Sunday 20 January 2019

Ask Anne: on the Budget, her Anglo past and the future of the jobs market in Ireland

Anne Heraty is one of the most successful businesswomen in the country but she's dealt with her share of travails. She sat down with Donal Lynch

Ann Heraty by Paul Young
Ann Heraty by Paul Young
Donal Lynch

Donal Lynch

The morning papers are neatly laid out for visitors in CPL's sleek Dublin 4 offices - and predictably they are dominated by two stories: the Budget and the efforts to secure the extradition of the banking crisis's King Of Hearts, David Drumm.

One imagines that Anne Heraty, the company's redoubtable CEO, will be following both closely - even if, as expected, she is notably more expansive on the Budget than the ghosts of Anglo past.

It seems a tad rude to mention the war right away, so we tentatively venture forth onto the relatively safer ground of the Noonan giveaway, which Heraty says is "pro-jobs, pro-business" and "a good move in the right direction".

"It's good to see that top rate of tax come down, that will help to attract the top people back here," she adds. "One of the things we would notice when we're campaigning for people to come back is that people say that their take-home pay was considerably less here than in the UK. For a person on €70k that was a difference of €6k in terms of take-home pay prior to the Budget."

Overall the Budget was weighted more in favour of employees than employers. Does she think this will be good for continued recovery in the labour market?

"Yes. Employers and business leaders wanted that. I think there is still more to do. We have to think about the overall economic environment. We have to be cognisant that right now we're benefiting from things that are outside our control such as oil prices coming down. I think childcare is going to be a huge issue in the future. I think there is a huge affordability issue for people in the workforce. If you look at women in the workforce we are not back near the level we were at when we went into recession. If you're paying €1k a month in childcare and earning €37k a year gross, then you are basically coming home with the minimum wage. That has to change. People deserve better."

Of course the average worker she's advocating for still lumbers under the enormous yoke, in the form of €29bn debt, placed around their necks by Anglo Irish Bank. Heraty was a non-executive director at Anglo (though she resigned relatively early in the downfall of the bank), and Anglo was also a client of CPL; In 2007, CPL received €263,000 in fees from Anglo Irish Bank for services, and a further €78,000 in 2008. Heraty herself reportedly received €110,000 in fees from Anglo in 2008.

Given these various connections between the bank and the company she heads, I wonder firstly if she felt that CPL was damaged by her association with the bank.

"As far as I was concerned I did my best and acted with integrity at all times. Naturally your reputation is everything. CPL is not about me. We employ nearly 700 people, so it stands on its own merits."

Of the handsome sums received by CPL she tells me: "CPL received very little in fees from Anglo. Our revenue at that point was €290m, so it wasn't that much in the context of that. I think it's been well documented.

"It was an incredibly difficult, tough time and I certainly wish that it could have been different. I feel that I operated with total integrity in terms of what I saw at the time."

But surely one of the roles of a non-executive director is to provide oversight? Everyone wondered what could have been done after the fact - but she would have seemed to have been in a fairly key position at the time. Was she a patsy on the board? Or was she giving the genuine oversight expected of someone with her position?

"My understanding at the time was that it was an open board, that subjects were raised and discussed - but in hindsight, things look different in the rear-view mirror. It was one of the most difficult periods of my life, I have to say, in terms of the outcomes. I didn't envisage the outcome of Anglo that happened."

Heraty says that she was "shocked" when she heard the Anglo tapes, in which among other memorable zingers, Anglo's former senior executive, John Bowe, is heard saying that the infamous €7bn bailout figure was "picked out of my arse".

She hesitates when asked when she knew that the game was up for Anglo and when the enormity of the situation hit home to her.

"The worst moment for me was seeing and understanding that people had lost a lot of their money... When I talk about shareholders, I'm talking about small shareholders and the cost to the taxpayer, obviously."

One tends to believe her when she says it was a difficult time. Following her resignation from the board of Anglo she also stepped down from the boards of Bord Na Móna, Forfás and the Irish Stock Exchange. Over the following years the bottom would fall out of the Irish jobs market, even if CPL was helped through the recession by the fact that it had relatively low borrowings and a strong balance sheet.

Over the last couple of years the company has handily outpaced national recovery. Pre-tax profits fell to the year ending June 30 but revenues remained higher. They rose 6.6pc from €369.2m to €393.6m over the year. Gross profit increased 7.3pc or €4m to €58.7m from €54.6m in 2014. It's a story of resurgence for a company at the coal face of the jobs market - and from her corner office Heraty tells me that a certain agility and flexibility, honed during the dotcom crash of the early 2000s, was the key to weathering the storm.

