Inflation a worry for private firms

INTEREST rates and inflation are the issues causing the most concern for privately owned business in Ireland.

A survey conducted among a sample of privately owned businesses found monetary issues were identified by 41% as causing the most concern this year, while 39% cited “general company profitability prospects” and 8% identified labour issues and general economic conditions.

Two out of three privately owned businesses said they are positive about their company’s outlook for the year ahead while one in four said they are “very confident” they would have a good year.

The survey, which was commissioned by IBI Corporate Finance, A&L Goodbody, Bank of Ireland corporate banking and Kennelly and Twomey tax advisers, also found that one in three firms may engage in merger and acquisition & activity over the next three years.

The survey also found that almost a quarter of privately owned businesses have no succession or exit plan in place, while almost two-in-three said they expected to transfer ownership of their business to their children or other relatives.

In relation to banking, close to two thirds of respondents said they would use debt to fund an acquisition, while more than half would do so to fund organic growth.

Managing director of corporate banking Ireland with Bank of Ireland, Pat Gaynor, said: “Monetary issues are primarily associated with interest and exchange rate fluctuations and inflationary pressures.

“A key strength in such times is to ensure the company is well capitalised; a business which is well capitalised and well managed is more likely to work through unexpected financial circumstances.”