Deloitte’s annual survey of companies that have been recognised as Best Managed by the Deloitte awards programme show that optimism is on the rise amongst this group of indigenous Irish companies. In fact, nine out of ten of Ireland’s Best Managed Companies have indicated that they plan to expand their business in the coming year.
In addition, 80 per cent of respondents plan to recruit in 2012 while half aim to complete M&A activity in the next 12 months. Half of respondents observed an improvement in market conditions in the last 12 months, compared to 40 per cent last year. Similarly, 74 per cent feel more confident about the outlook for their company compared to 12 months ago.
With regards to outlook on the economy, 43 per cent of respondents believe that it will be the second half of 2013 before the economy returns to growth. Similar to the 2011 results, 31 per cent of respondents indicated that improving consumer sentiment was the single most important factor in returning the economy to growth. This was followed by restoring credibility and integrity in the banking sector (24%), growth in exports (12%) and renegotiating the terms of the EU/IMF bailout (12%). In line with this, one third of companies identified lack of customer demand as the biggest challenge facing indigenous Irish companies. Availability of funding and the high cost of doing business were also acknowledged as considerable challenges for Irish companies. Interestingly, however, the majority of respondent companies indicated that they are not experiencing difficulty in obtaining finance for working capital or capital projects.
Entrepreneurial spirit was once again considered to be the biggest advantage indigenous companies in Ireland have, as identified by 55 per cent of respondents (60% in 2011). This was followed by low corporate tax regime (21%) and the educated workforce (17%). The biggest disadvantage, as identified by over half of respondents, was dependence on the Irish market, followed by the cost of doing business (39%).
These findings provide great insight into the mind-set of indigenous Irish companies. This positivity and focus on growth is very promising and is a characteristic that we have observed amongst the winners of the Best Managed Awards Programme over the last four years. Approximately half of respondents indicated that growth/increase in market share was currently the most important focus for their organisation.
It’s extremely encouraging to see that Ireland’s Best Managed Companies are achieving this goal through the execution of sound and well thought-out strategies.