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‘One of the risks of the regulatory trend that you see at the moment is that it is becoming more prescriptive and more specific’

Eimer O’Rourke of the IBF feels that an up-front approach is vital for firms who want to avail of loan finance. Eleanor Rosney reports


ompanies seeking loan finance must be willing to p rov i d e a s much information as possible about the state of their business and their plans for the future. That’s ac cording to Eimer O’Rourke, retail director of the Irish Banking Federation (IBF). According to O’Rourke, the credit extended to Ireland’s SMEs stands at e27 billion, while credit extensions last year totalled e2 billion. The IBF represents Ireland’s banks, working with members with the aim of supporting Ireland’s e c onom i c re c over y. O’Rourke believes there are many ways to achieve this and stressed the important part that small businesses would play in this recovery. ‘‘We will look at different customer segments of the banks, and we will look at consumers. We will look at the SME sector and seek to support them in different ways.This breaks down to having credit extended,’’ said O’Rourke. ‘‘I think it is really important to reiterate to the SME sector that there is credit out there, and that there is credit readily available. Obviously, the demand levels are subdued and are more subdued now as compared to when the economy was more buoyant, but I think you will find that overall the approval rates are broadly in line with the EU. If you are going to have growth and development, you need to have investment ^ they go hand in hand.’’

About O’Rourke O’Rourke has had a varied and eclectic career, and banking was not always on the cards for her. She started out in psychology and worked in community

Eimer O’Rourke, retail director of the Irish Banking Federation


Information holds key to loan finance services in a mental health role before studying for a Master’s degree in business studies, specialising in financial services. She then worked with Bank of Ireland Finance before moving on to the Irish Mortgage and Savings Association and the Irish Mortgage Council,which became affiliated with the IBF in 2000. The IBF is developing a website which, hopes O’Rourke, will ultimately become a ‘‘one-stop shop’’ in the provision of information for small businesses looking to secure loan finance. ‘‘We are trying to provide the SME sector with enough information to deal with the banking sector.One of the things that can be difficult for an SME is to know exactly what information the bank is going to want in a particular situation, when you are applying for credit or seeking an increase or extension in your credit,’’ she said. ‘‘We are trying to provide this information to customers, so that they can ensure that when

they do apply for credit, they have a better understanding of what information they are going to need to provide in order to support that application. ‘‘We certainly recognise the importance and role of the small business sector, both in terms of domestic activity and export activity.They are key to the economy going forward and we would see them as being a critical sector to support in as far as possible.’’

Bank finance According to O’Rourke, the information that banks and other lenders require from firms seeking loans is detailed, ranging from cashflow figures to debt data. She said credit control was a priority for cash-strapped businesses in all sectors of the economy. ‘‘If you have a small business that is left in the lurch by a debtor, that takes three or four months to pay a bill.This makes life very difficult for that busi-

ness,’’ she said. ‘‘You need to have a strong economic emphasis on prompt payment. Small businesses need to actively manage their debtors. It is information like that on their business plans, their cashflow and other documents, that will help hasten a decision around a credit application.’’ O’Rourke also acknowledged that trends in the wider economy were preventing banks from granting or extending a line of credit to small businesses. She also believes excessive regulation can hinder growth and sustainability.

Regulations In order for small businesses to compete in an active market, regulations must recognise that there are a number of variables in the SME sector. O’Rourke believes regulations affect both the bank and the consumer ^ and that warnings must be heeded so that banks do not divert attention from the

customers and their needs. ‘‘One of the risks of the regulatory trend that you see at the moment is that it is becoming more prescriptive and more specific. The difficulty is that regulation sets out one particular process, which outlines a way that a customer must apply for credit specifically, or a way in which a bank must deal with these credit applications,’’ said O’Rourke. ‘‘This does not recognise that there is any number of different types of SME customer. They are different sizes, made up of different legal constructs, they trade in different areas, they could be a cash-only business or a business that relies on credit, they could be exporting or trading in the domestic market. There are an unlimited number of different variables. ‘‘It really can be problematic if regulation attempts to put everyone into one single category and apply one single way of dealing with them. We would say, from the SME perspective,

that we need to ensure regulation does not go in that direction. ‘‘We potentially have some risks in this regard; we need to be careful with it.We need to ensure there is a deep and thorough understanding of SME business as it operates in Ireland, and all the variations that exist within it. There is no such thing as one typical business. ‘‘I will talk about regulation at the conference and regulatory change. I will also talk about various initiatives where we will seek to work with SME sector.’’

Professional services A key challenge facing small businesses was a lack of professional services aimed specifically at SMEs, O’Rourke said. ‘‘A developing small business may not have access to professional accountants or legal services, for example, and they can be constrained in their ability to access them. That can be a real challenge for SMEs,’’ she said. ‘‘If there was a way to leverage the current Job Bridge scheme, and it was possible to access the professional services of someone for a few hours a month ^ and get those services into their organisation in a manageable way ^ then that could play a massive role in the growth of that business. ‘‘There are different types of financial assistance and the key is trying to determine whether or not a business has a sustainable proposition. The bank will mostly be concerned with what the nature of the financial assistance is in the given situation. ‘‘I think that small businesses are key to our economy, and to generating confidence in our economy. Ireland needs to realise that Irish people have the ability to deliver themselves ^ and small businesses are critical in this space,’’ said O’Rourke.


News Focus


JULY 24 2011

Business interview: JJ Kavanagh & Sons JJ Kavanagh & Sons, the country’s largest privatelyowned coach company, has made several acquisitions and branched out in a bid to attract new customers, writes Eleanor Rosney

JJ Kavanagh Director, JJ Kavanagh & Sons Age: 54 Home: Urlingford, Co Kilkenny Family: married with eight children Hobbies: GAA; serves as chairman of Kilkenny ´g Bord na nO Car: Mercedes S500

Paul Kavanagh Director, JJ Kavanagh & Sons Age: 47 Home: Urlingford, Co Kilkenny Family: married with four children Hobbies: GAA; serves as chairman of the Northern Board in Kilkenny Car: Mercedes Vito

JJ Kavanagh & Sons


arely a decade after the first car appeared on Irish roads, JJ Kavanagh decided there was a future in motoring and set up a coach company in Kilkenny. More than 90 years on, the family’s buses are a familiar sight on Irish roads. Now run by Kavanagh’s grandsons Paul and JJ, the company, JJ Kavanag h & Sons, is the largest privatelyowned coach company in Ireland, with 170 coaches and 230 staff. After several acquisitions and investment of more than e40 million in coaches in recent years, they are turning their attention to expansion in Britain and mainland Europe. Although 100 per cent Irishowned, the firm can attribute some of its origins to London, according to JJ Kavanagh. After leaving school in the early 190 0s, the brothers’ grandfather headed for the English capital, where he worked for his brother-in-law


Paul and JJ Kavanagh DYLAN VAUGHAN

This is a Cinderella business and an invisible export. It is very hard to touch, and to quantify, and to feel

in a hackney firm. He also took night classes where he learned about the mechanics and electrics of cars. WhenWorld War I broke out in 1914, Kavanagh decided he did not want to fight for a cause he didn’t believe in, so he re-

turned to Urlingford. Armed with the knowledge he had pi cke d up i n L ondon, he opened his own hackney company. Motor transport was still relatively new and there was little public transport in Ireland.

Kavanagh began buying and selling cars and, as they became more popular and their potential became clear, he bought a bus and started out in business. The first route of JJ Kavanagh & Sons (Urlingfo r d t o K i l k e n ny) w a s

launched in 1919. ‘‘The bus used to leave on a Thursday morning at four o’clock for the fair in Kilkenny,’’ said JJ Kavanagh. ‘‘It ran six days a week. That service commenced in 1919 and still operates today, Monday to Saturday. ‘‘It still takes approximately the same length of time to reach Kilkenny, so things have not changed that much ^ except, back then, you got six gallons of petrol for ten shillings.’’ As the years went by, the business grew and expanded into newspaper distribution. In 1925, the Kavanaghs began distributing papers across a broad sweep of the country from Portlaoise to west Cork.The weekend and Sunday papers were distributed by the company until 1995, when the three Irish Press titles closed. The firm was the largest distributor of British papers in Ireland, and the only wholesaler in Ireland that worked continuously throughWorldWar II while coping with crippling fuel shortages. Despite these shortages, it also expanded the bus routes during the war, with new services introduced to Clonmel, Roscrea and Portlaoise. Two more family businesses were also spawned ^ in 1945, Paul and JJ’s uncle, Bernard, set up Bernard Kavanagh and Sons and, in 1968, another uncle named John Kavanagh set up Pierce Kavanagh Coaches. These companies also operate out of Urlingford today. When JJ Kavanagh died in 1957, his son ^ Paul and JJ’s father ^ took over the business. Paul and JJ both became directly involved in 1983, having worked part-time for the firm throughout their youth. Paul came aboard right after s e c ondar y s chool, and JJ joined after he studied accountancy for a year in Oliver Frea-


n e y & C o (now S m it h & Williamson Freaney) in Kilkenny. ‘‘We would work on a Saturday, beginning at midnight, and get orders ready for different customers. We had five trucks and 12 vans on the roads delivering papers at the weekends,’’ said JJ. When their father died in 1986, aged 63, the sons stepped up to run the business. ‘‘Myself and Paul took it on then and continued with the newspapers for the next couple of years, but we saw a future in transport,’’JJ said. The brothers began to expand the business dramatically. They shifted their focus from newspapers to coaches, and developed a more direct business model, focused on acquisition and organic growth. In 1992, they bought Princess Coaches in Clonmel and in 1995, they purchased Kenneally’s in Waterford for its city service. At the time they took over the Waterford service, it was the only licensed, privately operated service in an Irish city. They have since trebled the frequency of that operation and have extended its operating hours. Business continued to boom and, in that same year, they also purchased Toohey’s in Nenagh and Devine’s of Newbridge in Co Kildare. As a result of the expansion, it now has depots at Urlingford, Nenagh,Waterford,Carlow, Naas, Dublin and Clonmel, as well as back-up facilities in Galway, Killarney and Sligo. Surprisingly, skiing trips to Europe have become a target area for the company. In 2009, it catered for about 100 skiing trips, and that number grew to 300 last year. Encouraged by their experiences in Europe, the brothers decided on a more permanent expansion and made an acqui-

sition in England. ‘‘We have looked at many other operations over the years, but we didn’t do much else in terms of acquisitions until this year,’’ said JJ. ‘‘We purchased a business in Watford, north London, called Mullany’s Coaches. It has 45 vehicles in its fleet, and we took that over in April. It is going very well.We have added a few vehicles already, and are looking at expanding that.’’ JJ Kavanagh’s business in Britain has increased dramatically in recent years, and the brothers felt it was important to have a base there to maintain the service of their vehicles. Having bought Mullany’s, they plan to expand into other parts of Britain. Paul said there were considerable opportunities there and it was much easier to operate a bus service. ‘‘It is a much better environment to work and operate in [than Ireland]. You give 65 days’ notice and you get a licence to start a service. Here, you could be waiting years to get that licence,’’ he said. JJ believes that tourism is not regarded as the valued contributor to the Irish economy that it once was. In 2000, the then finance minister, Charlie McCreevy, reduced excise duty on diesel by 5p (now 7.5 cent) per litre. Prior to this, IR»289 (now e367) in excise duty was charged on every 1,000 litres of fuel bought. ‘‘Charlie McCreevy gave us a concession which meant that tourism expanded and grew dramatically,’’ said JJ. ‘‘Brian Lenihan later withdrew the concession, which was at the beginning of the slump in tourism. It was costing a couple of a million a year to the government, but was generating massive amounts of business in the state. ‘‘The industry itself is not seen as important. It is a Cin-

Founded: 1919 Employees: 230 Locations: head office in Urlingford; other offices in Dublin, Naas, Carlow, Clonmel, Waterford and Nenagh Turnover: e8.3 million in 2010 Shareholders: JJ Kavanagh, Paul Kavanagh and James Kavanagh

derella business and an invisible export. It is very hard to touch, and to quantify, and to feel. I don’t think it is appreciated. There are 1,900 private operators in Ireland, [with] twice as many vehicles as Bus Eireann and CIE combined, with no state funding.’’ Despite this, business is up 23 per cent at JJ Kavanagh compared to this time last year, although profit margins are very tight. The company had turnover of e8.3 million in 2010, down from e8.9 million in 2009. Airport services were a extremely successful part of the business, with several routes to Dublin and Shannon airports operating every day. While these services are still in place, Paul conceded that they were not as popular as they once were, and said the firm had had to be innovative to combat the fall-off and generate sales. ‘‘Tourism is up, I believe, but the biggest downfall at the moment is flights,’’ said Paul. ‘‘At one stage,there were 23 million people visiting our shores every year. Last year, there were 16 million. That is a massive drop, and we see that in our airport services, which have fallen every month. ‘‘Since June 2008, we have seen that decline. So what we have tried to do is find out what people are doing. People are going to concerts and matches, and we need to tap into these,’’ he said. So what does the future hold? Paul said the company ‘‘needs to focus on expansion in London at the moment’’, but whether it will continue to operate as a family business remains to be seen. ‘‘We are open-minded, so would not rule out any offers we received. But, of course, we would look at every option before deciding on something like that,’’ said Paul. With their combined offspring of 12 children (Paul has four and JJ eight), they might not need to look too far for their successors.

Irish firms score high socially By James Enright


lmost two-thirds of Irish companies are now using websites such as Facebook as part of their business plan, according to a new survey. The global study, by office management company Regus, found that some 64 per cent of Irish companies were using social networking sites to drum up business and build customer loyalty. The findings put Irish companies significantly ahead of the global average of 52 per

cent in their willingness to use social media. The research also reveals that there was a rise in Irish companies using social media to win new business, with 44 per cent of firms successfully winning new customers online. Although this was below the global average of 47 per cent, Irish firms lead Britain (41 per cent) and the US (43 per cent) in their usage of social media for customer acquisition. ‘‘Social networking has finally come into its own in the commercial world, with Irish firms clearly leading the way in building customer loyalty by connecting and engaging with

customers through the channel,’’ said Olivier de Lavalette, regional vice-president of Regus in Ireland. ‘‘Culturally, Irish and British people are more interested in adapting to new technologies and social media usage is more prevalent than in internally focused countries like Japan and central European countries. It is a great tool for small businesses to keep in touch with customers and monitor feedback.’’ The report said that social networking had evolved into an essential business tool, as the majority of businesses in Ireland (76 per cent) agreed

that without social media activity, their marketing initiatives could not hope to be successful. Websites such as Facebook, LinkedIn and Twitter are the most popular forms of social media used by Irish businesses. Fir ms are also availing of blogs, microblogs and online forums to connect and engage with customers. Nevertheless, firms also emphasised the need for a balance of marketing media, made up of traditional and digital techniques. The Regus survey is based on the responses of more than 17,000 managers and business owners in 80 countries.



Eleanor rosney reports on adapted physical

activity programmes

Quality of life

Siel Bleu APA programmes are currently used in seven counties but the programmes are now going to be introduced in 200 nursing homes, day care and community centres in Ireland, with a view to providing an APA service to almost 5,000 people each week by 2015