"We are a different business now than we were at the height of the last boom, that's for sure. A significantly higher proportion of our business comes from outsourcing and temp staff. Flexibility is a huge driver for us."

Heraty says that the nature of the business makes it difficult to put figure on the size of CPL's market share.

"It's hard to give good detail on the market because we operate in a number of different sectors and do both permanent and contract workers. There are very few companies in Ireland shaped like us. There's roughly 1.9 million workers in Ireland, of those 600,000 work in the public sector - so that leaves us with an addressable market of 1.3 million. In healthcare we're the number one player. In IT and the tech sector we are in the top three. Finance we're in the top five."

What's their weakest area?

"Well, our newest area is on the energy side."

In September CPL made an acquisition in the UK in of a pharma and life sciences business, Clinical Professionals. "That will help us build out of business in the UK," Heraty says. "At the moment there aren't further acquisitions on the radar. We are evaluating acquisitions all the time though."

Among her many awards, Heraty won the EY Entrepreneur of the Year in 2006. She's chairing this year's judging panel and tells me that the qualities she'll be looking for are "vision, creativity, ambition and drive".

All of which she would seem to have in spades herself.

In person she looks strikingly like a corporate version of Maria Doyle Kennedy and like the singer/actress her star began to rise in the early Nineties. Before that there was a childhood in Longford, where she grew up, the second youngest in a family of six.

"We had a local shop and a farm. I worked in the business and I loved it. I went to college and did a degree in maths and economics in UCD. I came out of college in 1984 and it was a grim era in terms of the jobs market. I registered with an employment agency and got a job in telesales."

She joined a recruitment company a year and a half later and they trained her in the business but baulked at her suggestion that she be allowed to specialise solely in the tech market.

Her then-boyfriend-now-husband Paul Carroll suggested she go out on her own, but she didn't have any money to do so. Funding came from a husband of a friend of hers, who had previously offered her a job with his own recruitment company. She acknowledges that she was very much in the right place at the right time.

"I couldn't have known it would have grown the way it did all through the Nineties. The best place in the world to be was in tech and toward the end of the decade we did the IPO."

With that IPO Heraty became one of the wealthiest women in Ireland. Along with husband Paul Carroll, the Rathgar-based enterpreneur owns a 40.7pc in stake - worth some €64m - in CPL. According to this year's rich list, earnings from fees, rents and a €20m share tender offer add another €19m. Heraty is also an investor in a student accommodation scheme.

She and Caroll have two children together and their eldest, Amy, is now a law student in Berlin. "I've heard it's where the young go to retire," she laughs.

I wonder what it's like being boss to her husband and if they bring work home with them.

"We don't deal with each other day-to-day. Paul is very much on the whole business development side of things. We have 14 on the leadership team - so, as you can imagine, there's always a lot going on across the team. You couldn't be bringing it home every night."

Perhaps the most difficult moment for the company in the early years was the dotcom crash of the early 2000s which decimated their business. "We still wanted to maintain the specialist ethos but needed a new strategy. We decided after that we would never again be over reliant on any one particular sector, geography or focus. That pivot also helped hugely in terms of the recession we've just gone through."

She has enough to retire several times over but tells me that's not on the cards. In fact she struggles to come up with an answer when I ask her what her interests are outside of business and family.

"This isn't just work for me, it's a passion. I love what I do. I see your career right up there with your health, wealth and happiness and when you see people getting satisfaction from it that's where the real buzz for me comes from."

Anne Heraty chairs the judging panel for the EY Entrepreneur of the Year Awards which will broadcast on UTV Ireland this Thursday at 10.30pm

Turnover is vanity, cash is sanity

The moment I thought I’d made it was...“Whenever we win a really big client we always celebrate. In business you’ve got to understand why you won, just as when you lose you have to understand why you lost.”

The best advice I’ve ever been given was...

“My mother was a big influence and she had a saying: ‘Turnover is vanity, cash is sanity’ — and in the early stages of CPL that certainly stood us in good stead.

The most broke I’ve ever been was...“I went to France when I was 20 and arrived in Paris with the equivalent of about €10. I hitched on my own to Nancy and got a lift with a young couple, then I couldn’t find the address I was staying and they drove around for two hours to find my place. They were different times.”

The best thing that money has bought me is...

“The freedom to make good choices.”

My passions outside of business and family are... “Those two take up a lot of my life. I am passionate about supporting people starting business and women in business.”

My greatest extravagance is... “Shoes. I love all sorts of shoes.”

The best trip I’ve taken recently is... “To Italy. I always love going there.”

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