NAOISE COSGROVE

Crowe

Crowe has been trading since 1941 and is part of the Crowe Global network. Naoise Cosgrove focuses on providing strategic advice to shareholders, management and funders to maximise value from a business. His sector expertise spans property development, construction, hospitality, tourism, food and drink, healthcare, retail, distribution and entertainment and media.

ACTIVITY In the initial lockdown phase we were extremely busy, particularly with clients in hospitality and retail, to preserve liquidity, forecast working capital requirements and reschedule debt obligations. Throughout the crisis, liquidity and funding have remained key challenges for many clients and we have worked successfully with many to put in place appropriate funding packages. Our tax and payroll departments were also exceptionally busy.

SERVICES Crowe’s consulting services have grown substantially over the last 12 months. Our risk consulting business has acquired a lot of new clients in the public and non-profit sectors, we have grown our consulting team by over 30%, and we have continued to deliver major change initiatives for clients including TU Dublin, the HSE and the Irish College of General Practitioners.

Our audit team was able to move seamlessly into remote working as they have used a paperless audit platform for the past number of years. We use dedicated collaboration tools to work efficiently with client finance teams, conducting work remotely through online information sharing. Where appropriate, our audit teams use technology tools to identify indicators of fraud, management override of control, inefficient processes and unusual behaviour.

REMOTE WORKING A positive impact of the change in circumstances was to accelerate a move to a paperless office, with no adverse impact. However, training and development of younger staff is more challenging while working remotely. A limitation of the prolonged working from home environment is the impact on team bonding, spontaneous conversation and knowledge sharing. Our social and CSR teams have been vital in delivering initiatives and online activities that help bring staff together in a fun and meaningful way to promote our firm’s culture and values.

BUSINESS SUPPORTS The government supports have been essential to the survival of many SMEs, in particular the wage supports (TWSS and EWSS). In the absence of state support, sectors such as tourism, hospitality and the arts face the risk of widespread closure, presenting a systemic risk for the future of the industry. These sectors provide significant employment on a regional level and are of strategic importance from an economic, cultural and social perspective.

Take-up of the SBCI Credit Guarantee Scheme (CGS) has been much lower than we would have anticipated. It is evident that SMEs are reluctant to take on additional debt, with many still carrying scars from the last financial crisis. However, the CGS was extended to 30 June 2021 and should be considered as a mechanism to refinance warehoused tax debts, as it provides attractive repayment terms and interest rates. We have seen greater appetite for the SBCI’s Future Growth Loan Scheme. It is a very attractive source of funding for businesses seeking to expand and participating lenders are also eager to utilise the scheme.

Personal savings levels are at an all-time high, suggesting that there could be a spending spree when vaccines are widely available. Those businesses which can survive the crisis should see a phase of rapid regrowth. However, there will be casualties, particularly among leasehold hospitality and retail businesses that cannot carry the debt burden. We expect to see an increase in examinerships as businesses look to restructure their balance sheets and reposition for growth.

ENTERPRISES Since the summer, we have seen a lot of activity on the M&A side across a variety of sectors, including nursing homes, pharmacies, insurance and food processing. There is considerable capital looking for attractive businesses to invest in. Many have reimagined their business as a result of the pandemic. We are supporting clients in a wide variety of ways, from strategic reviews to market entry strategies, tax advice regarding new markets and financing growth.

‘Liquidity and funding have remained key challenges for many clients’