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Score One for SMEs

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For the past few months, the term Brexit has acted as somewhat of a Bogeyman figure looming over many Irish business as the haze of uncertainty for what a British exit from the European Union would mean for Irish borders and trade with the UK, on which many companies rely. Perhaps the most concerning idea for Irish businesses would be what this would mean for Irish Small and Medium Enterprises (SMEs). We have spoken at length in the past about how important the SME sector is in Irish business, forming the backbone of our economy, and how vital it is to protect these types of businesses in changing times. Many Irish SMEs rely on business with the United Kingdom and so a cloud of uncertainty and insecurity has plagued the sector in recent months.

 

Recently, we have spoken about new funding opportunities coming to light for SMEs and this week it appears that the future may be beginning to look even brighter for these vital enterprises. The Minister for Employment and Small Business Pat Breen has urged SMEs and micro businesses to turn to their Local Enterprise Offices (LEO) for information about a range of supports now available to them. A newly announces suite of Brexit supports is now available to SMEs and microbusinesses through their Local Enterprise Offices which include

  • Access to the ‘Brexit SME Scorecard’ online tool where micro and smaller businesses can self-diagnose their readiness for Brexit – A vital planning tool which may assist many small businesses.
  • A ‘Technical Assistance for Micro-enterprises’ grant to help LEO clients to find new markets and exports.
  • Rollout of ‘Lean for Micro’ nationwide which will make small businesses more efficient and competitive.
  • A ‘LEO Innovation and Investment Fund’ pilot programme to support innovation in micro-enterprises and get them investor ready to scale their businesses.
  • Tailored mentoring to address Brexit related business challenges.
  • Training on specific Brexit challenges, including financial aspects.

As you can see from this list, these supports are specifically aimed at providing information and a framework of support and guidance for these businesses to utilise when navigating the uncertain times ahead. Minister Breen was quoted as saying of the support:

“I am delighted to announce this suite of important Brexit supports which will be available for small and medium enterprises. It is imperative that micro and small businesses have the tools and supports needed to navigate through what is uncharted territory. This is part of the Government’s Brexit planning and I am very pleased that my Department through Enterprise Ireland has been able to accelerate the rollout of these new LEO offerings worth up to €3.4 million, and I urge small and micro business owners to get in touch with their LEO to see how they can help.” 

These supports focus heavily on planning ahead which will be vital in the coming months for all businesses. Should you require further information, guidance or assistance please give us a call.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

CLEANING THE BREXIT WOUNDS

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We have spoken before about the issues and opportunities that lay ahead for the Irish economy in the wake of Britain’s somewhat shocking Brexit vote results. In the weeks since the vote there has been a continuous atmosphere of uncertainty about all things economic both here and across the water.

 

Goodbody’s recent health check for the third quarter of 2016 shows that Ireland’s economic growth having just about managed to get its feet moving, is due to slow in the next 18 months. This is to be expected however as the view on the Irish economic status becomes increasingly cautious due to our tight links with Britain. It is expected that Brexit will trigger some form of a recession in the UK, primarily related to the uncertainty of the situation and lower spending habits as a result. When or how this would hit Ireland remains to be seen but it is undeniable that it will have a knock on effect to our small island with Goodbody predicting that our domestic demand will fall to 4.2% in 2016 and then lower again to 3.7% in 2017. Goodbody’s chief economist Dermot O’Leary has stated that;

“An imminent UK recession, triggered by Brexit-related uncertainty, is likely to take the gloss off a robust Irish economic performance.”

 

It has also been reported this week that some Irish banks are quite vulnerable to a possible downturn with HSBC claiming that they are enter a period of heightened uncertainty as tax profits fall. Despite making significant progress, Irish banks remain vulnerable to any future financial downturns. Recently, stress tests were conducted throughout Europe in order to ascertain how banks would survive a recession. These tests caused some concern for the Irish economic situation as both AIB and Bank of Ireland fared poorly in these tests as the second and fourth worst performers respectively.