PAGE 24 irishmedicalnews

With 2012 being the European Year of Active Ageing, emphasis on the importance of physical activity amongst the elderly and people suffering from chronic diseases is more important than ever in Irish society. According to the 2012 census, 11 per cent of the Irish population is over the age of 65 and this is expected to double over the next 30 years. Currently there are over 20,000 elderly people living in nursing homes and almost 5,000 resident in hospitals. Unfortunately, statistics indicate that only 10 per cent of those over the age of 65 engage in high levels of physical activity, and 63 per cent live a sedentary lifestyle. Equally, chronic diseases are a major health challenge in Ireland with roughly one third of men over 60 years of age having two or more. This trend tends to increases with age. It is estimated that 80 per cent of instances of cardiovascular disease and type 2 diabetes, as well as 40 per cent of cancer cases, could be avoided if major risk factors were eliminated. The main causes of chronic diseases are known and are largely preventable. One charity has recently received a helping hand in the form of €240,000 towards their mission to promote physical, mental and social health, as well as preventative measures amongst the elderly and those suffering from chronic diseases. Siel Bleu received the donation from Nutricia Medical and it is being used to facilitate the introduction of their Adapted Physical Activity (APA) programmes at a community level through residential care facilities and community centres. Present in Ireland since 2010 but established in France since 1997, Siel Bleu now employs more than 230 people who organise and oversee 18,000 courses of preventative health-focused physical activity across Europe. The funding will be delivered over three years and the charity hope to be entirely self-sustained after this time. Siel Bleu APA programmes are currently used in seven counties but the programmes are now going to be introduced in 200 nursing homes, day care and community centres in Ireland, with a view to providing an APA service to almost 5,000 people each week by 2015. Ms Fiona Foley, CEO of Siel Bleu Ireland, told IMN that: “We don’t provide a generic physical programme. We adapt activities to suit individual needs. We can adapt programmes to prevent physical deterioration, to improve health and to alleviate pain associated with chronic disease or pain associated with the recovery process.” Ms Foley believes that there is a significant lack of awareness of the importance of preventative measures like physical activity amongst Irish people. “The Government needs to realise that physical activity can be used to prevent

illnesses and the statistics are there to show that it can help prevent falls and injuries, but also prevent chronic diseases such as cardiovascular disease or diabetes. “We need focus and a stronger emphasis on preventative measures. In other European countries, like Germany for example, they are much more aware of the importance of activity. The insurance companies there actually invest in physical education classes for susceptible people as they would rather do that than pay out after a diagnosis or something worse has happened. There is definitely an awareness issue in Ireland.” Similarly, Dr Dermot Power, a consultant in geriatric medicine at the Mater Hospital in Dublin and Medical Director of St Mary’s Hospital, Phoenix Park, Dublin, reiterates that activity is essential for physical and cognitive health. “It’s good for your brain and body,” Dr Power told IMN. “There are reduced infection rates and reduced levels of depression noted, along with increased positive function in people who engage in moderate levels of physical activity. It holds true within a nursing home context that inactivity leads to more inactivity. The less you do the less you are able to do,” he said. One of the first nursing homes to become involved in the pilot APA programmes was the TLC Centre in Citywest, Dublin. They have run APA programmes since Siel Blue first began operating in Ireland. Residents partake in activities such as chair gymnastics and fall prevention classes, and Ms Imelda Burke, Director of Nursing, believes that the APA programmes are by far their most popular. “Clients who take part in the classes really enjoyed the chair gymnastics,” she told IMN. “They had a proper, well-constructed programme where their abilities were taken into consideration and they were

pushed to do a little bit more without overexerting themselves. All the clients really enjoyed their tailored programmes. It certainly gave them a goal to reach and the goal was to maintain their current physical ability and improve on it,” she said. Ms Burke also said that clients experienced improvements in their pain levels, dexterity, joint mobility, flexibility, strength and balance within weeks of undertaking their APA programmes. The biggest improvement, however, was in their overall wellbeing, confidence and independence. “Most programmes aim to maintain current physical levels, but Siel Bleu aims to maintain and improve current physical status and that is key to the success. Clients who were cognitive worked really well in the programme, as did clients with limited cognitive function. Clients who would normally not concentrate on any programme for any period of time seem to respond well to this programme. We have clients who tell their family and friends not to visit them on the day they are scheduled to have their APA as they don’t want to miss any classes,” she said. As well as promoting their APA programmes, Siel Bleu is currently involved in the HAPPIER (Healthy Activity and Physical Programme Innovations in Elderly Residencies) Study which evaluates the effectiveness of APA programmes across a number of indices. These range from potential changes in the quality of life of participants through to the impact of such programmes on supervisory staff and medical staff. An cost analysis of the programme will be carried out and new financial models for funding and delivering APA programmes will be drawn up. If positive, the HAPPIER Study could become part of a Europe-wide EU public health programme. n

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