suitable for hairbrushes. That makes them very hard wearing. We’ve always worked with hairdressers on product development since our origins. Jack Dean, the guy who invented the brush, worked with everyone from Vidal Sassoon onwards.”

Denman showing it can still cut it

The focus on the quality of its products, good service and consistent supply from within the UK has helped Denman secure breakthrough orders from some major US players and seen several large UK retailers come back to Denman in the last year, said Steele.

“Superdrug have come back to us, Tesco have come back to us and we’ve got the biggest range we’ve ever had in Boots. We think part of that is they are being let down by suppliers from the Far East – either costs have gone up or more likely supply has been interrupted, leaving them with empty pegs. We make 80% of our own products here in Bangor. So if we get a phone call from Boots on a Monday morning we can get a 40ft container to them on Friday, whereas in China you are talking three to four months door to door. So we’ve benefited from the Far East not being so competitive,” said Steele.

“At one level you can say we don’t compete on price. We are a mid-price brush in Boots. We are the BMW not the Bentley. In export markets we’re positioned as a more premium product. But we always offer value for money.”

20 OCTOBER 2013

MADE IN NORTHERN IRELAND

Hairbrush brand Denman is known the world over and the Bangor-based firm plans to extend its global reach.

Philip Steele

From government departments to companies and consumers, fraud now costs the UK around £80bn a year. And

with the cost of cyber security breaches having almost tripled over the past 12 months, the UK’s larger companies can now expect an almost daily attack on their computer systems. In addition, many organisations must now ensure compliance within a significantly more onerous and robust regulatory environment.

These are just some examples of the market environment which has led to an exponential growth in the number of people working within the discipline now described as ‘forensic

accounting’. That said, I constantly have to explain that the people in the PwC Forensic team I lead in Belfast are a truly eclectic group, both in terms of the team’s range of skills and experience and the diverse range of services and support we provide to clients.

The shifting dynamic of forensics means being just a bunch of specialist accountants is not enough. While I followed the traditional route – completing a first class honours degree in Accounting at the University of Ulster followed by a Diploma in Accounting and a three year training contract with PwC – that tradition is not reflected in our team. PwC’s 120 strong group of forensic experts ranges from accountants, lawyers, criminologists, and forensic computing experts, to financial investigators, researchers, linguists, compliance and regulatory specialists.

We work with a wide range of organisations ranging from local companies and the public sector, to multinational corporations and national governments – and all delivered from Belfast. Increasingly much of our work relates to the non-financial aspects of investigations and regulatory matters and involves clients from around the world and on occasion travel to some exotic and not so exotic destinations.

We have developed globally recognised centres of excellence which have given us the opportunity to scale the team, creating employment and career opportunities while building skills, experience and gaining unique

Ian McConnell, leader ofPwC’s Forensic team inBelfast, explains what hisjob entails in the latest“Ulster Business School –Leaders In Business” alumni profile series.

insight which bring global best practice back home for the benefit of our local clients. Indeed the most rewarding aspect of my job is having the opportunity to support and see really talented people achieve and build rewarding careers. The fact that they are almost all younger that I am also keeps me feeling young.

My time at University of Ulster and specifically within the Ulster Business School not only gave me a grounding in accounting but more importantly an introduction to business and commercial life in general. Collectively, that has helped me immensely in my efforts to help contribute to the growth of the Forensic and wider PwC business in Belfast.

Having the opportunity to give something back to the University and to the current and future crop of undergraduates it therefore hugely important to me. That’s why I was delighted to be asked to join the Ulster Business School as Visiting Professor where I had already worked with the Accounting Department to develop a Forensic Accounting module.

As a Visiting Professor I can help influence the shape of the Business School’s education programmes to ensure that graduates’ qualifications reflect industry demand and that students understand the market and opportunities both locally and beyond, including the unique demands of the forensic accounting discipline.

And that, for all of us, is an investment in the future.

22 OCTOBER 2013

PROFILE

Going into forensic detail

Professor Ian McConnell,Forensic Services Partner at PwC;BA Accounting and Visiting Professor at the Ulster Business School

Food, Drink & Agriculture

24 OCTOBER 2013

FOOD, DRINK & AGRICULTURE

Ulster Business meets Seamus Carr, the CEO of Karro Food Group, which has major plans for expansion of the Cookstown pork business it bought earlier this year.

The company behind one of Northern Ireland’s best known food brands – Cookstown sausages – is set to increase

production at its mid-Ulster site, creating hundreds of new jobs.

Seamus Carr, Managing Director of the brand’s owner Karro Food Group, said plans were under way to expand its facility in Co. Tyrone to increase the number of pigs slaughtered from just over 22,000 to 30,000.

The pork processor’s ramp up in production is expected to take place over the next three years and could see its workforce rise from just over 700 people to around 1,000, said Mr Carr.

“We have major ambitions to grow the Cookstown facility. To ramp it up to 30,000 pigs we will have to invest £10m and that project is under way at the moment,” he said.

“We are hopeful that recent initiatives through the Agri-Food Board and funding from government to increase primary supply will be a route to accelerate those developments,” he added.

“The growth will be about the ability to access funding and planning to put that primary infrastructure into Northern Ireland.”

As head of the Karro management team,

working with investors Endless LLP, Carr led a successful management buy-out of Dutch company Vion Foods’ UK pork division earlier this year, forming Karro Food Group. The group, headquartered in Yorkshire, encompasses

nine sites which incorporates pig farms, pig slaughter and processing.

As well as the famous Cookstown sausages, the group processes fresh pork, bacon and gammon, cooked meats and frozen burgers

Seamus Carr (second left) and the Karro board.

Cookstown brandall set to sizzle

OCTOBER 2013 25

FOOD, DRINK & AGRICULTURE

The 2013 UK Great Taste Awards saw a raft of food and drink companies from Northern Ireland pick up plaudits.

Four Northern Ireland foods reached the final 15 considered by the judges for the Supreme Champion Title – Hannan Meats, Moira, En Place Foods (UK), Cookstown which had two listed, and McCartney’s Butchers, Moira.

A handful of companies won a 3-star award for their products:

the only facility is Northern Ireland that is US Department of Agriculture approved. The plant is also approved to export to China by the NI Department of Agriculture and we’re putting a lot of effort into getting approval from the Chinese authorities”.

In the US the best-selling products are, perhaps unsurprisingly, ribs, but Karro is widening its portfolio there. Exports to China will involve pigs heads and trotters, but there too Carr is expecting a wide range of orders.

“China would have historically been offal type products that we don’t tend to consume here like heads and bones, however, because of the greater wealth and urbanisation, they are going up the protein chain and a wider range of products will be bought by these countries,” he said.

Investment in the Cookstown plant has already begun in preparation for the expansion, with a further £3m invested in a state-of-the-art stunning facility believed to be more humane than other methods. Leading edge technology developed by Vion backed by Invest NI will also soon be deployed in Cookstown.

The company, like all other meat producers, is putting a renewed focus on ensuring the security of its supply chain in the wake of the “horse-gate” scandal. While he says Karro’s procedures are “very robust” Carr also says it takes no chances, noting that the company got caught up in the 2008 dioxin issue because of “someone in the supply chain doing something they shouldn’t be doing”.

“It is a big challenge. From a Karro perspective we see it as an advantage because in Cookstown, we only handle our own kill. It is bought from known farmers into the plant – it is a closed supply chain so we can give our customers a greater surety on that,” he said.

“In light of horsegate everyone has had to re-evaluate their supply chains. Our procedures would have been very robust anyway but where you buy in materials external to your own farmer suppliers as we do in Malta and Holland, you are always open to risks, so you have to keep a constant focus on it.”

The company has its own pig farms in Scotland but brings in around 12,000 a week from trusted pig farmers in Northern Ireland and 10,000 a week from the South. Carr said it is planning to increase the number of pigs reared on its own farms from just below 10% to 20% in the next few years.

With over 20 years experience in the Agri-Food industry working in senior roles for the likes of Unipork and Glanbia, Carr says he is glad to see the renewed focus on developing the sector as a major driver of employment and the economy.

He believes there are strong career opportunities for young people in the sector with numerous paths for development.

“If you’re going to take on these export markets you have to make sure you meet very stringent quality standards, packing standards, so the concept of an unskilled operative is alien to me. They all have to be skilled at the job they do,” he said.

Great Taste of Northern Ireland

and sausages in the retail, foodservice and food manufacturing sectors. It employs over 3,000 employees and has a turnover in excess of £550m.

The company supplies all of Tesco and Asda’s pork products in Northern Ireland as well as Henderson Group and Dunnes in the Republic of Ireland. It also runs the McGhee’s butcher concession in Asda, employing 90 people.

Carr, who first worked at Cookstown in the mid-1990s under one of the firm’s previous owners, says the plant is at the centre of its future growth plans in the UK, Ireland and further afield.

“Cookstown is the core of Karro. It is not regional, it is very important,” he said.

“Cookstown when I first went there in the mid-1990s was killing 6,000 pigs. Today Cookstown is killing 22,000 pigs a week, over half the group’s throughput. It is a very substantial business which will have turnover of £175m and employs over 700 people, so it is a very big business in Northern Ireland and a major employer in that Cookstown and Tyrone area,” he added.

“Our major focus out of Cookstown now is export driven. The facility in Cookstown is

Ewing Seafoods from Belfast also took home a 3-star award for its Traditionally Pale Smoked Cod Loins.

McCartney’s Butchers from Moira was listed for its 3-star Mushroom, Leek and Smoked Garlic Tart.

The Golden Fork for Ambient Product of the Year was presented to En Place Foods for its 3-star Sea Salted Caramel with Fennel Pollen.

sizzle Hannan Meats was awarded the Golden Fork for Best Speciality for its 3-star Salt-Aged Rack of Glenarm Shorthorn Beef.

The media now seem to have moved away from reporting on shop closures, job losses and the property crash, and are now apparently more comfortable in running lead stories on green shoots,

sustained (whilst fragile) recovery and increased consumer confidence. Northern Ireland businesses do appear to be showing some signs of much longed for growth and return to profitability.

Making profits does however mean paying tax – but there are many ways, through using the right recipe and the best ingredients to ensure that your tax cake is palatable.

The righT mixIt’s not always easily getting the product right first time round. Whether it has had too long in the oven, is not well enough mixed, not properly seasoned or quite simply a flop – keep track of your time and your costs. Research and development is one of the best (and most flexible) forms of tax credits available against your corporation tax bill. For those operating in the agri-food sector, it should be right up your street in helping to reduce tax with tax deductions of up to £1,250 for every £1,000 spent. For small and medium sized companies, these tax credits can result in real cash coming into your bank.

The besT ToolsHaving an effective operation, particularly in the food manufacturing sector, means having the right equipment. Generous first-year capital allowances (annual investment allowance) of up to £250,000 when purchasing plant and machinery remain available until December 2014. All the signs are that the rate will return to its low base of £25,000 at the end of next year. So if you need new equipment, plan ahead now and ensure it falls within the relevant timelines to make the most of the relief. New equipment may also mean increased efficiency and greater return for the business as a whole. For a business generating profits of £300k per annum, the additional relief available through the AIA will mean an actual tax saving of £50k.

Frame iTIf you’ve found perfection, be sure to frame it. With the new 10% patent box regime in place in Northern Ireland from April of this year, you want to make sure that you are maximising your opportunity for paying tax at 10%. Even though the regime is only six months in place, many local businesses in the agri-food sector are looking at how they can cut their tax bill by 50% and more through patenting their product ranges.

PuTTing iT all TogeTherThe structure of the business and the manner in which you are drawing your remuneration will impact on your tax bill. The introduction of the 50% income tax bracket (45% from April 2013) shone the spotlight again on the limited company as a preferred option with the possibilities of paying tax at the much lower rate of 20%. There are many factors to consider when looking at incorporating your business – but it may well be a more tax efficient vehicle, depending upon your individual personal circumstances and living requirements.

learn From The exPerTsRegardless of whether you are inspired by Delia, Neven, Jamie or Nigella,

The return of Mary Berry and Paul Hollywood to our TV screens is a pleasant reminder of the renaissance of home baking across the country. In this article, Claire McElduff, Manager of Cavanagh Kelly’s Omagh office, shares with us her recipes for keeping your tax bill from rising too high.

Cooking the Books

26 OCTOBER 2013

FOOD, DRINK & AGRICULTURE

Claire McElduff is Audit & Business Advisory Manager and can be contacted on028 8224 4339 or by emailing Claire.McElduff@cavanaghkelly.com

“If you mIss the wIndow and don’t plan ahead, then the chances are you wIll overpay.”having the right expert to guide you can often make all the difference. By consulting regularly with your tax advisor, you should have sufficient time to plan your spending and manage your tax bill; and that way make sure you have no unpleasant surprises when the books are cooked!

CheCk iT regularlyThe most valuable piece of advice is to keep rein on your tax affairs and understand ahead of the end of your financial year those options which are available to you to pay less tax. If you miss the window and don’t plan ahead, then the chances are you will overpay and feel somewhat burnt by the whole experience.

FOOD, DRINK & AGRICULTURE

28 OCTOBER 2013

Chefs back upcoming Food & Drink Show NISome of the top chefs in the

UK and Ireland will be in Belfast later this month

at a major new food and drink event for Northern Ireland which is aimed at both consumers and producers.

The Food & Drink Show NI is the brainchild of Linda Beers, Managing Director of Belfast-based Inform Communications.

Taking place at the King’s Hall Pavilion in Belfast, the show will feature a celebrity chef theatre, an open kitchen, a special area to promote artisan food producers and dozens of food and drink exhibitors.

Over the past year Linda has expanded Inform, one of Northern Ireland’s best known PR and public affairs companies of 29 years standing, to include event management and digital communications expertise. The Food & Drink Show NI is an offshoot of the restructured consultancy.

The businesswoman first thought of the show concept around five years ago, but the onset of the recession hampered her initial plans to run the event.

However, with the economic climate improving and with the Northern Ireland food and drink sector more buoyant than ever, she now feels the time is right to do it.

She said: “In Northern Ireland we love our food and drink. While many areas of domestic expenditure have come under pressure in recent years, the household spend on food and drink continues to be robust.

“Of course it’s not just the eating and drinking that we enjoy. Television and radio programmes, newspapers, magazines and social media channels - they are full of news, features and views about food and drink.

“Food provenance, food miles and food waste are never far from the headlines, let alone the hours of programming and acres

of newsprint dedicated to the ‘how to’ of cooking, baking and entertaining.”

The Food and Drink Show NI will be the first large scale indoor consumer event of its kind to be staged locally. It will offer visitors a delicious mix of great produce, celebrity guests and live demonstrations.

“For businesses that sell quality food, drink and related lifestyle products to the domestic consumer it will provide an unrivalled opportunity to promote and sell their products to their target end user,” added Linda.

The event has attracted sponsorship from some of the biggest food and drink companies in Northern Ireland, including Moy Park, Tesco and JN Wine.

The Moy Park Celebrity Chef Theatre will be one of the main highlights of the show. James Martin, one of the UK’s best loved celebrity TV chefs, will be there, as will baker Paul Hollywood, the star of The Great British Bake Off. Other top chefs who will be attending include Nick Nairn, the Scottish restaurateur turned celebrity TV chef, and leading Irish chefs Rachel Allen and Neven Maguire.

Ulster chefs Paul Rankin and Jenny Bristow will be doing their thing in the Celebrity Chef Theatre, too. And Jane Boyce, Master of Wine at Co Down company JN Wine, will be recommending wines to complement the dishes created there.

Jenny Bristow said: “We have fantastic produce locally and I’ll

be spoilt for choice when it comes to choosing what I will cook in my demonstrations. I know that providing a platform for Northern Ireland’s artisan food and drink producers is a key element of the show and I will certainly be highlighting some of our specialist growers and producers.”

In addition leading local food and drink experts, including representatives from some of the show’s exhibitors, will take to the Love Food Hate Waste Open Kitchen stage, sponsored by the Department of the Environment’s Rethink Waste campaign, to share their knowledge of products, produce and techniques.

For further information visit www.thefoodanddrinkshowni.com

Linda Beers first thought up the concept for the show five years ago.

“While many areas of domestic expenditure have come under pressure in recent years, the household spend on food and drink continues to be robust.”

30 OCTOBER 2013

FOOD, DRINK & AGRICULTURE

It would have been easy for drinks company Diageo NI to batten down the hatches and try to ride out a recession that has squeezed consumer spending and heaped pressure on the

hospitality sector.Instead, the company adopted a strategy that is centred on using

innovation to respond to emerging trends in the economy with new products, new promotions and new pricing.

Part of global business Diageo plc, its portfolio of world-famous brands includes Guinness, Smirnoff vodka, Baileys, Bushmills Whiskey and Johnnie Walker Whisky.

David Higgins (pictured) is Take Home Channel Manager for Diageo NI, with responsibility for wholesale customers, multiple retailers and independent off licences.

He explains that the company decided to step back from the doom and gloom and examine the ways it connects with its consumers.

“Recession has fundamentally changed how people behave and their attitude towards brands and purchasing in general. By understanding those changes we start to understand what we and

Northern Ireland’s largest drinks company, Diageo NI, has responded to shifting market trends by investing in new products, packaging and promotional strategies.

Innovation to meet changing

customer needs

OCTOBER 2013 31

FOOD, DRINK & AGRICULTURE

consumers. We’ve got new offers coming out for Christmas and then next year we’ll add to the range,” said David.

A BIT OF LUXURYDiageo is also currently rolling out an innovative new product called Bailey’s Chocolat Luxe, which is specifically designed to appeal to women.

The drink represents the first time that real Belgian chocolate has been fused with alcohol and is a premium product that comes at a premium price in a smaller 50cl bottle.

Created by Anthony Wilson, principal scientist and son of one of Baileys Original Irish Cream’s creators Steve Wilson, the innovation has been three years in the making and Diageo is confident that by bringing together two of the world’s favourite indulgences it will do well. Bailey’s is largely consumed by women but this is the first time Diageo has created a product specifically for women and tested it with them in mind. In tests 91% considered it a perfect gift for their friends, 70% said they’d definitely buy it and 74% said they loved the taste of it.

“Even in a recession consumers want premium experiences, they want affordable luxury and women are an untapped economic force. We’re aligning ourselves with that opportunity with the new product,” said Higgins.

“Our customers need ways to grow but also ways to grow their margins. What we’re introducing through our innovation are margin enhancing products for the trade.”

NEW TRENDSWhile there’s palpable excitement about Baileys new breakthrough product, the beer drinking man in the pub has not been forgotten about either.

With an emerging optimism in the economy, Diageo is also launching new promotional campaigns for its core beer brands, Harp, Smithwick’s and Guinness.

In Harp’s case the company wants to reconnect the local brand with existing and new customers.

“We’ve taken the decision to invest significantly in Harp in the next few years. We’re investing in the livery on taps in pubs and in the take home trade we’ve introduced new livery and packaging. We’ll be going on TV with Harp for the first time in several years,” said David.

“We have consumers who love Harp and will always buy it. But there are a whole generation

our customers can do to grow,” he said.For example in the take home trade Diageo

has launched Price Mark packs for Smirnoff – bottles with recommended retail prices on them. It is not a practice common with spirits but trials have shown a very positive response: 86% of consumers trusted price mark packs over shelf prices, 70% saw the price as a promotion and there was a 69% increase in real sales in off licences.

David explained: “When people are squeezed they look for value. Being a savvy shopper is like a badge of honour for consumers at the moment, they are proud of getting a good deal. But they don’t want to compromise. They want to believe they have got value for money.

“In retail, consumers are looking for great brands and good value. The challenge we have is to demonstrate we are great value for money. It is not just about price it is about demonstrating the brand is worth it. So in the recession we have continued to invest in our brands, keeping them relevant and aspirational.”

NEW PRODUCTSAs well as investing in new promotional strategies, Diageo has also launched new products and brand extensions.

The recent innovations include Bushmills Honey, a twist on the best-selling whiskey, Baileys Chocolat Luxe and Parrot Bay, a frozen cocktail.

“We’re looking for innovation across both the on and off trade. The reality is that there has been a decline in the absolute number of consumption occasions across the trade over the last number of years and furthermore consumer behaviour and needs have changed. In addressing that challenge a number of opportunities have been created in both channels,” said David.

“We’ve seen a shift in consumer behaviour and the rise of the casual get together – the relax and unwind at home gathering. About 90% of occasions at home are lower tempo occasions. Consumers have made a conscious decision to stay in and have a quiet drink or meal with their friends and family on more occasions rather than going out. But having made the decision to be at home, consumers still want to make those occasions special,” he adds.

“For example we realised consumers want to be great hosts by serving great cocktails at home, but don’t always have the skills, time or knowledge. That’s where the idea for Parrot Bay emerged. It provides an instant cocktail solution, it’s got the novelty factor of being a frozen cocktail, it’s got a great taste and is at an accessible price point.”

In fact in the 16 weeks before Ulster Business went to print, Diageo NI had sold over 200,000 pouches of the product, the fastest rate of sale per store across Western Europe, generating over £500,000 in retail sales value within the local economy.

“We’ve got really high hopes that Parrot Bay is an innovation that will continue to connect with

of untapped consumers who are influenced by lots of international brands coming into the market and Harp needs to be relevant and feel like the brand for them in Northern Ireland. That’s what the campaign will be around.”

Smithwicks too will have a new advertising campaign on television on TV to capitalise on the emerging taste for ale, which is the best performing category in the on trade and up 8% this year in the take home trade. Smithwick’s Pale Ale is currently the

best selling craft ale in Ireland.Another trend the drinks company hopes to tap into

is the growing market of consumers over the age of 35. It is this market segment that it aims to direct towards the mid-strength version of perhaps its best known brand, Guinness.

“I’m one of the target audience for Guinness mid strength, I’m 36, have three kids, don’t get out to the pub as much as I used to. It’s perfect for me as I can go out and enjoy a few pints and not worry about the next morning,” said David.

“It is growing and we’ve got high hopes for it. The population in Ireland is getting older and we need products that cater for their different life stage needs.

Guinness Mid Strength fits that.”In everything it is doing, Diageo is aiming to

keep innovation front and centre. “It is all about tapping into the emerging

consumer insights and reinvigorating our core brands,” said David.

“In the past the companies that came out of recession strongest are now the biggest so we’re determined to grow our way out of it.”

Diageo employs over 400 people across four sites in Northern Ireland: Belfast Packaging, which bottles and cans a range of beer products; the Old Bushmills Distillery, which distils and packages Bushmills whiskey; and Baileys Global Supply, which produces Baileys Irish Cream products; plus its NI Head Office in Boucher Road. The company is one of Northern Ireland’s largest exporters in the food and beverage sector, with 85% of Bushmills and 90% of Baileys exported to over 150 countries.

Factfile

attracted a staggering 700 applications for 50 places when it was advertised over the summer. The programme’s undoubted appeal lies in the fact that it gives participants an industry-recognised qualification (in an industry awash with job opportunities) and a potential offer of employment from one of the partner IT companies.

As Belfast Met moves forward, we hope to expand apprenticeship opportunities across all key growth sectors – ICT, Business and Professional Services, Connected Health, Pharma-Science, Renewable Energies etc.

We have only to look to other countries such as Germany, Switzerland and Austria to see the value of apprenticeships in creating a skilled workforce and boosting economic success. Germany is of course most often held up as a template of good practice (not least by Chancellor Merkel herself ). Its economy is one of the strongest in Europe and youth unemployment is sitting at half of what it was in 2005. And what does the Chancellor attribute this success to? The answer lies in the fact that the German system regards apprenticeships and vocational training just as highly as it does academic study.

In our experience one of the limitations of the current system is that it is not broad enough in either scope or level to cope with the fluid realities of the wider economic context. The economy needs workers at every level in key growth sectors and Belfast Met would like to see the very definition of apprenticeships expanded to include a richer, more varied range of “on-the-job” training and “off-the-job” learning models.

This means retaining apprenticeships at Level 2 and Level 3 while also offering more apprenticeships at a higher level and so help change the current perception that a degree is something of a prerequisite for starting a successful professional career.

A good quality apprenticeship system will not only be industry-led but it should also facilitate and encourage the concept of up-skilling and re-skilling people at every age within the existing workforce. Employer organisations such as the CBI and British Chambers of Commerce have become increasingly vocal in calling for a fresh approach to apprenticeships. It is important that we listen to such concerns. Employers are best placed to advise on where the gaps are and how best to bridge the gaps. It is also the case that where larger companies go, smaller ones are more likely to follow.

Belfast Met looks forward to working alongside DEL and across the full spectrum of stakeholder groups to create a sort of “new norm” where the full potential of vocational skills and training is used to maximum effect in improving the economic and social success of Northern Ireland.

If we are serious about tackling the big and growing problem of youth unemployment, we need to start thinking differently about

how we equip our young people for work. Among other things this means changing the prevailing mindset which views university as the preferred and perhaps the only pathway to a good job and a promising career. There are alternatives and, in fact, many of these alternatives are geared specifically at giving young people the skills which employers need and which remain in worryingly short supply in the wider economy.

Chief among these is apprenticeships – a tradition which although hundreds of years old couldn’t be more relevant and necessary today.

Belfast Met is one of the largest

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EDUCATION & SKILLS

apprenticeship and training providers in Northern Ireland and while we recognise that the current system is not without its flaws we are certainly not alone in believing that apprenticeships have the potential to transform the Northern Ireland economy. We have already begun to see some excellent government initiatives, and not least from our own Department for Employment and Learning. DEL, led by Minister Stephen Farry, is currently undertaking an extensive review of apprenticeships in Northern Ireland and is, to some extent, leading the charge in giving the traditional model a valuable modern twist.

Among these initiatives is the DEL public/private ICT Apprenticeship scheme, run in conjunction with Belfast Met, and which

For information on apprenticeship opportunities at Belfast Met please contact Heather Hedley athhedley@belfastmet.ac.uk or tel: 028 9026 5494

Can a tradition dating back to the Middle Ages really help solve today’s skills gap? For Belfast Met Principal and Chief Executive Marie-Thérèse McGivern the short answer is ‘yes’.

Apprenticeships canhelp drive recovery

that designed and sold products. We are now an innovative company focused on new technology, which when market led gives us the opportunity to make them. New product development is the core of our business strategy.

Is there anything you would like to change about business in Northern Ireland?I would like to see business and government work even harder together to give our young people hope of employment. The press tends to focus on the negatives and these images that are splashed across the world are hugely damaging. All the customers who visit us here always leave impressed and they come back. We just need more to visit!

FACTFILEName: Patrick Hurst

Title: Managing Director

Company: Whale

Established: 1810

No. of Employees: 189

Previous Jobs: Wrightbus and RFD.

Hobbies: Classic cars, tennis and travelling.

Proudest Moment in Career: There are two. The company being recognised by Sunday Times as one of the Top 100 companies to work for in the UK, and receiving an MBE for business work done in the community.

What markets do you operate in and what is your position in those markets?We export globally to 50 countries supplying into three core markets; International leisure marine, RV/caravan and the health care industry. Within the last two years Whale has also become a centre of excellence within the world of 3D printing.

How have your markets changed over the years and why did you target these?In 2008 the marine market fell by 80%, the RV market by 40% and health care dropped 20%. This was extremely challenging for the company in its 199th year; fortunately the current management team decided to invest heavily in product development. We launched many new products just as the recession hit. By carefully managing the cash and resources of the business as well as focusing on increasing value to existing international customers we managed to grow significantly despite the extremely challenging market conditions. We grew because we stayed close to the market as a manufacturer and promised next day delivery in the UK and within 48 hours to Europe and the States. Today we offer high value and more innovative products and targeted taking market share as the principal strategy for growth. In the past four years our turnover has doubled.

What process do you use for strategy formulation?We produce a five year business plan that is updated every other year. It is both bottom up and strategic. We are always looking at ways to access new markets within existing channels

and our growth through M&A, with big focus on technology. I am the principal author of the plan but I seek direction from our senior management team and directors via taking the team on “away days” every six months. The plan is communicated to the workforce annually and there is a company briefing every two months to ensure everyone is aware of the key factors affecting the business. Anyone in the business can access the plan and our progress is communicated regularly.

What are the major inhibitors to your strategy?Lack of affordable and suitable commercial premises to match the growth. For five years we have been trying to get a new factory, but it has been the most challenging project to date. Thankfully, we have recently been successful in our quest; a big thank-you to the Bank of Ireland and Invest NI!

What attributes of your own leadership do you feel have been important in delivering on the strategy?I am passionate about being communicative to all employees and to make everyone in the company feel equally part of the business’ success. Openness and treating people with respect – if I go away on a business trip nobody notices; if Mike Cullen, who maintains and looks after the factory goes off for a day, everyone notices!

What is your view on new product development and how does this fit into your strategy?Historically we were a manufacturing company

Neal Lucas, Managing Director of the leading executive search and selection company Neal Lucas Recruitment, talks to the individuals behind some of Northern Ireland’s leading companies in this popular Ulster Business series. This month Neal meets Patrick Hurst from Whale.

www.neallucasrecruitment.com – Neal can be found on Facebook and followed on Twitter (@NealLucasRec)

Neal Lucas meets...

Commercial Property &

Construction

Sponsored by

Belfast City Council has launched a citywide Masterplan for the development of the civic assets of the city in the years

up to 2015 and beyond. It offers a coherent and understandable description of how the Council would wish the City to develop and, in support, has listed a number of actions and projects for the City Council to implement.

The Masterplan includes a big expansion of the Waterfront Hall to be better able to cope with conferences and exhibitions.

In recent weeks other plans for strengthening the quality of life and living standards in Belfast has been under the microscope of a team of six experts seconded from IBM to test, validate and/or amend the current planning ambitions. The advice of the IBM Smarter Cities Challenge team will be published during October and comes at an opportune moment. The advice of IBM on tackling deprivation and refreshing housing policies may be critically influential.

Belfast needs a regeneration strategy for the whole city region that takes account of, first, the existing deficiencies in the social and economic infrastructure and, second, anticipates what people (as citizens, consumers and employees)

will ask for in the next 20 years. Nostalgia can be, unfortunately, an attractive

emotional force. Easy phrases such as ‘revitalise the high street’ and ‘reduce the congestion caused by large scale commuting’ stretch the credibility of officials who are asked to implement suitable planning policies. Nostalgia, without an understanding of the wider forces of change, is the motivation of King Canute.

The early acclaim and now the later cynicism for the ideas espoused by Mary Portas, as the Government adviser on city centre policies, illustrates the deceptive nature of apparently straightforward concepts. Her remit, on policies to revive and sustain the ‘high street’ can now be seen to have been too narrow.

Comprehensive city-wide planning is a laudable ambition. Its delivery is a complex matrix of interacting participants. A macro overview of the society of a large city-wide area must be consistent with the design for smaller subdivisions such as the city centre and each of the identified internal sub-regions and the functional responses to economic and social questions.

Perhaps the biggest intellectual hurdle in

City plans cannot ignore the push of market forces

the appreciation of the value of comprehensive planning for large urban regions, such as Belfast, is to recognise the difference between an ambitious (and undeliverable) grand redesign for much of the urban infrastructure and a realistic appreciation of how incremental changes can and should be foreseen and facilitated.

Todays’ planners do not have a choice on whether to knock down whole networks and start again. Today, the question is how an ambitious incremental process can be made effective.

The Belfast Masterplan is a constructive and welcome initiative. However, the City Council would acknowledge that the delivery of a full multidisciplinary plan calls for the support of Stormont Departments on, for example, roads, public transport, housing, schools and health care. Overall planning policy will become a City responsibility when responsibility transfers on the re-organisation of local government.

A parallel hurdle is that a comprehensive plan must articulate and prioritise the possible actions of each of the relevant major public agencies which have different decision making responsibilities and hierarchies. The collective

36 OCTOBER 2013

COMMERCIAL PROPERTY & CONSTRUCTION

John Simpson finds both laudable ambition and an naivety in Belfast City Council’s new Masterplan for the city.

remit of the several and varied agencies should, ideally, be integrated by a ‘lead’ agency.

To the credit of Belfast City, the officials are working through a Delivery Forum. This is to be a guiding forum involving other agencies in the public and private sectors.

At one level, the current City Masterplan is more visionary than operational. On a different level, the statement on spatial objectives comes closer to a sequence of operational decisions. All of these variables depend first on developers being motivated to make investments and second on the planning authorities offering (or refusing) planning permission when appropriate.

The Masterplan sets out the ambitions for Belfast to be:

• A learning city• An accessible and connected city• A low carbon city• A digital city, and• A neighbourhood city

The delivery route for these broader visions is analysed in over 35 subdivisions. Many of these must be qualified as depending on private and public enterprises being attracted to these challenges. The Masterplan is stronger for this planning matrix but still not guaranteed.

The more direct physical aspects of the Masterplan are outlined in the spatial priorities for parts of the city. In the City Centre, there is a further subdivision analysing possible priorities in the centre, cathedral quarter (including the site of the expanded University of Ulster campus), the east bank area, the west link and the area around Shaftesbury square. Beyond the city centre, there are suggestions for the Titanic and Harbour catchment to the north and the University catchment to the south.

The critical test for the Masterplan is not whether the conceptual ideas make sense, which without commitment to them being implemented, they do. The critical question is whether there is sufficient leverage or incentives to put in place the improved public sector infrastructure (social housing, schools, roads, bridges, traffic management, better car parking, road realignments and additional green space) and facilitate complementary private sector developments. The Masterplan is, in reality, a matrix of ideas. At this stage, the degree of fulfilment and its timing remains in doubt.

The IBM team is publishing their ideas on aspects of social policy, including welfare support and housing, which might be added to the Masterplan. The team has chosen to review the situation in some of the most deprived wards in the City. The recommendations will be keenly reviewed by the City Council but will also be a challenge to the departments of central Government holding these social policy responsibilities.

Shortly, there will be arrangements for the commercial interests in parts of the city to come together to develop their own ideas within Business Improvement Districts. These Districts will be a test of collective self-interest since schemes will be financed by an extra levy on

businesses in the defined area.The most high profile debate on one major

aspect of the City Masterplan is the debate about the changing structure of the ‘high street’ in the city centre. The strong statement from the former Chairman of John Lewis that, for them, a city centre store is not feasible is a clear indication the changing commercial logic and appreciation of consumer interests.

Market forces, combining commercial logic and revealed customer preferences, means that planning policies need to adapt to out of centre dispersal for some large scale retailing. In the review of rating valuations, city centre retail property must seek some significant relief and out-of-town centres should expect to face higher valuations.

Planning issues on retailing, customer access, space for (and standards) of new housing will all become a challenge to the City authorities when the Reform of Public Administration is finalised and most planning decisions become a decision of the devolved planning policies due to be passed to the City in the next two years.

For elected representatives and their city officials, there is now a major opportunity to adapt the city Masterplan and a major challenge in the search for updated planning policies. Has King Canute been washed away?

OCTOBER 2013 37

COMMERCIAL PROPERTY & CONSTRUCTION

“The MasTerplan is, in realiTy, a MaTrix of ideas. aT This sTage, The degree of fulfilMenT and iTs TiMing reMains in doubT.”

Property auctions are now a widely acceptable form of asset disposal although many still believe that a sale by auction

means a “fire sale”. In other parts of the UK, auctions are an integral part of the property landscape with hundreds of auctions held each year. Admittedly, some lots are sold as a last resort, however, few would dispute that an auction is an efficient method of sale compared to more orthodox means.

It is over three years since we decided to re-engage with auctions when transactional activity in the general property market was at its weakest level for many years. At the time, this seemed either a brave or a foolhardy thing to do depending on one’s viewpoint. Seven auctions later, £11.5m worth of sales and an average sales success rate of 92%, our decision to re-launch the auction seems to have paid off with many others following suit!

In the current market, prices are at a five-year low thus presenting buyers with extremely attractive investment or owner/occupier opportunities. Our sales analysis reveals that 85% of the lots that we sold at auction were below the £100,000 threshold, which would have been inconceivable at the height of the property boom. Unsurprisingly, the vast majority of properties come through the receivership/administration channel, although the number of private clients putting properties up for auction has increased noticeably in our recent auctions and accounts now for almost a quarter

of vendors. This suggests that private clients now regard auctions as an efficient and effective means of achieving sales, particularly when their properties have failed to sell through methods that are more traditional.

And it stands to reason: for example, with a sale by private treaty, the period from first marketing a property to agreeing terms can be protracted. Even if the vendor and purchaser have agreed terms, more often than not, difficulties such as inability to secure funding, issues regarding rights of way and so forth can emerge to jeopardise the deal. All too often, prices are “chipped” or the purchaser simply walks away from the deal leading to a protracted marketing process.

Contrast this with the auction scenario where buyers, assuming that their bids are successful on the day, will be able to sign a binding contract secure in the knowledge that the property will legally be theirs within four weeks. Obviously, prospective buyers should carry out all due diligence relating to each property in advance of the auction.

The buyer profile has also altered radically with today’s bidder likely to be unknown to the auction house, in stark contrast to the boom period. Currently, the strongest market is the domestic housing market with many buyers acquiring houses at affordable levels within the exemption of stamp duty bracket. The growing demand for rented property is also attracting people back into the buy-to-let market whilst we

are seeing something of a resurgence in demand for residential development land, particularly within Greater Belfast. Commercial property and commercial development land, however, are much harder to sell due to limited end-use demand, rates liability, lack of development finance and associated fixed holding costs.

Across the UK, auctions are performing well with approximately 60,000 lots offered for sale in 2012 realising sales in the region of £3.5bn (EI Group) and sales have been rising year on year. Locally, there has been an uplift of 50% in funds raised in the second quarter of 2013 compared to the same period in 2012. As we prepare for our final auction of the year next month, we expect that the trend for auctions locally will continue to grow. Even though the residential market is stabilising and even increasing, albeit modestly, the commercial property market will take longer to stabilise, as its recovery is highly dependent upon the availability of finance.

Encouragingly, we are finally seeing signs of a general recovery although on an extremely gradual, some would say torturously slow, upwards trajectory and, more importantly, signs that it is definitely back to basics for buyers as they invest in property for the medium to long-term, whether at auction or through other means. Surely, recent history is unlikely to repeat itself. In sharp contrast to the boom years, purchasers are adopting an extremely shrewd approach regarding how and where they invest their cash.www.osborneking.com/auction

38 OCTOBER 2013

COMMERCIAL PROPERTY & CONSTRUCTION

by Mark Carron, Associate Director, Osborne King Commercial Property Consultants

Auctions offer certainty in an unexpected market

Pictured at the global launch of xpelgum at the Merchant Hotel are Chairman and Technical Director of Expelliere International John McCandless, with xpelgum Managing Director Chris Lomas.

A Northern Ireland company believes it has found the solution to a problem that has blighted property owners and councils

for decades – discarded chewing gum.Expelliere International has launched a new

ionic-based product called xpelgum which when applied breaks down the chemical structure of chewing gum to remove its stickiness and allow for its safe removal.

The technology was first developed at Queen’s University Belfast six years ago and since then over £2m has been invested by a local business consortium to take the ground-breaking technology to the point where it can be launched to a global chewing gum clean-up market estimated to be worth $50bn.

At present there are a number of partial solutions to the problem in the market involving high pressure water or steam jets that can damage the surface below the gum. The team behind xpelgum are marketing it as an environmentally safe gum removal solution and with global patents already in place for the next 20 years, the Lisburn-based company is confident of success.

Chairman of Expelliere International John McCandless, who has been chairman of several land and residential property development companies for the last twenty years, said: “Many attempts have been made to find a way of removing unwanted gum but to date a commercially viable solution to the problem has not been found.

“We believe xpelgum is that solution and the extensive testing we have carried out to date with organisations in the leisure, retail, hospitality and contract cleaning sectors has confirmed our belief that we have developed a product with true global appeal.”

So confident are the company in xpelgum that two of its directors, dressed in business suits, demonstrated it on an old piece of gum stuck to the lobby floor inside the upmarket Merchant Hotel. A spray of the liquid catalyst is followed by a spray of activating agent, starting a chemical reaction and causing the gum to appear to smoke, before being easily brushed off.

“We’ve already had a lot of interest and based on advanced orders we expect sales to be high,” the company’s Managing Director Chris Lomas told journalists. “If you’re responsible for a public space you will want our technology.”

The self treatment starter kit will retail for £299 and treat 500 pieces of gum, with a refill also costing £299 (enough for 2,000 pieces) and an estimated four refills needed a year for a commercial premises.

Expelliere is also in “advanced discussions” with UK contract cleaning company Johnsons Cleaners to see if it can adapt their machinery to use the product on a larger scale. It has also had interest from Henderson Group to use the product at its 400 stores. Expelliere already has Bunzl, the multinational distribution company,

Solution to a sticky problemsigned up and taking orders from its customers.

Lomas said the company expects to turn over £4m in the first year after launch and within five years hopes to have reached 1% of the market – around £500m.

The MD has a strong background in launching new brands having worked for a number of Blue Chip companies including Heinz Foodservice. He is also a former Dragons’ Den contestant and turned down a job offer from Duncan Bannatyne because he didn’t want to move to Scotland. However, the potential scale of opportunity with xpelgum was enough to attract him to work in Northern Ireland.

“It’s estimated that we spend £19bn a year on chewing gum and around £50bn cleaning it up. The problem is only set to get worse as more people give up smoking – there’s been a 30% increase in anti-smoking gum,” he explained.

“The conventional cleaning methods rely on steam and jet washing which can’t be used on all surfaces and comes at a huge cost, both in terms of money and the environment. Our technology doesn’t rely on that. It is the first technology that allows people to do it themselves,” he added.

“This is a Northern Ireland company, it was founded and funded in Northern Ireland and supported by Invest NI. It is cutting edge technology that is in high demand and we have a great opportunity to access a wide market place.”

40 OCTOBER 2013

COMMERCIAL PROPERTY & CONSTRUCTION

A local company is set to clean up after launching a product that allows old chewing gum to be easily removed.

In an interesting reminder of some basic principles of conveyancing and land law the Court of Appeal in England has recently

restated the position in relation to the use of rights of way (and other so-called easements) where liability for maintenance and repair costs is in dispute (Goodman and others v Elwood [2013]).

The facts involved the on-going costs of maintaining and repairing a private unadopted road in an industrial estate in Nottingham, although the principles involved apply equally to residential property.

In this case the freehold owner of one of the units on the estate argued that he was not liable to contribute to those costs on various grounds, including that he himself had not given any covenant to make contributions and on acquiring his unit had not become bound by such covenants given by previous owners.

This was despite his use of the road on a daily

basis and the fact that the other users at the estate all made contributions. The Court of Appeal held that the “benefit and burden” principle applied which is that a party may not take a benefit (in this case the right to use the road) without accepting the burden that goes with it (the obligation to contribute to maintenance and repair costs). In other words the right to use the road was made conditional on compliance with the positive covenant to make contributions. It was open to the owner to decline to make contributions but in so doing he would then lose the right to use the road.

The Court set out the various conditions which must be satisfied for the burden of a positive covenant, such as a covenant to make costs contributions, to be enforceable against successive owners of freehold land and for the “benefit and burden” principle to apply. Central amongst them is that the benefit must be conditional on,

Avoiding the bumps in the road

or reciprocal to, the burden - or put another way, there must be sufficient correlation between the rights granted and the obligation to pay. In the case of a right of way or other simple easement and the associated costs of maintenance and repair, this condition will usually be easily satisfied.

Most modern estates and housing schemes benefit from more sophisticated legal arrangements between owners which provide for enforcement of positive payment obligations such as deeds of Covenant and registered title restrictions. Also these problems of enforcement against successive owners generally do not arise where a landlord and tenant relationship exists, for example where the land is held under a 999 year lease at a peppercorn rent, as will frequently be the case in Northern Ireland.

Nevertheless there are many properties around the country where the documented legal arrangements are unclear or inadequate and enforcement of obligations to contribute to the maintenance of private roads, drains, street lighting and the like remains a problem. In these cases this Court of Appeal authority may come to the aid of solicitors and their clients.

42 OCTOBER 2013

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Graham Pierce, partner in the commercial department of Worthingtons Solicitors in Belfast, outlines how a recent case highlighted the need for clarity when it comes to maintenance costs on private roads.

Graham Pierce is a partner in the commercial department of Worthingtons Solicitors, Belfast and can be contacted at graham@worthingtonslaw.co.uk

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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2258 Ulster Business Ad.indd 1 02/10/2013 13:45

Award glory for the Guildhall

The winners of the CEF/Specify Construction Excellence Awards 2013, in association with Ulster Business, have

been announced at a gala evening ceremony in Belfast. Guest of Honour, Finance Minister Simon Hamilton MLA revealed H&J Martin as the winner of the Overall Award for the restoration of the Guildhall in Derry.

The iconic historic building, which also won the Restoration Award, emerged as the ultimate winner for 2013 against stiff competition from the other 13 category winners including the Skainos Project by Farrans Construction and Torbank Special School by Graham Construction.

Congratulating the overall winners John Armstrong, Managing Director of the Construction Employers Federation (CEF) said: “I commend H&J Martin for their outstanding work in breathing new life into this culturally significant landmark building. This project exudes a wonderful richness in quality and detail with a seamless match between restored original construction and new insertions. This is a project of international quality.”

A packed Culloden Hotel hosted the prestigious ceremony which is now firmly established as the highlight of the construction calendar in Northern Ireland. The audience, which included guests from across the political,

public and private sectors, was addressed by Simon Hamilton, the Minister for Finance and Personnel.

Mr Armstrong said: “The Minister’s presence at the Awards underlines the construction industry’s significant contribution to the Northern Irish economy. However, more than anything else this competition highlights the positive impact that the construction industry has on communities across Northern Ireland.”

“I congratulate all the shortlisted finalists and particularly the winners of each of the 13 categories. These companies are ambassadors for the construction industry both at home and now increasingly abroad. It is the quality of their work that makes them stand out from the crowd.”

The Skainos project, built by Farrans in East Belfast, emerged as winner of the Social/Community Construction Award from an illustrious group of finalists which included the Giants Causeway Visitors Centre by Gilbert-Ash.

The Henry Group not only picked up the Commercial Construction Award for a new wing at HMP Maghaberry built by Henry Brothers but also won out in the Exporting Award category for its success achieved through Windell Ltd which specialises in commercial and blast enhanced glazing projects.

Donaghmore Construction won the

Environmental Sustainability Award – a category in which the standard of performance witnessed by judges is increasing rapidly each year – whilst Maurice Flynn won the Training Award and Adman Civil Projects won the Health and Safety Award.

The four infrastructure awards were dominated by the big players with Lagan Construction, Graham Construction and McLaughlin & Harvey coming out on top. However, less well known Fireglass Direct Ireland picked up the Health Infrastructure Award for its specialist work on the Isolation and Critical Care Suites at the Royal Victoria Hospital.

Graham Construction picked up their second award of the night, this time in the Private Housing category, for QUB’s Postgraduate Accommodation at the Elms Village and for the second time in the last three years T&A Kernoghan were presented with the Social Housing Award, on this occasion as joint venture partners to Collen Construction, for the INBEV Regeneration Project.

The penultimate award of the night, the Achieving Excellence in Partnering Award, went to QMAC Construction and the whole team involved in the delivery of Ashleywood House in Londonderry including Foyle Women’s Aid and Apex Housing Association.

44 OCTOBER 2013

Billy Martin, Chairman of H&J Martin and the H&J Martin team receive the Overall Award from Principal Sponsor, Raymonde Nathan of JLT, at the gala evening of the Construction Excellence Awards 2013 in the Culloden Hotel.

COMMERCIAL PROPERTY & CONSTRUCTION

OCTOBER 2013 45

A new corporate partnership between the NI Departments and the UK’s leading professional body for Project Management,

the Association for Project Management (APM) was launched at a special breakfast event in the Long Gallery Stormont recently. The event was attended by over 60 senior civil servants including Heads of Government Departments and the NI committee members of APM.

APM has over 20,000 individual and 500 corporate members making it the largest professional body of its kind in Europe. With a respected track record of improving professional standards and capability, it is the Olympics Delivery Authority Learning Legacy Partner.

Corporate members, which include BT and Thales in Northern Ireland, have access to a range of services that help build competence, recognition, and professionalism. NI Branch Chairman, Leslie Warren, predicts an increased demand for the skills of the professionally qualified project manager, “we expect to see an upsurge in demand for the skills of the Project Professional across all sectors as public and private organisations continue to grapple with the challenges of delivering more value with less resources.”

A dedicated membership development team ensures corporate members can maximise the benefits of membership for their employees and can access the latest thinking and information

Professional programme and project management to be key priority as NI Departments partner with UK’s leading body for Project Management, APM.

NI Government Departments partner with the Association for Project Management

about all aspects of project and programme management across the UK from sharing knowledge to tapping into local and international events as well as specific interest groups.

Discounts on APM qualifications and waivers on individual membership registration and upgrade fees also apply as well as discount on publications, CD’s and guides. Corporate members also avail of priority access and discounted rates to APM conferences and a 75% discount on the International Journal of Project Management.

For further details on how to join APM on a corporate or individual basis visit www.apm.org.uk or contact APM NI Branch Chairman, Leslie Warren on 07900 583188.

From left: Tom Taylor APM President; Leslie Warren APM Northern Ireland Branch Chairman and Director of Jigsaw Project Mangement; NI Minister for Finance Simon Hamilton and Des Armstong Director, Central Procurement Directorate, Department of Finance & Personnel.

From left: Gerry Coughlan URS and APM NI Branch committee member; John Crosbie Enterprise Shared Services; Deborah McNeilly, Department for Regional Development and Colm McCarthy, McCarthy Lilburn & Partners and also APM NI committee member.

From left: Tom Taylor APM President, Leslie Warren APM Northern Ireland Branch Chairman and Director of Jigsaw Project Mangement and Stephen McDowell, Department of Finance & Personnel and APM NI committee member.

From left: Mike Brown, University of Ulster and APM NI committee member; Sylvia Murray, Department for Social Development; Karen Dickson, Northern Ireland Housing Executive and Des Clayton, Knox & Clayton and also APM NI committee member.

46 OCTOBER 2013

LAW

“We have had a positive year so far and I am confident that this will continue right through

until the end of the year and beyond,” says Mark Thompson.

“Since establishing the Belfast office six years ago, our business strategy has been underpinned by our ability to attract the best people and to deliver the highest quality legal advice and service in Northern Ireland. We now have a headcount of over 75 people and that really pays dividends in terms of the volume and quality of the work we are receiving from leading organisations in Northern Ireland and from international markets. Although the business environment remains challenging, there are some signs of a recovery appearing in the local economy, which are encouraging.

“Our team – led by what I believe to be an outstanding group of 11 partners – is working extremely hard with great clients across, all of our specialist practice areas, from corporate & M&A, banking & financial services and corporate restructuring & insolvency, to employment and property.”

Thompson highlights how the firm’s work has been recognised in recent months: “In the recently published Legal 500 UK 2013 report, A&L Goodbody has been recommended as a top-tier firm across a range of practice areas, with a number of our partners having been named on the ‘leading lawyers list’. In addition, 17 of our lawyers from across our practice areas have been individually recommended in the report.

“Earlier this year A&L Goodbody were named as ‘Corporate Law Firm of the Year’ by Insider Media - with Peter Stafford, our Chairman, also being named ‘Dealmaker of the Year’. Once again we have been named by Experian Corpfin as the ‘Most Active Legal Advisor’ in the local M&A

market, a position we have retained for over 18 months.

“I think this sends out a very strong message to the local market – that our clients are in safe hands and that, if you want your business to be supported by top legal advisers, A&L Goodbody is the place to go in Northern Ireland.”

A&L Goodbody’s international presence is stronger than ever, with offices also in Dublin and London and several offices in the US – most recently opening an office in San Francisco. Thompson recently travelled to New York with a number of the firm’s partners as part of its support of The Lyric’s Broadway performance of Brendan at the Chelsea.

“It was fantastic to be able to support a Northern Irish production on Broadway, showcasing the talent that is coming out of Northern Ireland not only in business, but in the arts too” says Thompson. “With offices in New York, Palo Alto and San Francisco, our US client base is growing year on year – largely because we go over and engage with them on their own patch,” he said.

He explains that, as well as meeting with US-based clients and professional services firms, the A&L Goodbody representatives also had the opportunity to engage with the Northern Ireland diaspora: “Irish networks in the US are very strong and it was great to see conversation

2014 will be ‘a year of opportunity’

being stimulated around the opportunities that lie specifically in Northern Ireland, and to discuss how we can continue to build relationships and share opportunities for new business and investment between Northern Ireland and the US.”

Looking ahead, Thompson is confident that 2014 will bring many new opportunities for local businesses and the wider Northern Ireland economy.

“On the corporate side of the business, 2013

has been a year when we have seen an increase in the number of big ticket transactions from international buyers. I would be fairly confident that Northern Ireland will also see increased activity in the indigenous M&A market picking up in 2014. In the last month alone I have had separate discussions about three potential MBOs next year and we are already acting on a number of high profile sales and purchases which will be announced in the near future.

“A&L Goodbody is well equipped to assist our clients in meeting the challenges and opportunities that 2014 will bring head on.

“The best people, great clients and delivering the highest quality of work – that’s what has got us to where we are today and what will continue to drive growth and success at A&L Goodbody going forward.”

Now in its sixth year in Belfast, A&L Goodbody has established a strong reputation as one of the leading corporate law firms in the local market. Ulster Business talks to Corporate Partner and Head of Belfast Office, Mark Thompson.

“2013 has been a year when we have seen an increase in the number of big ticket transactions from international buyers.”

48 OCTOBER 2013

ECONOMY

Northern Ireland’s economy will see modest growth this year and next but the recovery is likely to falter in the

medium term, according to forecasts from a new independent economic research group.

Growth of 0.7% in 2013 rising to 1.5% in 2014 was forecast by the Northern Ireland Centre for Economic Policy (NICEP) which was officially launched this month at an event hosted by the Ulster Business School in the University of Ulster.

NICEP said this would equate to approximately 6,000 net new jobs being created in 2013 and a further 12,000 in 2014.

But NICEP Director Professor Neil Gibson said that while there was little doubt that economic recovery is underway in Northern Ireland, there was no time for “self-congratulation”.

In a projection that is at odds with most published forecasts, he said NICEP’s model suggested the recovery would “run out of steam” over the medium term due to on-going austerity measures planned by Government, rising interest rates and increasing inflation.

Arlene Foster and NICEP Director Professor Neil Gibson launch The Northern Ireland Centre for Economic Policy (NICEP). Also pictured are sponsors Gerry McGinn (left), Managing Director of First Trust Bank and Len O’Hagan (right), Chairman of the Belfast Harbour Commissioners.

Giving the Northern Ireland Centre for Economic Policy’s first forecasts, NICEP director Neil Gibson says we should not expect tentative signs of optimism to develop into a full blown economy any time soon.

Be prepared for an ‘uninspiring’ recovery, warns NICEP report

IndustryThe manufacturing sector has posted positive jobs growth in the first half of 2013 (although an unusually high self-employment estimate in Q2 2013 is likely to be revised down). Notable expansions in existing firms, particularly in the food processing sector, and improving demand from trading partners is helping drive growth.

The sector is forecast to contribute just over 40% of total GVA growth over the next five years, underscoring its continued importance to the Northern Ireland economy (employment contribution is more modest at 12%).

ConstruCtIonHaving dipped below 50,000 workers for the first time since 1997, the construction sector in 2013 is beginning to see very

modest growth. House building has begun to tick upwards, and with significant pent up demand, given the lack of building in the last five years, this should continue. At 6% of total employment the sector is now below the long term average (it would currently have around 8,000 more jobs if it were to return to long term average levels of 7%) and this suggests the long period of contraction in the sector is at an end.

PrIvate servICesPrivate services have been growing strongly in the UK but relatively poorly in NI. In total, the sector has 23,000 (-5.7%) less jobs in NI than in 2008, compared to 2.3% more in the UK as a whole. This is partly explained by the scale of problems in the housing market in Northern Ireland but nevertheless performance has been disappointing. Notable

inward investments in the finance, ICT and professional services sectors should begin to drive growth across the sector and the prospects are relatively strong.

PublIC servICesLooking at public sector services (public administration, health and education) there is little evidence of pronounced austerity in the headline employment numbers. Job levels are broadly unchanged since 2008 across the three sectors. Public administration is down approximately 5,000 jobs but employment in health is up by a similar amount. The strong demand evident in health will drive growth in this area (whether it is provided publicly or privately) but with only 8,000 jobs forecast across the three sectors by 2018 the challenge for job growth elsewhere in the economy is evident.

NICEP’s sectoral outlook

OCTOBER 2013 49

ECONOMY

“The key difference is that our long term prognosis suggests challenges ahead. For an economy with a big public sector further austerity is unlikely to give us an environment in which the labour market can expand unless our private sector can really ramp up its job creation levels,” he said

“If wages are not growing above inflation, people aren’t getting richer and we’re not employing a huge number of extra people, the consumer recovery runs out of steam.”

Professor Gibson noted that many existing economic models were flawed because they had not predicted the length of time it would take to recover from the recession, always saying it would happen “next year”. These models predicted that if big companies had money they would spend it, and those private businesses spending their cash reserves was meant to lead the recovery – something that has not happened.

“Having cash won’t do it, you have to have customers. If there’s no demand you won’t build another factory. You won’t buy more equipment. Why would you if nobody is buying your stuff? There were no new customers because consumers weren’t spending and governments weren’t spending so the only potential avenue was trade,” said Professor Gibson.

“The weight of the recovery lies almost exclusively with the private sector and whilst growth in business investment and consumer spending should accelerate, this will be at a rate insufficient to achieve Northern Ireland’s economic ambitions.”

Although NICEP is based at the Ulster Business School and has sponsorship support from the Department of Enterprise Trade and Investment, First Trust Bank and the Belfast Harbour Commissioners, it will provide independent and robust policy-orientated economic research.

Headed up by Professor Gibson and supported by Associate Directors Richard Johnston and Gareth Hetherington, NICEP will seek to engage with all organisations that have an interest in helping Northern Ireland achieve its economic ambitions.

“Right now, in 2013, we have to be doing everything we can to develop policies that will make it easier for businesses to grow. If the private sector cannot lead this recovery we think there are some significant problems ahead given

what the government is planning to do,” said Professor Gibson.

He said it was time Northern Ireland had detailed estimates on key economic indicators such as the value of its exports and consumer spending so it could gain a genuine understanding of what is driving the economy.

Among the key other forecasts made in the NICEP report were predictions that average house prices in Northern Ireland will rise from £132,000 to £139,000 in 2014 and £155,000 in 2015. In the five years to 2020 its forecast sees prices at an average of £221,000.

It also predicted that the return to jobs growth in the medium term would not be a rate that would recover the 44,000 to 50,000 jobs lost over the course of the recession.

“The current forecasts from the NICEP model suggest Northern Ireland will fall short of its ambitions with neither employment creation nor income growth showing substantial improvement compared to the UK benchmark,” the report said.

It continued: “Confidence plays a critical part in the spending plans of both consumers and businesses and any ‘talking down’ of recovery is most unhelpful.

NICEP’s KEy ForECasts

UK

2013 2014 2015 2016-20

GVA 1.4% 1.8% 1.9% 1.7%

Employment 1.0% 1.3% 1.0% 0.1%

Unemployment rate 3.6% 3.5% 3.4% 3.5%

House Prices £224,000 £230,000 £249,000 £329,000

NorthErN IrElaNd

2013 2014 2015 2016-20

GVA 0.7% 1.5% 1.5% 1.3%

Employment 0.7% 1.4% 1.1% 0.2%

Unemployment rate 5.5% 5.5% 5.0% 4.2%

House Prices £132,000 £139,000 £155,000 £221,000

“The weighT of The recovery lies almosT exclusively wiTh The privaTe secTor.”

“However, now is not the time for self-congratulations from the policy making community. It is time to listen to the challenges facing businesses and consumers and help design a policy environment that will allow the recovery to flourish and meet the challenge of on-going fiscal tightening.”

Momentum sets out digital plans

50 OCTOBER 2013

TECHNOLOGY

A series of proposals have been put forward that could see Northern Ireland’s digital sector create over 20,000 new jobs in the five to ten years.

The plan emerged from the first Digital Summit hosted by industry body Momentum which brought together six Northern Ireland Executive Ministers, six government departments, and representatives from huge employers like Allstate and Citi, small software development companies, the Universities, schools, and financial institutions.

Momentum Chairman Rob McConnell said: “Over the past 18 months Momentum has been working with the digital sector, government, and the educational establishment to look at ways of removing barriers to growth across ICT. We’ve come up with a detailed and carefully considered plan which has been well received by all those with whom we’ve consulted.

“We will now look forward to the next stage of the process, taking all of the proposals we have put forward, and the helpful ideas and suggestions which came from our breakout sessions this afternoon, and working them through government and into concrete actions. In many ways, however, the real work starts now.”

Momentum engaged the services of highly respected economic consultant Colin Stutt who developed a detailed series of proposals. The proposals were then added to by internationally respected ICT analysts Gartner. Among the proposals tabled were:

1. A Digital Innovations Fund. 2. Appoint a finance facilitator for the Digital Sector.3. Practical mentoring on new market entry by those with the right experience.4. Initiatives to support Northern Ireland SME getting access to government contractslocally, nationally and internationally.5. Develop a programme of supported visits by Momentum members to prestigiousinternational trade shows and conferences to develop market awareness and networks.6. Digital sector to work closely with education to help develop knowledge and experience leading to improved teaching of software design.7. Developing the Skills Supply Chain by a communication and engagement strategy to persuade parents and children of the importance of computing in their careers and to identify talented children at an early age.8. A Regional Commitment to Software Excellence underpinned by the Executive.9. Develop a model studentship scheme and an associated fund to be used by Momentum members to support potential employees through education.10. Develop a scheme for Digital Warehouses or Hubs in provincial towns.

Momentum will now engage with the relevant departments around the development of an Action Plan, and seek to take the proposals forward in the new year.

On April 8, 2014, Microsoft will end support for the decade-old Windows XP as well as Office 2003. This means

your Windows XP machines will no longer receive updates, including security updates from Microsoft.

Leaf understands the security and privacy implications of this event could have significant impacts on your business. Leaf have been planning migration with our own customers for the past 12-14 months. It isn’t too late but you need to be aware of the potential issues.

Without critical Windows XP security updates, your information may become vulnerable. Windows 8 Pro and the new Office offer enhanced security features like built-in firewall, anti-virus, rootkit malware protection and Rights Management for emails and attachments.

Many software and hardware vendors will no longer support their products that run on Windows XP. Newer versions of your line of business apps are supported on Windows 8. For example, the new Office takes advantage of the modern Windows and will not run on Windows XP.

When problems arise, online and phone-based technical support will unfortunately no longer be available. You can continue to work on a supported platform with Windows 8 Pro and the new Office.

The risks of business disruption could increase because of the lack of supported software, and the increasing age of hardware running Windows XP. Moving to Windows 8 Pro and the new Office in a timely, planned manner will reduce downtime later.

This is your opportunity to see how 10 years of innovation in both Windows 8 Pro and the new Office (either Office 365 or Office Standard 2013) can help your customers’ business.

Please contact Kyle Johnston at Leaf Consultancy to discuss how we may assist.Tel: 028 9089 7650 or email: sales@leafconsultancy.com

Don’t be left high and dryBy Kyle Johnston, Sales Manager, Leaf Consultancy

Pictured with John O’Dowd, Minister for Education are Michael Noble, Ken Roulston, Barry Turley, Rob McConnell, Momentum and Dan McGinn from Ulster Bank.

Business Finance & Banking

Invest NI is confident that with the launch of its two new Development Funds it has the funding continuum in place to

support local companies from start-up to high growth established business.

The two new funds of up to £30m each – with up to £15m of public funding per fund – will be managed by Northern Ireland debutant Kernel Capital (with the backing of its long term partner Bank of Ireland) and experienced player in the local market Crescent Capital.

The funds are designed to help SMEs in Northern Ireland to accelerate their growth and form the final part of Invest NI’s suite of funds, which aim to help bridge a gap in finance no longer available because of the reduction in the number of private investors and banks willing to lend.

They will target investments in the range of £450,000 to £2m, where there is a perceived market failure in Northern Ireland and the rest of the UK. It is a range where there have been no investments for the past two years since Crescent Capital wound down its second fund.

The launch of two funds in the same space is something of a departure for the agency and potentially creates some competition for investment for the first time.

Their launch also offers a scale not seen here before, although INI argues that there has not been sufficient demand in the marketplace in the past to justify it at the level these funds will be operating at.

The development funds have each been set the target of building a portfolio of 20 companies over a five year period (four a year).

Like previous Invest NI funds, the Development Funds are subordinated – meaning it takes any loss before private investors. It is an approach that has drawn criticism in the past as previous funds have offered little return on investment, but the agency sees it as its job to get the funds into the marketplace to help companies grow.

Both fund managers are understood to have raised significantly more private sector investment than the £15m first close level required under the tender and Invest NI is confident both managers will achieve funds of around £30m as many investors don’t commit to VC funds until they are up and running.

The agency is also seeking to move things

Ulster Business speaks to the fund managers who will operate Invest NI’s long awaited Development Funds and takes stock of the impact that the various funds put in place at all levels are having on access to finance.

52 OCTOBER 2013

BUSINESS FINANCE & BANKING

New funds the final piece of the venture capital puzzle

on by asking the fund managers to do more syndication with funds outside of Northern Ireland, therefore bringing more money in.

The launch means there is now £140m of debt and equity investment available to businesses across Invest NI’s Access to Finance portfolio of funds (see below).

Enterprise Minister Arlene Foster said: “These funds are part of a major Access to Finance initiative established by Invest NI to help to boost private sector growth, ensuring that companies with high growth potential are not held back because they cannot access finance.

“Both funds are equity based and will operate for ten years. Investments will support local innovative companies that have the potential to grow in global markets. They are valuable additions to the existing sources of funding for businesses in Northern Ireland.”

The Minister said that at the end of the last

“THEY WILL HAVE A sIgnIfIcAnT ImpAcT on HIgH groWTH compAnIEs, And bE A VALuAbLE AddITIon To THE ExIsTIng progrAmmE of fInAncIAL supporT.”

financial year over £20m of investments had been made by the Access to Finance funds, helping over 180 businesses.

CBI Northern Ireland Chairman Ian Coulter welcomed the two new equity funds, saying: “In the context of a heavily constrained finance market, this is a most welcome development. A key part of the CBI’s ‘Getting Growth Finance Going’ report published in June last year was a recommendation for the introduction, for the first time, of two parallel funds to stimulate the development capital market for local businesses so as to aid expansion and growth.

“I am confident that these funds will have a significant impact on high growth companies, and be a valuable addition to the existing programme of financial support.”

In the following pages we speak with the managers of the new funds to hear about their plans.

OCTOBER 2013 53

BUSINESS FINANCE & BANKING

Kernel Capital is keen that its first fund in Northern Ireland is not its last.

Having won a Development Fund tender, the Cork-headquartered fund manager is this month setting up an office in Belfast and establishing a full time team of four people based in Northern Ireland.

Founded in 1999, Kernel Capital is one of Ireland’s largest and most active venture capital funds with a portfolio of investee companies across, technology, life science and general industry and over €170m under management spread across multiple Funds

While it has six portfolio companies with commercial activities in Northern Ireland and partner Danny McCaughan lives in the province, the new Bank of Ireland Kernel Capital Growth Fund (NI) represents the first time it has had a mandate to invest here.

“It is a ten year fund and we don’t want it to be a one time fund. We have metrics we’ve committed to achieving but the real success of this fund will be if we can raise further private sector money for a further fund in about four years’ time. Then you get a rolling sequence of funds and bring more funding into Northern Ireland that is more and more private sector weighted,” said Niall Olden, Kernel’s Managing Partner.

“The bottom line is that we see this as a commercial opportunity and we can only sell it to our private investor base as a commercial opportunity. To raise repeat funds it has to be a commercial success.”

Kernel’s team in Cork will be active in investments and Olden believes the management expertise it brings in helping companies grow will prove attractive.

“We’re new so we automatically bring something fresh. It is always good for the industry for new people to come in,” he said.

“We currently have a portfolio of about 70 companies and there are 300 directors or C level people in Kernel Capital companies. That’s quite a wide base of knowledge. We tap into that network which gives us a level of scale and reach that allows us to build relationships with other VC funds in the EU and US, with intermediaries, with acquirers. That’s what we’ll look to bring to this fund as well.”

Olden is confident there are enough high quality companies in Northern Ireland to ensure a strong deal flow of investable companies from a range of sectors.

“If you have intelligent people and you have the capital, you will create the deal flow,” he explained.

“It’s not as though we’re passive to the deal flow. It is the job of VCs and early stage funders to go out and create deals. Make deals happen that wouldn’t have otherwise. Find parties that might not have thought about VC as being a potential boost to their business and persuade

them it is.”Kernel says that if a company is eligible to

be a client of Invest NI it will be eligible for its fund. It is targeting companies beyond the early seed funding stage.

“We want companies that are turning over £1m or in clear sight of doing so within 18 months of our investment, maybe with a pipeline of customers. We’re not targeting this fund at companies that are deep research companies. We’re not looking at companies that are five, sixth, seven years from revenue. We want to see commercial activity. Companies that are moving to a position of financial viability who need an equity investment because there are not going to grow fast enough organically to capitalise on the opportunity they have,” added Olden.

“We’d be keen to hear from people who have not considered VC and maybe haven’t even considered Invest NI. They maybe existing businesses with tremendous growth potential but it hasn’t occurred to them that venture capital could be available.”

Despite being a tough fundraising market

for VCs internationally, Olden believes it is a “compelling time” to get a fund into the marketplace because there are sensible valuations and respect for what equity investment can do for a company.

Olden is also keen to quash the idea that VCs are only interested in the exit from a company that allows them to make a return on their investment.

“The best source of money a company can get is not VC money or Invest NI money, it is customers’ money. We’re not exit focused. We don’t believe an early stage company should have an exit plan. The simple reason for that is that there is no problem getting your equity out of a successful company – it’s the dogs you can’t get out of,” he said.

“When we invest in a company we want to see the plan to make it a seriously viable and successful business. Don’t be telling us about IPOs or trade sales, tell us you’re going to get your business turning over a target level of revenue making a level of net profits and then the opportunity to exit will appear. It is really about building successful businesses.”

Kernel Capital eyes long future in NI

“IF YOU HAVE INTELLIGENT PEOPLE AND YOU HAVE THE CAPITAL, YOU WILL CREATE THE DEAL FLOW AND MAKE DEALS HAPPEN THAT WOULDN’T HAVE OTHERWISE.”

Dr Danny McCaughan and Jayne Brady, Kernel Capital, with William McCulla, Invest NI Director of Corporate Finance and Property Solutions, Julie-Ann O’Hare from Bank of Ireland, and Niall Olden.

It has been a long time coming but the team at venture capital fund manager Crescent Capital are confident its third fund will be

worth the wait.Crescent last year fell short of raising private

funding that would have allowed it to reach the £22.5m closing level set by Invest NI in the previous iteration of the Development Fund.

But after successfully re-tendering for one of the new £30m funds – which had a lower first close level of £15m, requiring a minimum £7.5m of private investment – Crescent III is all set to start investing, says CEO Colin Walsh.

“This time last summer we were hammering the nails into the last attempt to raise the fund. It was awful because we could see half the money in front of our faces but the other half was impossible to raise under the terms we had. So we all moved on,” he said.

“The market was tough. It was hard to sell. The terms of the previous fund weren’t any way close to as commercial and attractive as these

ones are. They probably weren’t too wide of the mark at the time the concept was framed but through the passage of time the goalposts moved.”

Focusing on companies who need investment in the range between £500,000 and £2m, Walsh says the work it has put into preparing companies for investment over the past few years won’t go to waste.

“There were some very compelling propositions that we groomed in preparation for Fund 3 that we have steered to other places to get funding in the end because we couldn’t hold them. But there are others that are still there,” he said.

“There are a lot of companies who’ve been stuck because of the lack of available finance but also because there wasn’t the level of confidence to push on and develop their business. We’ve heard from the banks that they are trying to lend. You take some of that with a pinch of salt, but there has clearly been a reticence on

the part of a lot of companies to gear up. A lot of companies were looking to gear down so expansions were put on hold. But I think this has all come together at a good time because there’s been a palpable change in confidence in the last three or four months,” he added.

“That hasn’t yet fed through to orders and growth in business for a lot of people, but they are getting more inquiries, giving more quotes, so their confidence goes up and they decide it might be time to dust off the expansion plans.”

While Crescent has become synonymous with successful technology companies such as Andor Technology, Lagan Technologies and APT, Walsh expects to make more investments in firms which operate in more traditional sectors this time around.

“Our focus is the same but our deal flow might end up different. We are generalist investors, although we are perceived as early stage technology investors. But that only came about because through the life of Fund 2 that was the deal flow that presented. We were after a flow of mainstream and industrial opportunities but the banking environment was such that they squeezed out equity providers at that time, so the types of deals we’d done in Fund 1 – for example Balcas – weren’t available to us. That’s the reason we ended up with a portfolio tilted toward technology,” said Walsh.

“The landscape has now changed again. The banks have retreated so we anticipate there will be more of the mainstream type deals available to us, evidenced by the type of deal flow they are seeing at the Growth Loan Fund.”

Having been in the game for 20 years, Crescent is confident its team is well placed to help company founders build better businesses and achieve successful exits.

“There’s more of a chance of having more Andors in the next five years than there was of having one when they started,” said Walsh.

“The whole ecology has changed. Now there is a whole galaxy of people offering entrepreneurship and business readiness training. Entrepreneurs are a lot more savvy, they are much more commercial and have much more rounded teams. The last four or five years there was no opportunity to IPO a small emerging technology company, but that’s turning now as well.”

It is also possible that the run of no VC deals above £500,000 in Northern Ireland could come to an end in 2013.

“There are a few deals in the funnel and we are working to get one or two over the line before Christmas. There are do-able deals we could finish before Christmas if there were no major obstacles,” he said.

“We haven’t agreed final terms, we haven’t finished due diligence, but there is potential to do business in this calendar year and we are up for it.”

54 OCTOBER 2013

BUSINESS FINANCE & BANKING

“There’s more of a chance of having more andors in The nexT five years Than There was of having one when They sTarTed.”

Crescent’s third VC fund ready to flyWilliam McCulla, Invest NI and

Colin Walsh, Crescent Capital

56 OCTOBER 2013

BUSINESS FINANCE & BANKING

Mike Bowman, director of E-Synergy, says: “There has undoubtedly been an increase in demand and an overall increase in quality of people, ideas and things. Northern Ireland seems to be getting the entrepreneurial bug. The demand is there and that’s been validated by Invest NI with additional funding.

“In early 2013 we got an extension of an extra £2m on our Invest Growth Fund which took it from £5m to

£7m and an extra £2m on our Proof of Concept Fund which took it from £3m to £5m.

“We’ve got this idea of an escalator where you can start at the beginning and get maybe three rounds of investment from us before moving on to bigger funds or having a self-sustaining business.

“By March 31 next year we’ll have had to award all the Proof of Concept money, although the recipients have a further year to spend it. The deadline is the same for our investment fund, but we’ll have some money left for follow on investments for a few years after that as we don’t want to leave portfolio companies who need more funding stranded.

“I would say over half the companies we’ve invested in are in the digital and technology space. That’s driven by us having a good software community here and obviously you can get a business off the ground spending less money in the software sphere than in other sectors.

“We’ve got a portfolio of 21 at the moment and roughly about a quarter make something physical, about a quarter are B2B software, with half are in the app/consumer tech space.

“We’re in the risky stage of investment at start-up and early stage, so not all of them are going to succeed and only a certain percentage will go on the full journey to achieve an exit. I’ve no idea what that percentage will be. The process of investing is relatively easy, the hard bit is value creation.

“My view is that you couldn’t find a better place in the UK to start a business in terms of overall support, a lot of it through Invest NI. There is a good infrastructure and helpful programmes such as Propel. But if you’re then going to move on you have to look outside of the province, not just for further rounds of investment but for customers and routes to market. You’re not going to grow a world class business without stepping outside of Northern Ireland. I think many entrepreneurs here do understand that. There’s a good spread of funding but the biggest struggle for entrepreneurs is to raise that middle ground of funding which is the problem of any start-up journey.”

The view from NI’s other fund managers

Neil Simms, Finance Director of Clarendon says: “In short things are going very well for Co-Fund NI. We have made 21 separate investments into 16 companies in just over two years, demonstrating that deals are there and that the fund and the private investors we sit alongside have the capacity to make follow-on investments into our earlier investments, like MSO Clelland and Cirdan Imaging.

“The Fund has invested £3.6m alongside £5.3m of matching funding from private investors, giving a total Fund Investment of £8.9m and an average investment round size of £425,000.

“We had a comparatively slow start as there tends to be quite a long gestation period for equity deals, so in the first full year we only invested £0.6m. Since then we have been at a run rate of investment of approximately £2.4m per annum, which is double the original annual target investments for Co-Fund.

“In terms of who is availing of the Funds we have two target groups – one being the companies who benefit from the fund as a source of alternative funding, and one being the private investors for whom the fund is helping stimulate levels of investment activity and crucially getting deals over the line.

“We are not prescriptive on the type of company as long as they have the ability to raise equity of above £250,000 and have managed to engage at least some of the required private investor interest. This tends to rule out complete start-ups and for companies raising this amount of equity investment they have usually demonstrated some market traction (product developed and/or beta sales), or are in an early growth phase (growing from the sub £0.5m turnover level to the £1-£2m level).

“Over time we developed a large group of private investors with whom we have now completed deals, some of whom are accessible through angel networks or syndicates, but the majority tend to operate in a more private way. The vast majority of investors we have invested alongside appreciate the semi passive Co-Fund model (ie we let the private investors set the terms and help them bring deals together) which has been demonstrated by the fact that they have brought more investment opportunities to us directly, sometimes in small informal investor groups which have formed organically from doing initial deals together.

“By following the lead of those companies which have engaged significant private investor interest, we have now invested in a strong and very diverse portfolio of companies.”

NISPO FundsManaged by: E-Synergy

Fund size: £17m (including private sector leverage)

Target investment range: £10,000 to £250,000

The Co-Investment FundManaged by: Clarendon Fund Managers

Fund size: £16m (including private sector leverage)

Target range: £250,000 to £450,000

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The view from NI’s other fund managers

Paul Millar, Chief Investment Officer of Whiterock, says: “We have seen very strong demand for the fund. In the 12 months since we started in September 2012 we had about 250 loan inquiries, but the surprising thing was the size of the firms that are coming to us. I think Invest NI maybe initially envisaged it would be smaller firms that were struggling to get finance but now we’re seeing it right up the curve.

“Around half of the enquiries that come through to us are from firms in the £1m to £25m turnover bracket. Probably a third are through the £25m bracket. So we’re seeing well established companies, most of whom who have been trading more than five years, who are struggling to access finance and are approaching us for some top slice funding to top up their bank funding.

“Demand is not at the pace it was in the first three or four months but the quality of the referrals and enquiries were are getting is much better. We’re getting referrals from accountants, from Invest NI and also directly from the banks. They are normally companies that have a good case for getting additional funding but not enough security.

“There is a bit of a lag between approval and drawdown. But in the first 12 months we’ve approved over 50 loans worth £12m, so the average value of the loans is about £250,000. By the end of September at least 30 loans will have been drawn down worth about £9m.

“We’re only a year through a five year fund and we’ve no reason to think we won’t get through that funding. You can understand that banks are focusing on companies’ ability to repay but also their security. There are opportunities for us within that for us because companies don’t always have the security to support their growth plans. We’re not here to do all of a company’s funding, there is always going to be the opportunity for banks to be the primary funder.

“In terms of pricing we’ve amended the range. It was 8%-12% but is now 6% to 14%. We’ve seen better businesses coming to us so the pricing for them is at the lower end and the majority of the deals now are in the lower end of that range.

“In terms of deals approved the first year has gone well. There are a few deals that have been in the £500,000 range, Domestic Sheepskins, Precision Engineering and MSO Cleland and we’ve just done our first £1m deal with Budget Energy in Derry. The fund was announced as £50,000 to £500,000 but are allowed to go up to £1m. We envisage a majority of deals will be in the original range but there will probably be five or six deals a year that fall between £500,000 and £1m.”

Harry McDaid, Chief Executive of UCIT, says: “The Small Business Loan Fund is an important part of the financing mix and recent loans have taken lending by the fund to over £500,000. Each of the businesses we have approved loans to has demonstrated an ability to target new opportunities, and they have solid plans for growth.

“We evaluate the management, the product, the competitive

environment, but once an offer goes out it is normally very quickly accepted and drawn down. From the first point of contact to money going out is not normally more than four weeks. It is very flexible, it is very responsive, it is very nimble at a time the primary providers of funding are none of those things.

“Similar to the Growth Loan Fund we require that the primary provider of funding has looked at the transaction and declined to participate. These transactions tend to be at risk levels the primary banking sector won’t entertain so the interest rate reflects the risk premium. It is a bit higher priced. But in the transactions we’ve approved so far interest rates have not once been an issue for the prospective borrower.

“Our spreads of 4%-8% for existing businesses and 8% to 16% for new start businesses are not embarrassed by what’s being charged in the banking sector.

“For new start businesses the range is £1,000 to £15,000 and at the top end it is £50,000. A new start can come back and borrow more once a trading track record has been established, up to £50,000.

“The NI Small Business Loan Fund was conceived of two years ago in the recession. The expectation was that there would be a high level of new start business applications. We’ve found we are lending to businesses that are stronger than we thought we would be because during that time the risk appetite bar in the banking sector has gone up – it now excludes transactions that would have been done two years ago. So businesses are coming to us. But we’re not a lender of last resort, we’re not in the business of financing losses or basket cases.

“Interestingly the quality of business we’re lending money to is stronger than would have been anticipated at the conception of the fund. That means we’re doing more business at low rates and rather less start-up funding than was anticipated. Those who have applied are an eclectic mix.

“If it continues at the pace we have seen, we expect to exceed the expectations of Invest NI by the end of this year.”

Growth Loan FundManaged by: Whiterock Capital Partners

Fund size: £50m

Target range: £50,000 to £500,000

Small Business Loan FundManaged by: UCIT

Fund Size: £5m

Target range: £1,000 to £50,000

Bank funding is an essential ingredient necessary to underpin economic recovery in Northern Ireland, which is beginning

to return to a new normal. I call it a new normal because there is no denying that like any other Northern Ireland business, we have had to review what we do and how we do it in the context of today’s economic realities. At the same time business customers still need funding to grow and rightly expect their financial partners to be in a position, when they need them, to support their business development plans.

It’s all about confidence and trust in your bank; confidence for customers enables them to spend time searching out and planning for investment opportunities to grow and expand their businesses. We’re in it together like any successful partnership and First Trust Bank is determined to play its part in making it work. Increasing professionalism does mean due diligence requirements are higher, but access to competent Relationship Managers who know and want to understand your business sector and where you operate within it, results in the right decisions being made for both the customer and the Bank.

As early signs of green shoots emerge in the

Northern Ireland economy, First Trust Bank wants to have a central role in supporting local businesses grow and help deliver sustainable economic growth here.

In support of that strategy, we have recently launched a new £50m Owner Managed Business Fund which compliments our existing Business Support Fund (operating since 2012). Together they are designed to provide viable Northern Ireland businesses with funding at affordable rates over longer committed contract terms, allowing them to plan for and invest in new business opportunities.

While the Business Support Fund focuses on loans below £250,000, the new Owner Managed Business Fund is targeting larger businesses which need to borrow above that level. The scope for the Owner Managed Business Fund has been widened to include new loan, overdraft, invoice discounting and asset finance facilities.

Whilst demand for funding over the past year has been slower than anticipated, we believe that trend is changing. We are encouraged by growing evidence that more companies are increasingly confident about their prospects and are bringing forward new opportunities to develop and expand their businesses. With these

two business fund offerings First Trust Bank can provide competitively priced finance to viable businesses at a reduced interest rate over longer committed contract terms. This is five years in respect of the Owner Managed Business Fund and up to 15 years in the case of the Business Support Fund. Our Owner Managed Business Fund also has the added incentive of having no arrangement fee (usually 1%) if the facility is agreed by 31 December 2013 and drawn down within 60 days of the facility letter date.

We have dedicated Relationship Managers based in our Business Banking team in Belfast who have a range of sectoral specialisms, in addition to branch based Relationship Managers who all offer customers an accessible, competent and professional resource which is open for and wants to do business.

First Trust Bank has a proud heritage, closely associated with supporting family businesses across a broad range of industries. Recognising their role as the engine of the local economy and as one of their key partners, we have deliberately tailored our Business Support and Owner Managed Business Funds to focus our relationship and credit delivery processes on them.

Finally, more important than what I say, is what our customers say about First Trust Bank.

With the help of our Owner Managed Business Fund we supported Northern Ireland’s largest independent tyre retailer, Modern Tyres, a long-standing customer of First Trust Bank, in its recent £1m purchase of eleven outlets from the Republic of Ireland-based Hanover Group which was in administration, a move which has resulted in saving 30 jobs.

Jimmy Byrne, the company’s Managing Director said: “We have always been an ambitious organisation and have strengthened our offering over the years, seeking the right opportunities to expand and widen our reach. Throughout this time, we have enjoyed a strong working relationship with First Trust Bank and are delighted that they have been able to support us at various stages along the road.”

This is a perfect example of the type of strategically important business propositions that we are keen to support and we would encourage other businesses that are considering any investment, to speak with us about their future plans.

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Brian Gillan is Head of Business Banking, First Trust Bank and can be contacted on Tel: 028 9047 9206 or email: brian.m.gillan@aib.ie

By Brian Gillan, Head of Business Banking, First Trust Bank

Back to the future of bank funding

As we approach the fourth quarter, signs of positivity loom large within the economy, offering the prospect of new

opportunities for Northern Ireland’s SMEs. Yet, when it comes to funding these opportunities, few businesses are ready, with the majority worrying where the money will come from.

So, if you’re struggling, you’re not alone. The latest Close Brothers Business Barometer indicates that only 20 per cent of Northern Irish companies are actually benefitting from current trading conditions.

Forty per cent cited that business remains tough compared to last year. Sixteen per cent have identified opportunities to grow – but can’t access the necessary finance – 14 per cent say things are worse, and 10 per cent are finding it particularly difficult to cope.

Nobody wants to be a statistic, but I bet you would want to be one of the 20 per cent already benefitting from the tentative economic upswing. So what are they doing differently?

I believe they’re making the most of what they have, and you can do the same.

Asset based lending (ABL) can turn the resources at the backbone of your business into cash. With that cash you can really set yourself apart from your competitors because business

goals become achievable.Despite these benefits our Business Barometer

indicates that only a third of Northern Ireland’s SMEs know what ABL is, and of that third, almost half don’t know enough to consider using it. Put simply, ABL is a blend of invoice and asset finance. It’s a new string to the Close Brothers Commercial Finance bow and a unique offering in Northern Ireland.

Let’s take a step back and first consider the merits of invoice and asset finance.

According to statistics from the Asset Based Finance Association (ABFA), the past year saw a 10 per cent rise in the sale of invoice finance products across UK industry.

While invoice finance provides you with instant access to the cash your customer owes, it also helps prevent a breakdown in that relationship. To innovate your business and maintain those customers you could use asset finance to invest in products and services – without compromising cash flow.

With that explained, let’s look at how ABL goes a step further towards helping you achieve your business goals.

Essentially, it takes a broader view, by taking into consideration your sales ledger as well as your assets.

Economic growth within the province is driving discussions on how best to ride out the recovery. Harry Parkinson, Managing Director of Close Brothers Commercial Finance (Ireland), believes using asset based lending to tap into the resources we already have is the key to enabling business growth.

Converting collateralto improve cash flow

We recognise that each business is different, and have developed a team of industry specialists with years of experience in specific sectors. They are your best champions, because they know the challenges your industry faces and will do everything they can to help you make the most of what you have.

This approach even extends to lending based on the potential of your business. For example, sales might be slow right now, but you can use the value in your property or stock as collateral.

The key here is flexibility. We take a personal approach, fully explore what you have to offer, and develop a bespoke package that will enable you to achieve your goals. Our local teams are uniquely positioned to respond quickly to new enquiries, while benefitting from the strong funding and capital position of our parent company, Close Brothers Group plc.

So think outside the box if you want to make the most of what you have. You can ride out the recovery, and even better, you can do it as one of the 20 per cent of Northern Ireland’s SMEs that are thriving as a result.

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For more information please contact Close Brothers Commercial Finance on 028 9517 0431 or email harry.parkinson@closebrothers.com

Stephen is a partner in PwC’s Northern Ireland Business Recovery Services and can be contacted at: stephen.a.cave@uk.pwc.com or on 028 9041 5096

How a ‘pre-pack’ can save brand, value and jobs

Some recent, high profile events have focused on an insolvency process dubbed by media commentators as

“pre-pack” – an agreement to sell assets of a failed company prior to a formal insolvency process – with the deal then going through immediately after the appointment of administrators or receivers.

Pre-packs are not without their critics, but most of the negative perceptions occur when an apparently failing business is rescued, seemingly overnight, with what looks like the same business being run as a new company with minimal liabilities and occasionally even by the same individuals. Creditors may assume – not unnaturally – that the insolvency practitioner (IP) and the directors have pushed through a quick deal where they win while creditors lose.

Where this perception occurs, the insolvency profess ion may not have adequately explained why and how a pre-pack process may be the only option to deliver value for creditors, as well as employees and management.

So, how does it work? Surprisingly often, a company or its stakeholders forsees trouble ahead. They may also recognise that insolvency means the likely break-up of the business and the loss of its brand value. Uninterrupted trade is crucial to preserving value, particularly in businesses with key customer contracts in place, or in service companies where intellectual property lies with a few key employees.

When management or stakeholders recognise those signs, it’s not unusual for an IP to be asked to assess options. Where an IP’s review determines that trading the business under an administration process is not possible – perhaps through lack of funding or the adverse impact on customer and supplier relations – a pre-pack that preserves value and jobs may be a real option.

In those circumstances, the IP uses skills traditionally applied to selling a business in administration – researching interested parties, preparing an information memorandum, agreeing confidentiality letters, seeking offers, undertaking due diligence and negotiating a contract. In reality, the only differences between this and a standard corporate finance deal are that it typically happens more quickly, with an insolvency process commencing immediately before the contract is completed.

Adams Childrenswear is one example of how a pre-pack can deliver. Adams was the UK’s largest specialist children’s clothing

retailer with annual sales of £250m from over 300 stores. In late 2006, it suffered a severe downturn in trade, with no one willing to fund ongoing losses.

With leased stores and stock subject to retention of title, the value of the business lay in its brand – but brands suffer heavily from insolvency – and PwC negotiated a deal with retail entrepreneur John Shannon, via a pre-pack administration.

Instead of almost certain redundancy at Christmas, 3,200 people kept their jobs, 273 shops stayed open, the brand remained and a potentially viable business emerged. Where creditors lost out – as is inevitable in these events – they retained the opportunity to continue dealing with the new business.

There is nothing inherently wrong with people associated with the business acquiring it via a pre-pack, providing it is the best deal for the creditors and the workers. Indeed, according to the insolvency professional body R3, secured creditors generally fare better in a pre-pack, realising an average return of 42% compared to 28% in a business sale.

A pre-pack is neither good nor bad – what makes the difference is what goes on behind the scenes to ensure the transaction is the best

possible deal for stakeholders – particularly when the alternative is almost certainly closure. Whilst there are already requirements for IPs in administering a pre-pack, a government review is currently assessing if further measures are appropriate. Whatever the outcome of this review, the challenge for IPs is to get better at explaining where a pre-pack can be the best means of preserving value for the business, creditors and employees, and their role in that process.

By Stephen Cave

Stephen Cave

What is neW GaaP?FRS100 “Application of financial reporting requirements” sets out the applicable financial reporting framework for entities preparing financial statements. Under the new framework existing UK and Irish GAAP preparers will generally have a choice of:

• Voluntary applying EU IFRS.• Adopting FRS101 “Reduced Disclosure Framework” which allows reduced disclosures from EU IFRS in certain, limited, circumstances.• Migrating to FRS102, the new standard containing the detailed requirements that were previously included in the body of SSAPs and FRSs.• Applying the Financial Reporting Standard for Smaller Entities (FRSSE), assuming that the small company size criteria is met.

What should i choose?FRS102 will be the most likely choice for the majority of existing UK and Irish GAAP preparers. Depending on the nature of their operations, entities adopting FRS102 will face many changes in key areas of financial reporting. Undoubtedly, the most challenging issue will be the increased use of fair value measurement – particularly for financial instruments, which will now be recognised on balance sheet. With simple foreign exchange contracts, trade debtors and trade creditors now being classified as financial instruments, this no longer is the sole domain of financial institutions!

Changes to the requirements in respect of business combinations (recognition of more intangible assets such as customer lists and licences), leases and other arrangements, deferred tax (on revaluations and rolled over gains) and investment properties will also need detailed consideration.

imPlementationThis new GAAP is more than just a finance issue, it will fundamentally change the way in which the business is managed and how you communicate with the marketplace. Senior management within an organisation need to be actively involved in the implementation process and understand the impact on the bottom line. An organisation needs to consider:

• What are the possible tax implications?• How will distributable reserves be affected?• Will our existing processes and systems be sufficient?• Are stakeholders aware of the changes?• What is the likely impact on banking covenants?• What is the likely impact on employee remuneration that is linked to profit and loss measures?

A new GAAP is an exciting and challenging prospect; it has been ten years in the making but allows rather less time for entities to get to grips with it. Whilst there will clearly be challenges for entities upon transition, conversion may also provide the trigger to grasp opportunities for simplifying group structures and undertaking further tax planning strategies.

Now is the time to start tackling the financial reporting and commercial challenges which the impending change will inevitably bring!

Following the recent publication by the Financial Reporting Council of FRS102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, we now know the full shape of the new

financial reporting framework to be applied in the UK and Republic of Ireland. FRS102 is the latest in a suite of standards which includes FRS100 and FRS101.

The release of this suite of standards, the replacement of all existing UK accounting standards, represents the culmination of ten years’ consultation on how best to bring UK and Irish GAAP (Generally Accepted Accounting Principles) up-to-date.

The key challenges in that period have been to maintain consistency with the requirements of company law and to achieve proportionality with the needs of the users of financial statements.

The new framework is applicable for accounting periods commencing on or after 1 January 2015 and work must begin in earnest as a transition balance sheet will be required at 1 January 2014 (for 31 December year ends) – just a few months away!

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For further information please contact Dominic Mudge, Director, KPMG on Tel: 028 9024 3790 or email: dominic.mudge@kpmg.ie

Time to get ready for ‘new GAAP’KPMG’s Dominic Mudge on why companies need to understand the FRS102 accounting standard.

Eighteen local companies have made it into the 2013 Deloitte Fast 50 Technology Awards Programme, which

ranks the fifty fastest growing technology companies in Ireland.

This is the best showing to date from NI companies since the awards were launched 14 years ago, proving the strength and depth of the local technology sector.

Enterprise Minister Arlene Foster has launched a pilot project aimed at identifying economic development

opportunities in Omagh and Fermanagh by using technology to capture, analyse and manage data to increase competitiveness.

Intensive data analysis will be used to create a so-called “Smart Region” in the districts currently covered by Omagh and Fermanagh Councils, which will become one area as a result of the Review of Public Administration.

The Minister said she was excited by the Smart Region project, which is designed to “change the narrative” for the South West of the province.

“We are living in a new world and new thinking and new actions are needed to create the jobs we need to build a sustainable future. The starting point lies in understanding the importance of data in learning from the past and present to shape the future,” she said.

“Data can be used to help us understand more comprehensively what is happening in the region, why it is happening and, most importantly, what needs to happen next. It will inform what needs to be done to achieve the mission of making Fermanagh and Omagh a Smart Region.”

Those making the shortlist were Acksen Ltd; Aetopia Ltd; Core Systems; Etain Limited; Export Technologies; Farmwizard; First Derivatives plc; Leaf Consultancy; Learning Pool; Novosco; PathXL; Rehabstudio Ltd; Seopa Ltd, Sixteen South; 8over8limited and Texthelp Systems Ltd. This group were joined by newcomers to the Fast 50 Catalyst2 and Instil Software.

The exercise is timed to coincide with the planning for the next round of EU Structural Funds, which will fund activities from 2014 – 2023.

Nick O’Shiel, CEO of Omagh Enterprise Company added: “We had to come up with something that resonated with the area, we can’t just adapt a model from somewhere else. In two years time we will have evidence-based research

NI Tech sector makes its biggest impact to date on Deloitte Fast 50

Omagh and Fermanagh aiming to get Smart

Final placings and growth levels will be revealed at the awards ceremony to be held on Friday 8th November in Titanic Belfast.

David Crawford, partner in the Deloitte Belfast office, said: “This is a really exceptional result for the NI technology industry with more local companies than ever before included in the top 50. It’s fantastic to see newcomers such as Instil Software and Catalyst2 join the list for this year, as well as Novosco and Texthelp Systems Ltd claim their spots for the 14th year running- an amazing feat! We’re excited to find out the final placings at the award ceremony next month, and we’re especially delighted that in NI’s biggest year to date, the event will be taking place right here at Titanic Belfast.”

The programme, which is being supported this year by Invest Northern Ireland, is open to all technology companies, headquartered in Ireland, north or south. The final ranking features technology companies that have demonstrated innovative strategies, sound management practices and marketplace vision, enabling them to achieve high revenue growth.

For more information on the Deloitte Fast 50 Technology Programme please log onto www.fast50.ie

and know what our specialisms are so we can plan for future funding requirements.”

“Long term what I’d like to see come out of it is the region getting really good at handling data. This is our entry into a whole new world of data flow and information management. We all know there is so much data floating around – our challenge will be to get good and finding value in it.”

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Arlene Foster launched the project with Martin Maguire from Fermanagh Economic Development Organisation and Nick O’Shiel from Omagh Enterprise Company

Pensions & Wealth

Management

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The OFT has proposed a set of reforms to the £275bn market for defined contribution workplace pensions

after its market study found savers in schemes containing £40bn of savings could be getting poor value for money.

Around five million people are saving into DC pension schemes and this is expected to increase by up to nine million savers over the next five years, following the Government’s introduction of auto-enrolment last October.

In its report the OFT acknowledged that pension products are complex and that this contributes to the difficulty of making the right choices about pensions, for individual savers and employers.

But the OFT also found employers, which have the responsibility of deciding which pension scheme to choose for their employees, often lack the capability or the incentive to

assess value for money. It believes this problem has the potential

to grow during auto-enrolment as smaller employers, with limited resources, are required to provide schemes for their employees.

The OFT said these weaknesses had already created a risk of savers losing out in two parts of the market. First, old and high charging contract and bundled-trust schemes, containing around £30bn of savings, may not be delivering value for money. Second, smaller trust-based schemes, containing around £10bn of savings, are at risk of delivering poor value for money due to low levels of trustee engagement and capability.

In addition, the OFT is concerned that similar problems might occur in the future without measures to improve the scrutiny of pension schemes on behalf of savers.

Clive Maxwell, OFT Chief Executive, said: “Automatic enrolment has the potential to

The Office of Fair Trading and the Pensions Regulator have agreed a set of reforms designed to ensure millions of savers are getting value for money from their workplace pensions. Ulster Business takes a closer look.

OFT taking a tougher stance on “poor value” pensions

Many Northern Ireland companies are now preparing for staging dates during 2014, and we are seeing a lot of different solutions being considered – it is not a “one size fits all” situation.

Experience of those companies that have already passed their staging dates is that the number of employees choosing to opt out is low. Initial DWP estimates suggested that, of the 1.6 million people enrolled in company pension schemes, just 9% had chosen to opt out. Whilst more recent surveys indicate that the level of opt-outs may be higher than the DWPs initial statistics, they still indicate that opt-out rates are much lower than many employers had anticipated.

After initial marketing campaigns, insurance providers are starting to scale back on the levels of support that they can provide to employers compared to what was available last year. Capacity constraints are also emerging as more schemes approach their staging dates. This will result in longer lead in times to set up arrangements, and employers are at risk of not being able to appoint their provider of choice, or missing their staging date, if they do not start the process to establish a suitable workplace pension arrangement in good time. The Pension Regulator recommends that employers allow 12 to 18 months preparation time in advance of their staging date.

Quite apart from determining which pension provider to use, employers also need to make decisions in a number of important areas such as whether to contractually enrol or automatically enrol new recruits and which of the various tests to adopt for satisfying the new rules on statutory minimum contribution

Finally, the successful implementation of the new automatic enrolment requirements will require changes to be made to HR and payroll processes once decisions around the pension provision has been made. Having quality payroll systems and processes is paramount in ensuring a smooth implementation and subsequent operation of the pension arrangement.

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Automatic enrolment – one year on

expand and change the market for pensions in the UK for the better. Whether people are starting pension-saving for the first time through automatic enrolment, or have already been saving for years, it is vital that they are saving in schemes which deliver good value for money.

“We have found problems in relying on competition to drive value for money for savers in this market. We’ve therefore worked closely with the Government, regulators and industry to agree a set of measures that we believe are an important step in helping to ensure that savers get better outcomes. It is important, particularly given that automatic enrolment is already under way, that these measures are implemented rapidly.”

The reforms proposed include new enforcement powers for the pensions regulator and an audit of high charging contract and bundled trust schemes – although it is not pursuing a cap on fees at present. Companies in industry have also agreed to establish independent governance committees.

Commenting on the workplace pensions study, business organisation the CBI said business providers and savers all needed to up their game to ensure good quality.

“Governance and transparency are key to making auto-enrolment work, so the OFT is right to identify these as issues that should be addressed by the industry,” it said.

“Small businesses need help to make decisions on the best scheme for their employees, but this mustn’t result in additional red tape and expense.

“Many businesses already provide pensions at well above auto-enrolment level, and must be allowed to continue to make their own judgements about what is best for them and their staff.”

Pension providers acknowledge that the Auto enrolment policy has brought radical changes to workplace pensions, but say employers will need to get over the challenges of implementation as it will rapidly become the new normal.

Tim Jones, CEO of the National Employment Savings Trust (NEST) said: “Whilst the early stages have primarily affected large employers, the numbers of employers coming under the duties increase dramatically in the next few months. We all have to up the pace to be prepared for much higher volumes and to meet the challenges implementing automatic enrolment brings.”

Laurence Baxter, Head of Policy & Research at the Chartered Insurance Institute (CII) added: “Employers are not pension experts. Advisers can step into this space – many have developed professional expertise in the area of workplace pension schemes, assessing the products and support for employers. Particularly Chartered financial planners are ideally placed to assist an employer to choose the right scheme for them. They may also provide services to employers on an on-going basis to help with the admin of automatic enrolment.”

The Pensions Act 2008 marked a major shift in workplace pension provision from a voluntary to a so called ‘soft

compulsion’ regime. Commencing from 1 October 2012, and being phased in over a six year period, all employers will be required to automatically enrol employees who meet certain age and earnings criteria into a workplace pension arrangement, although employees will be allowed to subsequently cease membership.

Every employer is required to comply with its new duties on automatic enrolment by its “staging date”. This is based on the number of employees on the payroll. By the end of October 2013, only those employers with more than 500 employees will have been required to comply. Consequently, automatic enrolment has not yet applied to most Northern Ireland employers, given their smaller size.

Companies employing from 500 down to 50 employees will reach their staging dates between 1 November 2013 and 1 April 2015.

Stuart Faloon, who leads Mercer’s Corporate Consulting business in Scotland and Northern Ireland, gives his view on the progress of the new auto enrolment pensions policy.

Pensions are a notoriously difficult subject. The problem being that most of us who are lucky enough to reach retirement

will have been saving for a very long period, normally forty years or so and thus have been subject to a vast amount of legislation over that time. It is not that the politicians are obsessed with Pension legislation, more a case of trying to develop it based on changing circumstances.

One quite recent and welcome change has been the introduction of “flexible drawdown” for those who are retiring. This relatively new option allows those with sufficient secure pension, a minimum of £20,000 per year, to take as much from their residual fund as they wish. The withdrawals are of course taxable as deemed income so HMRC don’t lose out. This new flexibility is an important addition for those who have built up reasonable pension pots and have sufficient income from their pensions to maintain their standard of living.

So the first key issue is to establish if there are sufficient pensions in payment or that can be secured to give at least the minimum of £20,000 per annum income. This may comprise of state pension, private pensions, annuities and or employer pensions in payment. The “surplus” funds, normally those not already drawn upon, can then be used or extracted to the benefit of the owner.

Why would one consider drawing these benefits when they will be subject to income

tax? Well for many the answer is simple – keeping the funds in, for instance, an existing “drawdown” contract has the problem of a 55% tax charge on the lump sum payment on death. As well as that, how else can funds be extracted as any pension mechanism will have some tax consequence for the recipient? Of course keeping the funds in the pension (un-crystallised) contract without drawing any benefit, including the tax free cash, has the upside that the full fund may pass to the next generation or spouse without any tax. Whilst this may be attractive to some, most people want to see some benefit of their pension savings during their own lifetime. Furthermore most people want their tax free cash entitlement!

Of course if you can afford not to draw these benefits during your lifetime passing them to your family may be the best thing to do. Indeed with a little care and the use of suitable trusts the funds can become very tax efficient for the next generation and beyond. The key is to ensure you take professional advice from someone who is both qualified and experienced in this area.

The use of these types of more complex pension arrangements also will normally require on-going investment advice and for those with lower risk appetite it may of course be better to use the more traditional products such as annuities. The range of options at retirement is bewildering and decisions should not be rushed. Act in haste and repent at leisure!

It is wise to look at all the alternatives available and then carefully assess the best course of action based on your individual circumstances. There is no doubt that annuity rates currently look quite poor but there is no guarantee that they will improve either.

Investment conditions can also have a major impact upon pension funds. This is particularly true with increased life expectancy and it is wise therefore to consider the impact of inflation. With many people retiring in their early sixties they may live for twenty, thirty or more years, thus the long term nature of retirement must be factored into this planning.

Flexible drawdown offers the potential to “take it all” but this must be done with careful planning and one eye fixed firmly on your long term financial security. You also must take account of your overall position and assets as this will have a major bearing on whether this type of pension is suitable for your individual circumstances. There is no point jeopardising your long term security for short term gain.

68 OCTOBER 2013

PENSIONS & WEALTH MANAGEMENT

The content of this article is the writer’s opinion on the current state of the financial markets. The opinions in this article should not be taken as fact and should not be taken into account when making investment decisions. Ralph McGuicken is Director of Financial Planning with Bloomfield Corporate Consultancy and can be contacted on 028 9045 1688 or by e-mail: ralph@bloomfieldcorporate.com

Using the new flexible drawdown rules could be a winner for many people who are retiring, writes Ralph McGuicken, Director of Financial Planning with Bloomfield Corporate Consultancy.

Can you afford to take it all?

PENSIONS & WEALTH MANAGEMENT

By Glenn Branney, Chartered Financial Planner, Barclays Wealth and Investment Management.

To protect or not to protect?

HM Revenue & Customs (HMRC)estimate that next April’s pension lifetime allowance* (LTA) cut from

£1.5m to £1.25m could affect 360,000 pension savers. The two new pension protection options to lock into a higher allowance, while welcome, may serve to complicate decision making. These are decisions that individuals may not realise are crucial to their future retirement planning strategy. Making the wrong decision could potentially expose up to £250,000 of pension savings to a 55% tax charge. Private client advisers should be looking to identify who is at risk from the cut, articulate how individual protection and fixed protection can save clients tax by limiting exposure to the lifetime allowance charge and then take action before April 2014.

So, who is caught in the LTA net? HMRC estimate that 30,000 people will be immediately affected by next year’s LTA cut, with 360,000 expected to break this limit over the next ten years. This takes the impact of the LTA way beyond the 1% of pension savers envisaged when it was introduced. A £1.25m limit may not set alarms bells ringing for many just yet, but with a frozen allowance a distinct possibility for those within sight of retirement, savers don’t have to be close to £1.25m now for it to become

a problem as investment growth can quickly accelerate the size of the pension pot.

The table below shows the current pension pots that will grow to £1.25m over various terms to retirement based on different growth rates, assuming that contributions stop now.

For example, someone ten years from retirement with a current pension pot of around £700,000 will exceed their allowance if their pot

grows at 6% a year – even if they stop paying into it now. Of course, growth could be higher or lower than shown in the table – depending on the client’s investment strategy and/or charging structure of their pension contract.

It’s even trickier where defined benefits are concerned. Few people understand how valuable a defined benefit pension is – or how it’s tested against the LTA. Many would be surprised to learn, for example, that their £25,000 per annum paid-up pension from a previous job already eats up £500,000 of their allowance. Adding deferred member revaluation up to retirement, at say 3.3% over ten years, takes the pension up to £34,590 – using up almost £692,000 of the LTA.

Quite apart from the need to consider ceasing, or cutting back on, pension saving after April 2014, there are always other non-LTA related pensions issues that require advice e.g. consolidation of legacy pensions, establishing alternative tax wrappers for future savings and/or exploring the most efficient ways to transfer wealth to family. With the changing rules, there is a lot to think about, and a lot to talk about, before April 2014.

* The Lifetime allowance (LTA) simply limits the amount of savings that can be built up in a tax-advantaged environment

Barclays does not provide tax or legal advice. We therefore recommend that you obtain independent tax and legal advice tailored to your needs.

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

Years to go/growth 4% 6% 8%

3 £1,112,000 £1,050,000 £993,000

5 £1,028,000 £934,000 £851,000

10 £845,000 £698,000 £579,000

Summary – the two new protection optionS compared

Fixed protection 2014 Individual protection

Personal LTA based on benefit value at 5/4/14 (benefits must be valued at over £1.25m on this date and the LTA will be capped at £1.5m)

LTA of £1.5m

No ‘benefit accrual’ after 5 April 2014Further contributions/defined benefit accrual allowed

Individuals must apply by 5 April 2014 Applications open to 5 April 2017 (subject to confirmation in Finance Bill 2014)

Cannot have with primary, enhanced or fixed protection 2012

Cannot have with primary protectionConsultation over holding alongside enhanced protection

Can have alongside individual protectionCan have with fixed protection 2012 or 2014 (although fixed protection will take priority over individual protection)

Northern Ireland has a strong cluster in financial services technology. There is a formal Capital Markets collaborative

network involving companies like Citi, the New York Stock Exchange (NYSE), Fidessa, Kofax and First Derivatives , who are coming together to work on addressing major issues such as building the skills required in the economy in Northern Ireland as well as sponsoring PhD projects at the two local universities. The researchers at the universities are working on some of the most interesting problems facing the financial services industry and their results are very promising.

One area being examined is one of the most interesting technological challenges in financial services, High Frequency Trading (HFT). HFT is where financial institutions use computer models and algorithms to slice up orders from clients and feed them in to the markets in fractions of seconds. It is where speed really becomes important. If one market participant can get the data necessary to make a decision faster than another, has the computer power to process that data and can get their buy or sell order back to the exchange before others, then they have an opportunity to take advantage of the imperfections in the market and make some money from the transaction; this is called arbitrage.

HFT technology solutions bring together the

disciplines of both hardware and software. A lot of money has been invested in trying to bring the latency on the systems as a whole down to near zero. Microseconds make the difference between success and failure. Some of the research that is being undertaken is on how to optimise code, spread the computing power across multiple processing units, and move the processing on to the hardware using fully programmable gate arrays (FPGAs). This is leading edge technology and it is developing a skills base in Northern Ireland that will be of great value to the local economy now and in the future.

Institutions that engage in HFT are also looking at ways to improve network performance. The first microwave links between Chicago and New York and between London and Frankfurt have come online and shaved off a few more of those valuable microseconds. There is talk of drone and balloon technology to install a wireless network across the Atlantic connecting the two major hubs of London and New York. This is technical innovation being driven by the markets.

There is a downside to this technology arms race. The more participants that move in to the HFT space the more difficult it becomes to find and exploit the market price differentials as the volatility is smoothed out in the market. The race to zero latency has had the perverse effect of reducing the profitability of the high frequency

traders as the opportunities for arbitrage are harder to find and the costs of maintaining the technology advantage continue to increase.

Industry regulators and the financial exchanges where business is transacted are also becoming increasingly interested in HFT. The regulators have concerns that an increasingly large portion of the market has become machines trading with machines and that this could lead to episodes of instability such as the notorious ‘flash crash’ of 2010 which was traced back to HFT computers. There are proposals in several jurisdictions to tax HFT to reduce its profitability further. And exchanges, concerned about the impact of some participants having a perceived advantage over others, have in some cases started to batch up orders and randomise them before processing to remove the advantage of being first in to the market.

Addressing these concerns will ensure technology will continue to play a huge part in financial services. Northern Ireland has successfully carved out a niche in that particular sector. The universities, government and the network of financial services institutions that we have here will drive innovation in this important area and we will continue to benefit from the heritage of engineering that we have in Northern Ireland. The race to zero latency is not a zero sum game as the skills that we will have created will provide an ongoing legacy.

72 OCTOBER 2013

The race to zeroMATRIX member and Director at Citi John Healy explains how technology being researched in Northern Ireland is driving the financial services industry around the world while addressing concerns of financial regulators.

If you think your company has what it takes to be a Million Maker, then why not sign up for next year?

Contact Arlene Creighton for more information at arlene.creighton@princes-trust.org.uk or Tel: 028 9089 5019

Million Makers reach halfway point

The Prince’s Trust Million Makers competition launched just three months ago, supported by Ulster Business, has reached the halfway point in its efforts to help raise £1m

for the charity nationally.Seven of Northern Ireland’s leading companies signed up for the

Million Makers challenge of converting a £1,500 investment into a fundraising profit of £10,000.

Determined to beat last year’s total of £80,000 raised in just six months, activities so far have included a Barbeque and Duck Race along the Lagan Towpath organised by Asidua; JCI Belfast invited dog owners to their Strut Your Mutt event, giving them the chance to win a canine modelling contract and other great prizes; and

Shredathon with Ulster Bank: James Carson (left) from ShredBank with Stephen Cruise, Ulster Bank.

CORPORATE RESPONSIBILITY

Adelaide Insurance hosted a successful Vintage Tea Party. A Northern Ireland-wide community ‘Shredathon’ organised by

ShredBank has commenced at seventeen Ulster Bank branches offering secure shredding services for free for their customers and local businesses. Ulster Bank has kindly made a donation at each site while working hard on their own initiative for the competition.

The next three months will see a huge effort from all of the participants with a wide range of fundraising activities planned including White Collar Boxing from Adelaide Insurance and a Private Dinner at Crumlin Road Jail hosted by Abbey Bond Lovis.

Jo Watson, Head of Private Sector for The Prince’s Trust is delighted with the stamina and creativity demonstrated by all of the companies.

“Yet again, our teams are really upping their game with each business vying for top position at the final event in three months time,” she says. “If they can keep the momentum going, I am hopeful that we will outstrip the huge amount of money raised last year that has allowed us to continue our vital work helping some of the most disadvantaged young people across Northern Ireland.”

The Asidua Team make a splash with their Duck Race. Adelaide Insurance Vintage Tea Party (L-R): Laura McCollum with Gloria and Lauren Geddis.

JCI’s Strut Your Mutt: Dog owner’s had a chance to win their canine a modelling contract.

Executive MotoringBy Pat Burns

Sponsored by

Extra comEs as standardwww.fleetfinancial.co.uk

Volkswagen’s latest Beetle is longer, wider and lower than the previous Beetle, which, slightly confusingly, was called New Beetle. This new Beetle, which has dropped the ‘New’ off its

title is more aggressively styled and bears a closer resemblance to the original Beetle.

The 2013 Beetle is still a four seater but has a larger boot and inside the cabin, the Beetle’s designers created a modern, practical and distinctive appearance with easy to identify controls. Certain features, such as the glovebox and colour accent panels (on Design models) hark back to the original. This latest Beetle also offers a better driving experience and gives the driver better feedback as the previous model suffered slightly from a lack of steering response.

Three ‘standard’ trim levels are available – Beetle, Design and Sport. A wide range of innovative optional equipment is also available, ranging from Keyless Access through satellite navigation systems to bi-xenon headlights with LED daytime running lights – all of which are available for the first time on a Beetle. Another new option is the Fender sound pack. Developed in conjunction with the legendary electric guitar firm of the same name, this audiophile’s delight offers a 400 W output and a subwoofer, along with switchable three-colour illumination surrounding the front loudspeakers.

A choice of four engines is available: three petrol – a 1.2-litre TSI 105 PS, a 1.4-litre TSI 160 PS and a 2.0-litre TSI 200 PS – and one 2.0-litre TDI 140 PS diesel.

As well as being economical and environmentally sound, the Beetle is also built to be one of the safest cars on the road thanks not only to features such as standard ESP and four airbags but also a laser-welded and galvanised body structure which has one of the highest torsional rigidity values in the segment at 26,000 Nm/˚. This has already been recognised by Euro NCAP which has awarded the new car its top five star safety rating. In addition the 1.4-litre 160 PS and 2.0-litre 200 PS feature standard XDS electronic differential lock, as fitted to the Golf GTI.

76 OCTOBER 2013

MOTORING

Beetle gets aggressive

78 OCTOBER 2013

MOTORING

Vauxhall’s executive model, the Insignia, has been a great success, leading the mid-size sector in Europe, beating the Passat and

Mondeo into second and third places. To ensure this continues and with Vauxhall Opel hopes of becoming Europe’s best selling brand, the Insignia has been heavily revised.

Available as a five-door Hatch, four-door Saloon and Sports Tourer estate, the new range now starts at just £16,279, nearly £2,000 less than entry into the outgoing line-up.

There are four new engines, including: a 99g/km 140PS 2.0 CDTi offering large cost benefits to fleet and high-mileage drivers; an all-new 1.6 SIDI 170PS Turbo petrol; and a new 250PS 2.0 SIDI Turbo petrol. Existing diesel units have also benefited from refinement improvements.

An all-new infotainment system, incorporating Bluetooth-operated internet connectivity, an 8-inch touchscreen, and 3D navigation and voice control, has full smartphone compatibility and allows drivers unrivalled communications while on the move. A DMB (Digital Media Broadcast) radio is now standard across the range.

Since its launch in 2008, the Insignia has largely dominated the mid-size sector and launched the eye-catching design philosophy that has permeated through all subsequent new Vauxhalls. The Insignia’s classic exterior lines remain for the new

range, refreshed styling at the back and front of the car, but inside there are important changes to its instrument cluster and centre console design, as well as improvements to control-functionality.

The Insignia’s range has been simplified, too. There are now eight trims (down from 14 in the outgoing line-up), ranging from Design to Elite, with a mixture of new models that will appeal to both retail and fleet buyers. And like all Vauxhalls, the new Insignia range will come with Lifetime Warranty, allowing first owners peace of mind for as long as they own the car, up to 100,000 miles.

While the Insignia has increasingly found favour with retail buyers, much of its success has been in the fleet market with 80 per cent of Insignias going to business customers.

Vauxhall’s combination of more efficient engines, premium design and state-of-the-art infotainment systems will certainly prove tempting to both company car drivers and fleet decision-makers alike.

The biggest change existing Insignia customers will see when they sit in the new car is a completely re-designed centre console and instrument cluster. The centre console has been simplified and now has fewer buttons for more intuitive operation of common functions, such as air conditioning and infotainment, while the instrument cluster has new dials and a fresh,

high-tech look.Optional across the range is an 8-inch screen

infotainment display (up from 5-inches in the outgoing range) and a new, upgraded instrument cluster with an 8-inch, high-resolution colour display. The cluster incorporates two outer dials showing fuel and revs, while in the centre sits a speedometer that can be displayed in analogue or digital form, or changed to show functions such as smartphone or audio use, or navigation.

The 8-inch infotainment display has touch-screen functionality, allowing drivers to access all functions and sub-menus such as radio stations, song titles, smartphone connection or 3D navigation in an intuitive and safe way. Its illuminated, touch-sensitive surface reacts immediately to finger movements, with even individual letters and numbers being accessible via this method. Up to 60 favourite menus can be stored from all functions and apps, available next year, and can also be downloaded via the car’s Bluetooth-connected internet.

In addition to button, touchscreen and touchpad operation, Insignia drivers can also control the infotainment system via re-designed controls on the new-look steering wheel. The advanced voice recognition function can also be operated by a single push of a button on the steering wheel.

Insignia revised to ensure sales success

OCTOBER 2013 79

MOTORING

Keep on truckin’Lisa Kelly (right) from the hit TV series

Ice Road Truckers is pictured with Libby Morgan from RSA Insurance

at Truckfest Ireland 2013. The event, which came to Ireland for the first time last year, was held at Balmoral Park, Lisburn in August. RSA Insurance was principal sponsor of the event, which attracted thousands of participants from across the haulage industry and featured displays from the industry’s finest vehicles, together with hair-raising performances from the FMX Motorcycle Stunt Team and the world-renowned Monster Trucks.

Speaking at the event Libby Morgan explained “RSA Insurance (NI) is exceptionally proud of its involvement and commitment to the local transport and logistics sector and we’re delighted to support Truckfest Ireland as it continues to grow on this side of the Irish Sea”.

Alex Debogorski and Lisa Kelly (both centre) from the hit TV series Ice Road Truckers are pictured at Truckfest Ireland with Nuala O’Reilly, Geraldine McGrattan, Annie Cullen and Libby Morgan from RSA Insurance.

80 OCTOBER 2013

MOTORING

Charles Hurst Group has just opened the doors of its new, £1 million, state-of-the-art car showroom, which has been designed and constructed to showcase Ferrari and Maserati brands.

The high-tech new showroom has been built to exacting Italian standards and features floor-to-ceiling windows, light-diffusing materials and an eco-friendly, carbon-cutting heating system that makes it one of the most sustainable buildings ever built in Northern Ireland.

It also features a dedicated “Atelier” – an intimate environment where customers are invited to use their creativity and imagination with a décor designed to reflect the quality and spec of Ferrari and Maserati. It also includes a ‘configurator’ which allows customers to create and visualise their dream car from a choice of exterior colours and interior materials.

Colin McNab, Operations Director at Charles Hurst, said the new showroom would transform people’s perceptions about the process involved in buying a car.

“Belfast is now officially home to the ultimate in super-luxury motoring and Charles Hurst Group is proud to be the first dealership in Ireland to unveil what is, without doubt, the best, world class facility from which to showcase the best car brands in the world.

“Customers with an eye for style, sophistication, and, above all, exclusivity will recognise these qualities in the Ferrari and Maserati brands, and I am thrilled that this new showroom at our Boucher Road, Belfast base has been successfully designed with these qualities in mind.”

Richard Stinson Franchise Director of Ferrari and Maserati added: “Ferrari and Maserati are premium, high-performance brands and its customers expect the best. This new, £1 million facility delivers this on all fronts.”

Charles Hurst unveils £1m luxury car showroom

Matteo Torre, regional manager of Ferrari North Europe; Colin McNab, operations director at Charles Hurst; Richard Stinson, franchise director of specialist cars at Charles Hurst and Peter

Denton, regional manager of Maserati North Europe.

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CT Series fuel consumption and CO2 fi gures: Urban 68.9 – 76.3 mpg (4.1 – 3.7 l/100km), extra-urban 70.6 – 76.3 mpg (4.0 – 3.7 l/100km), combined 68.9 – 74.3 mpg (4.1 – 3.8 l/100km).

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CHRIS DAVIS EDDIE CULLEN SEAMAS KEATING

LoRRAINE MASoN STEVEN bRADEN

ALANA CoYLE JUDITH JoNES URSULA LAVERY

GREGoRY GoUT

82 OCTOBER 2013

Chris Davis has been appointed Chief Operating Officer of Ulster Bank, joining from royal Bank of scotland where he served as Chief Operating Officer for the Uk Corporate Banking Division. Prior to joining rBs, Chris worked as an account Director in kPMG and was part of the first ever graduate intake to natWest it in 1987.

eDDie CUllen has been appointed Managing Director of Corporate and institutional Banking at Ulster Bank. eddie joined the Bank in 1993 and has worked in corporate and international banking in ireland in addition to roles in natwest/rBs subsidiaries in the Uk. eddie trained as a chartered accountant in kPMG Dublin and is a member of the Board of Financial services in ireland.

seaMas keatinG has been appointed a new associate Partner with FPM ChartereD aCCOUntants. a qualified Chartered accountant and a licensed insolvency Practitioner in both the Uk and ireland, he joined FPM in 2006. seamas has graduated through the various roles of Manager, senior Manager, Director and now to associate Partner in the FPM recovery and restructuring Department.

lOrraine MasOn has joined eirCOM as service Desk Manager from northgate, where she spent several years in the roles of incident Manager and service Desk Manager. More recently she had been working in the Client services Management team where she played a pivotal role in gaining and then retaining isO 20000 accreditation for the Utilities division. steven BraDen has joined eirCOM as a service Desk analyst from Bt where he was on-site support for a multitude of clients including the Belfast trust. steven has over 20 years it industry experience, with a wealth of knowledge spanning across vOiP technologies to Cisco based networking skills. GreGOry GOUt has been appointed Unified Communications engineer at eirCOM. Originally from France, Gregory has for the last six years worked as a senior network engineer in aggreko in Glasgow, working across numerous Cisco technologies including vOiP and iPt.

alana COyle has been appointed associate Director and head of retail of CBre in Belfast, where she is responsible for a wide range of retail work, including acquisitions and disposals in shopping Centres and high street locations throughout northern ireland. she graduated from the University of Ulster in 2004 and has previously worked for lisney and Osborne king.

JUDith JOnes has been appointed assistant solicitor in the expanding Private Client Department at Cleaver FUltOn rankin sOliCitOrs. Judith holds an LLB Law and Spanish (Joint Hons) from Queen’s University. Prior to joining Cleaver Fulton rankin, Judith worked in a family practice in Belfast, managing the Private Client Department.

MOy Park has appointed UrsUla lavery to the Moy Park executive Board as technical Director for europe with responsibility across Moy Park’s European business. She will play a key strategic role in establishing an integrated europe-wide technical organisation, bringing extensive knowledge and expertise to all business units and functions currently operating across europe.

APPOINTMENTS

MICHAEL McILWAINE RUAIRI ROWAN JOHNNY CROOKS

JOYCE McFAUL LIANNE McCONVILLE DAVID McNEILL

CIARA McCUSKER DON LESSON

OCTOBER 2013 83

Oxfam Ireland has appointed mIchael mcIlwaIne as head of retail with responsibility for the day-to-day organisation of Oxfam’s network of 51 shops throughout Ireland. Originally from Belfast, michael has spent his entire career in retail, including management roles with the likes of Barrett’s Priceless division.

ruaIrI rOwan has been appointed Policy Information Assistant at chIldren In nOrthern Ireland where he co-ordinates CiNI’s Child Policy Information Service. Ruairi was previously employed in the voluntary sector as a fieldworker promoting the annual Day of Reflection in 2012 and 2013.

JONNy CROOkS has recently been appointed as area manager for Belfast based OgIlvIe Fleet ltD. within his role he is responsible for driving growth for the company in northern Ireland through achieving and maintaining sales objectives. Jonny spent the last four years in a senior role within the local contract hire and fleet management industry.

JOyce mcfaul has recently joined OgIlvIe fleet ltd as Customer Services executive, team leader. Joyce is responsible for all aspects of office management including the provision of customer quotations, vehicle procurement and delivery. Joyce’s previous experience included five years in sales support and as a key Account Co-ordinator in the fleet management sector.

lIanne mccOnvIlle has been appointed Customer Service executive with OgIlvIe Fleet ltD. lianne will support the sales team by ensuring that customer queries are followed up and service expectations are fulfilled. She will assist with telesales and marketing initiatives providing full administrative back up to the CSe team leader.

davId mcneIll has joined OgIlvIe fleet as Area Manager. David has responsibility for growing Ogilvie’s business throughout Northern Ireland. With over 25 years in the motor industry in both corporate sales and fleet management, david has extensive experience across all vehicle manufacturers and suppliers.

mccOnnell ChARteReD SuRveyORS has appointed cIara mcCuSkeR as Associate Director and head of Property Management. Ciara has over 12 years property management experience and specialises in compliance including asbestos, fire and general health & safety legislation.

DON leeSON has been appointed director of Operations at the CONSuMeR COuNCIl. Don has extensive experience in organisational development, human resource management, financial management and corporate governance. he has worked at the labour Relations Agency, the Northern Ireland human Rights Commission, the equality Commission for Northern Ireland and Investors in People uk.

JOy taggart has been appointed global Inside Sales Manager at heARtSINe teChNOlOgIeS. with over seven years of experience in sales and marketing in the healthcare technology industry, Joy will be responsible for the internal sales relationship management of all customers in heartSine.

JOY TAGGART

APPOINTMENTS

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1. Pictured after the refurbishment of Grant Thornton’s three floor Clarendon Dock office are Senior Designer Lisa Allen and Grant Thornton partner Gareth Neill. The creative workspace has meeting rooms on the themes of Harry Potter, Star Wars, Jurassic Park and Willy Wonka Emporium.

2. Kieran Harding, Chief Executive of Business in the Community joins Catherine Mason and Kevin Wallace from Translink, Maura Thompson from Malone College and pupils Clodagh Marie McDonnell-Byrne and Callum Creaner at the launch of the Translink Corporate Responsibility Review 2012/2013.

3. Irish financier, Dermot Desmond, the original promoter behind Dublin’s IFSC, is pictured with Belfast Harbour chairman Len O’Hagan after addressing an audience of business people in Belfast Harbour Office at an event to mark the Harbour’s 400 years.

4. At the launch of First Trust Bank’s new £50m owner managed fund are Brian Gillan, Head of Business Banking; Jimmy Byrne, Owner of Modern Tyres, who has invested £1m into the family owned tyre retailer with support from the Owner Managed Business Fund; and Gerry McGinn, Managing Director, First Trust Bank.

5. Excellent customer reviews have ranked all three hotels in the McKeever Hotel Group in the top 10% of the world’s hotels according to TripAdvisor. Pictured are Martin Toner, Corr’s Corner Hotel; Eugene McKeever, Managing Director; Stella Grant, Adair Arms Hotel; Martin Boon, Dunsilly Hotel.

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6. Pictured at the ‘Growing Something Brilliant’ conference hosted by then Northern Ireland Chamber of Commerce in partnership with Airtricity, are David Manning (Airtricity), Mark Nodder (NI Chamber of Commerce), Leigh Meyer (Citigroup) and David Dobbin (Dale Farm). The event aimed to inspire more businesses to set up, grow and export.

7. SERC has become the first college in the province to offer a diploma in the sale of residential property in collaboration with local estate agent Templeton Robinson. Pictured are SERC Principal and Chief Executive Ken Webb, Templeton Robinson Director Jonathan Steen and SERC Sales Manager Jo-Ann Crossley.

8. Jake Bishop from Belfast got a sneak peek at Northern Ireland’s first indoor Alpine themed Ski and Adventure centre at We Are Vertigo with Head Ski Instructor Moray Stewart and General Manager Wendy Philips. The centre, which is due to open in Newtownbreda Industrial Estate, Belfast, on 25 October, will bring with it up to 60 new full and part time posts.

9. Gavin Carroll, general manager, The Merchant Hotel celebrates The Merchant being named the first AA Hotel of the Year for Northern Ireland at the prestigious national AA Hospitality Awards.

10. Launching the RICS Northern Ireland Awards are Paul Kendrick, RICS, Alistair Dunn, Chiarman of the Judges, and Ben Collins, Director of RICS, at last year’s Project of the Year, the Skainos Project in East Belfast.

OCTOBER 2013 85

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11. The Minister for Finance and Personnel, Simon Hamilton, recently hosted a private dinner with BDO Northern Ireland and their clients at Parliament Buildings to discuss new ideas of generating growth within the NI economy. Pictured with the Minister are BDO’s Brian Murphy, Peter Burnside, Laura Jackson and Nigel Harra.

12. Pictured at the official launch of Belfast’s newest bar, The National Grande Café, are Bill Wolsey, Petra Wolsey and Conall Wolsey from the Beannchor Group. The bar is set in the historic surroundings of one of Belfast’s oldest buildings - the former National Bank Building on High Street.

13. Autoline Insurance Group recently welcomed a delegation of Japanese researchers from Nomura Research Institute in Tokyo to their Newry headquarters to learn more about telematics. Kentaro Umeda, Senior Systems Engineer, Keita Sasaki, IT Engineer, Nomura Research Institute (NRI), Tokyo and Kazumi Aoki, Research Analyst, NRI New York are pictured with Michael Blaney, Managing Director of Autoline.

14. Antrim based fit-out specialist, Marcon, is celebrating another success after the completion of the refurbishment of the former Platform Bar in Holywood. Toasting the job are Colin Brown, Bar Manager at Tate’s Bar & Grill; Mark McElroy, Director of Marcon Fit-Out; and Thomas Doyle, Contracts Manager at Marcon Fit-Out

15. Beverley Brown, General Manager of Funeral Services Northern Ireland is joined by Funeral Director Peter Mulholland and Andrew Wishart of DA Wishart Building Contractors as they discuss plans for the company’s major investment in funeral homes in Carrickfergus and Belfast.

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16. MLN Champions Professor Marie McHugh (Ulster Business School), Oonagh Murtagh and Angela McGowan (Dankse Bank) and Professor Feargal McCormack (FPM Chartered Accountants) are pictured at an event entitled ‘Exploiting the Recovery’. The Management & Leadership Network event marked the launch of the new MLN season and examined what the immediate economic future holds for Northern Ireland.

17. Pictured at the recent In-House Lawyers Conference hosted by The Law Society and Carson McDowell are Alan Hunter, Chief Executive of the Law Society of Northern Ireland; Enterprise Minister Arlene Foster; Neasa Quigley, Head of Corporate at Carson McDowell and Stephen Allen, Head of Global Legal Services Transformation for PwC.

18. Northern Ireland wine buffs are invited to take part in the Fine Wine Challenge and turn top palates into top prizes to raise vital funds for the NSPCC. Dearbhla McGrath, NSPCC fundraiser, and James Nicholson from James Nicholson Wine Merchants, announced the return of the Challenge to the Merchant Hotel on 15 November.

19. The Apprentice winner Dr Leah Totton joins Cancer Focus’ Caroline McNelis to show her support for Cancer Focus Northern Ireland’s Girls’ Night In campaign to fund pioneering breast cancer research at Queen’s University Belfast. As part of breast cancer awareness month, the local cancer charity is asking women across the country to have their friends around for a Girls’ Night In during October.

20. Belfast digital marketing agency The Web Bureau can stake the claim of being best in the province after it scooped the top prize of ‘Best Digital Agency’ at the Digital Advertising Northern Ireland (DANI) awards. Directors Paul Haslam and Colin Graham celebrates with Lea Glover, Anna Greene, Glenn Drain, Jeremy Brown and Denise Cowan.

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THE ARRIVAL OF THE AlbanyFrom the team behind Filthy McNastys and El Divino, The Albany on Lisburn

Road is Belfast’s newest hotspot. Its recent sneak preview night gave invited guests a chance to sample the new establishment while enjoying cocktails and

canapes before it’s official opening on the 27th September. Formerly TATU & Lily’s, the team behind The Albany recruited award winning

designers O’Donnell O’Neill Design Associates to restore the bar. The unique design concept has turned the previous layout on its head, developing a bar within a bar with the Lisburn Road venue becoming both classical and theatrical.

Two days of premier, adrenaline-fuelled racing action at Northern Ireland’s famous Down Royal Racecourse gets

under way on November 1, when this year’s Festival of Racing returns for its biggest and best event yet.

Horse racing fashion and top notch hospitality await thousands of racing fans and super-cool socialites making a beeline to the fully-transformed, state-of-the-art County Down facilities to help Down Royal celebrate 20 years of investment and growth, and its unrivalled status as Northern Ireland’s number one draw for ladies with classic, winning style.

To mark this special anniversary, Down Royal is ramping up the glamour stakes with a special JNWine.com Ladies’ Day “Best Dressed” prize package on November 2, which includes a fully paid-up, luxury trip to Dubai for two – including a once-in-a-lifetime visit with hospitality to the world-famous Meydan racecourse.

The only thing this year’s fashion-conscious contenders have to do is to impress Ireland’s best-known fashion guru Bairbre Power with their individual sense of style, sophistication, elegance and poise.

Since 1993, Down Royal Racecourse has ploughed more than £5m into transforming the site with the provision of a new, state-of-the-art grandstand, new, luxurious hospitality suites and a landscaping overhaul that befits its position as one of Northern Ireland’s leading race day attractions.

Mike Todd, General Manager at Down Royal said: “For more than two decades, we have invested millions and worked tirelessly to provide an unbeatable experience for everyone who comes to Down Royal and we have achieved that through major redevelopment and modernisation and a true focus on what our customers want – the very best in horseracing

and hospitality. This year, we want to celebrate these achievements, which is why this year’s November Festival of Racing will be so special.”

“We are enormously proud of our racing reputation and history. This year’s Festival provides the perfect platform to showcase just how far Down Royal has developed both on and off the track.”

90 OCTOBER 2013

LIFESTYLE

TOP OF THE WORLD: Ulster Business deputy manager Sylvie Brando, her niece Emily and dog Sandy were among those who successfully completed the Slieve Donard Challenge in aid of the Simon Community. They undertook the charity trek to raise much needed funds for the Simon Community which will be used to help strengthen the safety net of homeless services in Northern Ireland by providing emergency accommodation, advice and community support for people who are homeless or who are at risk of becoming homeless.

Down Royalups the stakes for

Festival of Racing

92 OCTOBER 2013

TECHNOLOGY

The GadgetGuide

Despite sporting the same form factor as last year’s model, the iPhone 5S is in fact a significant upgrade to Apple’s premium smartphone.

Its A7 processor is a massive leap forward is also now coupled with a so-called co-processor – the M7 – which manages the phone’s various sensors and to minimises battery usage while the device is not in use.

Taking full advantage of this extra power is a significantly improved camera, promising far more true-to-life photos. A completely redesigned flash helps achieve this in low-light, while a 120fps video mode makes it easy to put together slick slow-motion videos.

These under-the-hood improvements are true to form for a company that tends to make dramatic revisions of its iPhone only every other year.

The one physical change that is made – a fingerprint sensor on the home button – is a handy security feature but one that is quite restricted in its applications.

You get the feeling that Apple is yet to unleash the full potential of this particular feature.

The iPhone 5S is available from a number of networks or directly from Apple.com.

Technology journalist Adam Maguire reviews some recently released and soon to be available gadgets.

REVIEW: iPHONE 5S

REVIEW: BLACKBERRY Z30

Struggling to come to terms with a very changed mobile market, Blackberry hopes its latest touchscreen device will convince users that it can keep up with Google, Apple and Co.

It is not that long since Blackberry launched a coordinated attempt to regain momentum in the smartmarket it used to rule and the Z30 is the next phase of that attack plan.

Boasting a 5 inch AMOLED screen the Z30 follows the recent trend towards larger devices and sits on the verge of the so-called ‘phablet’ sub-category.

However, this is more than just a Z10 with a bigger screen – it also has a faster processor and a staggeringly large battery that boasts somewhere in the region of 18 hours of talk time.

The Z30 offers plenty but the Blackberry is so out-of-favour the odds are still against it and all the uncertainty that currently surrounds the brand only enhances that challenge.

The Blackberry Z30 has begun rolling out across British networks from late September.

OCTOBER 2013 93

TECHNOLOGY

Microsoft’s first foray into the modern tablet market was a pretty disastrous one, with the company recently taking a $900m write-down on the back of the product’s underperformance.

However, the Surface RT and Surface Pro were not necessarily bad– they were well-built and packed plenty of power. No doubt because of this - and despite the public’s initial reaction – Microsoft has kept faith with its tablet strategy with the Surface Pro 2.

The device looks much the same as its predecessor, with most of the changes happening inside. The processor has been given an upgrade, while there is also an option for more RAM should the user desire.

All of this is done in a lighter and thinner form, while the device’s unique, built-in kickstand now offers more flexibility to the user.It is certainly brave of Microsoft to stick to its tablet strategy but the Surface Pro 2 has a big mountain to climb – one that only gets bigger as

time ticks by.

The Microsoft Surface Pro 2 is released on 22 October.

PREVIEW:MICROSOFT SURFACE PRO 2

PREVIEW:SOny PS VITA SlIM

The next phase of the home console war may be about to get underway, but the PS Vita Slim is a clear sign of Sony’s intent to keep fighting in the handheld market too.

The PS Vita was Sony’s second attempt at the handheld market after the moderate performance of its PSP was overshadowed by the runaway success of Nintendo’s DS.

After nearly two years, however, the device has not really taken off in any real way. The imminent arrival of Sony’s new home console - the Playstation 4 - offers as good of a chance as any to try to revive the floundering brand.

As the name suggests the Vita Slim is a smaller, lighter version of the original Vita. It also has a better battery, some on-board storage - the trade-off being a slightly weaker screen and no 3G connectivity.

On top of all that, the Vita Slim is likely to be cheaper and also come in a range of colours. Sony will no doubt hope all of that will position it perfectly to ride on the expected success of the Playstation 4 once it arrives.

The Sony PS Vita Slim currently has no UK price or release date.

How often do you travel, where to and why?Roughly every couple of weeks, from Belfast or Dublin, either with the sales team or as part of ongoing projects. Most of my travel is to either the UK or Europe and then the US a few times a year. What are the three things you couldn’t do without when travelling on business?Laptop, credit card and Kindle.

Have you found a good way to work on the move?If I’m stuck in an airport for an extended period of time, a quiet corner near a power point, my iPod and regular access to coffee usually suffices.

What would be your top tips for anyone embarking on a job that involves travel?Have all your travel documents, boarding passes, hotel addresses to hand before you set out, and leave sufficient time for each journey to get comfortably to where you need to be. For shorter trips take hand luggage only. Pick your business outfits carefully – smart and low maintenance (not everywhere provides irons!) Don’t wear ridiculously high heels for flying.

What do you enjoy most about working internationally and what are the downsides?I really enjoy visiting clients whether it’s early in the relationship, helping the business development group with the sales pitch or during the project execution phase for the more detailed technical meetings. Visiting new places is always an experience to be gained from. The biggest downside is missing the chaos of daily family life, my husband and our three boys. Being on the road can be lonely, so Skype is my new favourite thing.

What’s your favourite city in the world and where has disappointed you? Paris and London are both very close to my heart, beautiful buildings and always buzzing. The worst experiences are when life doesn’t work out the way you expect. For me one of these was being stranded in Berlin with all the airports in Europe closing down due to snow. Our travel group finally managed to get me a late flight to Liverpool, for an early morning connection to Belfast the next day. However due to a series of mishaps (broken planes, ice on the runway, ice on the next plane) by the time we were ready to leave, Belfast had also shut. I finally reached home at seven in the evening, having left Berlin at two the previous day.

What’s the best airline you’ve flown with and best hotel you’ve stayed in?Both BA and Continental I’ve found to be pretty good in terms of quality of service and flexibility. One of my favourite hotels has to be Rudding Park in Harrogate – comfiest bed ever, beautiful grounds and an excellent restaurant.

Do you speak any languages and if so have they been of use on business trips?Passable schoolgirl French and yes it has helped in a business context. Like many people I can understand more than I can speak, so I can follow the parts of meetings in French.

Where in the world would you most love to work that you haven’t been to yet?Although I have worked with Japanese clients for many years, I haven’t yet visited Japan, so this is top of my list.

Helen McKeever, Programme Manager, Almac

94 OCTOBER 2013

BUSINESS TRAVELLER

Business Books

All titles are available at easons. To win copies of the featured books go the Ulster Business facebook page.

forget a mentor, get a sponsor By Sylvia Ann Hewlett (Harvard Business Review Press)Featuring real stories and practical advice on how individuals can find, manage, and leverage a sponsor for

career growth. A sponsor serves as your advocate – not just doling out advice but also offering the powerful backing inside the organization to get you where you want to go. Combining real examples with practical advice, Forget a Mentor, Find a Sponsor shows how to build this important professional relationship and effectively work with your sponsor to achieve career success.

the curveBy Nicholas Lovell (Penguin Portfolio)The Curve is a new way of doing business and of seeing the world. For most of the last century, companies strived to sell more and more products at

uniform prices. But the future of business is about variation: tailoring products for customers of all stripes, and letting your biggest fans spend as much as they like on things they value. The Curve shows us not to be afraid of giving some things away for free.

in my shoesBy Tamara Mellon (Penguin)This is the Jimmy Choo founder’s personal and candid account of her life in the fashion business. Tamara Mellon shares her whole larger-than-life story, with candour

and detail that has never before been made public. From her troubled childhood and her time as a young editor at Vogue to her partnership with cobbler Jimmy Choo and her very public relationships, she offers a gripping account of the episodes that have made her who she is today. Mellon made a fortune building Jimmy Choo into a billion-dollar fashion brand. In My Shoes is a must read for entrepreneurs, fashionistas, and anyone who loves a juicy true story about sex, drugs, money, power, high heels, and overcoming adversity.

TRAVEL & TOURISM

OCTOBER 2013 95

Public back calls for end to restrictions on City AirportGeorge Best Belfast City Airport has

received strong public support for its campaign to end the seats for sale

restriction on the airport.Some 82.1% of people surveyed in a recent

poll by Lucid Talk expressed the opinion that the restriction – which limits the number of seats the airport can sell to two million each year – should be removed.

The restriction, which dates back to the time when the airport terminal was a PortaKabin, is the subject of a Public Inquiry next year

The poll showed a high percentage of people were not aware of the restrictions under which the airport operates. For example: • Strict operating hours of between 06:30 and 21:30 (71.2% were NOT aware of this)• Flights capped at 48,000 per year (86.1% were NOT aware of this)• Belfast City Airport is the only airport in the world with a seats for sale restriction (96.7% were NOT aware of this)

Katy Best, Commercial and Marketing Director, George Best Belfast City Airport, said:

VISIT belfaST upbeaT on TourISm

Visit Belfast set out its ambitions for the year ahead at its annual general meeting at the Malone Lodge Hotel, pinpointing even further growth in visitor numbers, conference delegates and cruise

ship arrivals.Backed by more than 500 members from the local hospitality industry,

Visit Belfast, which promotes Belfast locally, nationally and internationally and operates three tourist information centres, said it remained confident about the city¹s tourism prospects for the year ahead.

Visit Belfast’s combined sales and marketing activities contributed £60m to the local economy last year. Chief Executive Gerry Lennon also confirmed Belfast’s growing success as a city break destination after reporting one of the busiest summers on record.

Opening the event, Belfast Lord Mayor, Máirtín Ó Muilleoir, said the results of the city’s concerted efforts to promote tourism were hugely significant.

“Tourism is undoubtedly one of the city’s success stories and the continued, collective efforts made to date by the public and private sector has created much-needed jobs and increased investment.

“Belfast now welcomes almost eight million visitors a year. Tourism has helped to transform Belfast’s image globally into an exciting young destination for leisure, business and cruise, punching well above our weight for a city with a population of only 300,000 people. With all our partners, I’m confident that by working together the way we have, we can look forward to achieving even more over the year ahead.”

“We are seeking the removal of the seats for sale restriction but not looking to change our operating hours or the number of flights we handle each year.

“No bigger or louder aircraft will use the airport should the restriction be removed.

“As an island we rely on air travel and are delighted that so many members of the public realise the importance of the removal of this restriction to our business.

“The airport plays an important role in the economic fabric of Northern Ireland and the continual investment in our facilities by our shareholder ensures we are a jewel in the crown of Belfast.”

The airport said it is one of the most restricted airports in Europe and the only one in the world with a restriction on seats for sale.

“Removal of this restriction would directly and indirectly impact economic growth to the region which cannot be overlooked, especially in today’s economic climate,” said Katy Best.

“We work hard to balance the growth of our business with the need to protect the quality of life for our local community and the environment.

“We have undertaken a series of measures to protect the local population from noise with no heavy aircraft using the airport and strict operating hours with no late night flights.”

Pictured are Belfast Lord Mayor, Mairtin O’Muilleoir, Visit Belfast chief executive Gerry Lennon and Gemma Bell from sponsor Diageo.

CLASSIFIEDS

TO PLACE A CLASSIFIED ADVERT CONTACT ULSTER BUSINESS ON 028 9078 3200

96 OCTOBER 2013

Business Diary November 2013

If you would like to promote an event or conference please contactStuart Hackney (stuarthackney@greerpublications.com)

For more information and to book visitwww.womeninbusinessni.com/eventsdate venueevent COntaCt

15 November08.30 - 10.00

Business Thinking Rewired – Creating a Cultural BrandOrganiser: Arts & Business NI

James Street South Restaurant, 21 James Street South, Belfast

Email: tom.bamford@artsandbusinessni.org.uk or 028 9073 5151. For more information visitwww.artsandbusinessni.org.uk/events/

27 November09.30 - 13.00

Global Technical Compliance SeminarOrganiser: Queen’s University

Invest NI, Bedford Square,Bedford Street, Belfast BT2 7ESCost: £75 +VAT per person

Martin McAteer on 028 9069 8825 or email: martin.mcateer@investni.com

21 November19.30

Women in Business NI Awards 2013Guest Speaker: Hilary Devey CBEOrganiser: Women in Business NI

Culloden Hotel, BelfastCost: Early Bird Rate: £80 +VAT (available until 1st November 2013, after which tickets are £95 +VAT

For more information or to book email: laura@womeninbusinessni.com

22 November08.30 - 10.00

Business Thinking Rewired –Culture Secures ResultsOrganiser: Arts & Business NI

James Street South Restaurant, 21 James Street South, Belfast

Email: tom.bamford@artsandbusinessni.org.uk or 028 9073 5151. For more information visitwww.artsandbusinessni.org.uk/events/

27 November12.00 - 14.30

New Member LunchOrganiser: IoD NI

IoD Northern Ireland, Riddel Hall,185 Stranmillis Road, BelfastCost: FREE

Lorraine Corry on 028 9068 3224 or visit www.iodni.com

7 November10.00 - 13.00

Business Networking LunchOrganiser: Women in Business NI

The Bridewell, 6 Church Street, Magherafelt BT45 6ANCost: FREE

For more information or to book email: marie-clare@womeninbusinessni.com

29 November08.30 - 10.00

Business Thinking Rewired –Creative Training & DevelopmentOrganiser: Arts & Business NI

James Street South Restaurant, 21 James Street South, Belfast

Email: tom.bamford@artsandbusinessni.org.uk or 028 9073 5151. For more information visitwww.artsandbusinessni.org.uk/events/

14 November08.00

CBI NI HR Leadership ConferenceOrganiser: CBI Northern Ireland

Ulster Business School, York Street, Belfast

For more information or to book email: kirsty.mcmanus@cbi.org.uk

ANY VEHICLE, ANY MANUFACTURER

TOTAL FLEET MANAGEMENT

People in Business

What was your first paying job? Junior interior designer with an architectural practice in Marlow. Looking back it was a great experience and taught me the basics which are still valuable in today’s studio environment.

What’s the worst job you’ve ever done?Working in a factory, taking lids off small cans, filling cans with wood preservative, placing the lids back on! It lasted a total of 5 hours! Mind-numbing and glad it was only a holiday job.

What do you like most and least about your current role? The best part of my role is working with some great clients and with a brilliant team at Whitespace. One disadvantage of owning a business is you do everything including off-loading the lorry and the less glamorous jobs!

Are you switched on 24 hours or is there a time when you switch your phone off?My phone is turned to silent when home and woken at 8.00am. If it’s urgent; you take and make the call.

Has your personal life suffered because of your career? In my early career and working in London the travelling was a killer and I probably

spent more time travelling than would have liked. Life in NI is much easier with less travelling and easier commuting.

What do you consider your best business decision or idea? Creating Whitespace Design with Fiona Murray almost three years ago. Despite the economic climate we were confident it was the right move and so far we are on plan.

Who or what has been your biggest influence or inspiration? After my father who was a massive influence it has to be Richard Branso. His free thinking, energy and enthusiasm. 400 business operations later and he is still going strong.

Do you have any “golden rules”? Be honest, fair, and trustworthy and treat people you meet as you would like to be treated in return.

What would you regard as a “cardinal sin” for anyone doing business with you?Not being honest and wasting time plus being kept waiting!

What is your most hated business expression or cliché? I’ll get back to you! Or perhaps, leave it with me!

If you hadn’t been in business what would you have liked to have done? I would have loved to pursue my hobby in motor sport but sadly the funds ran dry in the early years and commercial sponsorship hadn’t started back then.

What has been your toughest challenge? Starting a new design business in the toughest ever recession, in such a small marketplace and where good design is deemed too expensive.

What advice would you give to the 18-year-old you? No one is going to give you anything, your career is down to hard work, taking the knocks and getting on with it. To know, how hard it was going to be!

Which person, living or dead, would you like to have met, and why? Ferdinand Porsche, not only designed one of the most iconic sports cars of the last 50 years but a great designer of other everyday objects. Why? His attention to detail.

What do you think you’ll be doing in 10 years’ time? Hopefully, enjoying a brilliant bottle of red wine with good friends and family sitting on a sunny south facing patio in the South of France!

factfileNaMe & job title: Ronald Hogg, Director at Whitespace Design

boRN: Stamford, England

eDUcatioN: High Wycombe College of Technology and Art

caReeR: Interior Designer in London, relocated to Northern Ireland in 1990. Owner of Storage Planning and Sales Ltd, then establishing Whitespace Design in 2011.

faMilY: Married to Tish, three children, Emma, Pippa and Sebastian.

iNteReStS: Motor Sport, cycling and skiing.