 

Again these seem like grim tidings but it is important to remain open minded as analysts have suggested that weak asset quality and recent losses on bad loans might give good reasoning behind these poor performances and that the exercise did not take into account progressions in the last year and that our high level of overall debt skews these results unfavourably against our banks.

 

There was however an unexpected silver lining in Ireland’s economic situation which came in the form of Ireland’s valiant efforts in the Euros 2016 tournament. The tournament has reportedly send grocery sales skyrocketing with stores such as Supervalu and Dunnes recording a 3.4% and a 6.5% rise in value of sales during the latest period, whilst bargain stores such as Dealz also saw a great surge in sales.

 

It is hoped that the weakened sterling will not cause floods of shoppers to cross the border for bargains as we have seen happen before, and that although there is plenty of uncertainty in the air and the reports are laced with dread, that the Irish economy can level out and perhaps even benefit from this uncertainty as we have seen recently that smaller retailers can flourish in these times.

 

Should you require any help, advice or guidance on your own business or financial matters please don’t hesitate to contact us here at DCA Accountants where we are always more than happy to help.

Manager Index, showing a new push towards caution ahead of the Brexit vote.

Whilst the future and coming negotiations between Britain and the EU will be crucial to Irish interests, we will be reliant on the EU side to maintain the best interests of Ireland. This puts us in an interesting position as much of our business is reliant on the UK. It is hoped that in particular, the Common Travel Area agreement that is in place between the UK and Ireland remains in place as new borders would cause chaos for Irish people working in the UK, as well as making our trade routes increasingly difficult.

It will certainly be a long road of uncertainty ahead for Irish and British businesses, but there is still hope on the horizon and whilst business may not resume as normal for all, new pathways will be forged in the wake of Brexit.

As always if you require any guidance, advice or assistance with your own business or financial matters please don’t hesitate to contact us here at DCA Accountants, let us be the one constant for your business in this time of change.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

BREAKING UP IS NEVER EASY – BREXIT

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It has been quite a week for British politics and an interesting one for Irish companies trading with Britain. There has been a lot of upheaval and uncertainty underlying businesses in the wake of the shocking ‘Brexit’ result which saw Britain historically vote to leave the European Union with an incredibly close vote of 52% leave to 48% stay. The instant panic saw stock markets begin a struggle which continues to attempt to right themselves during a turbulent couple of weeks, while the value of the pound itself instantly plummeted. We spoke recently about what this event could mean for Ireland, and considering the news of this is unlikely to filter out any time soon, it is a topic we will all be following with interest.

Amidst the panic, as previously discussed there will be some new opportunities for Ireland to harness off the back of this move, and it is also important to bear in mind that although there will be many far reaching consequences, commerce – like Celine Dion’s heart, will go on. Despite the UK accounting for almost half of Irish exports, there may be a silver lining for Irish markets. On the positive side, despite early turbulence, world stock markets have proven rather resilient and have recovered well this week, despite the continuing weakness of Sterling.

The entire Brexit process is sure to be a lengthy one, particularly in the aftermath of David Cameron’s departure, and it will remain to be seen what this may mean for other members of the European Union. On our own end, growth and activity in Ireland’s services sector slowed by 0.5% in June according to Investec’s Purchasing Manager Index, showing a new push towards caution ahead of the Brexit vote.

Whilst the future and coming negotiations between Britain and the EU will be crucial to Irish interests, we will be reliant on the EU side to maintain the best interests of Ireland. This puts us in an interesting position as much of our business is reliant on the UK. It is hoped that in particular, the Common Travel Area agreement that is in place between the UK and Ireland remains in place as new borders would cause chaos for Irish people working in the UK, as well as making our trade routes increasingly difficult.

It will certainly be a long road of uncertainty ahead for Irish and British businesses, but there is still hope on the horizon and whilst business may not resume as normal for all, new pathways will be forged in the wake of Brexit.

As always if you require any guidance, advice or assistance with your own business or financial matters please don’t hesitate to contact us here at DCA Accountants, let us be the one constant for your business in this time of change.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY