Irish firms set to do well in upcoming year despite headwinds, say company chiefs

EY survey of finance directors notes bullish outlook – with expectation of double-digit growth

Irish-based companies are on track to perform well in the upcoming financial year, despite headwinds emanating from the uncertain economic backdrop, according to a survey of chief financial officers (CFOs) by accountancy giant EY.

The average business growth rate forecast by Irish finance leaders was 12 per cent, with 28 per cent of survey respondents especially bullish, saying they expected growth to exceed 10 per cent.

"The results are testament in no small part to the agile nature of Irish business in navigating these challenges. There are some significant issues to be overcome, but it's encouraging to see that finance leaders are facing these challenges from a position of relative strength," said EY's CFO programme lead and assurance partner George Deegan.

The survey, which was made up of 152 CFOs and finance leaders in Ireland from organisations across a variety of sectors, shows that growth will primarily come from organic sources over the period.

People and talent were identified as a top priority by those surveyed, with succession planning and development planning referenced by almost a third of all finance leaders as one of the biggest priorities over the next five years.

“Instead of a ‘great resignation’, what we are witnessing is a ‘great re-evaluation’ where employees are keenly re-assessing what they want from their careers, their employers and what are the lives they want to lead,” said EY Ireland assurance partner Derarca Dennis.

“This is one of the lasting effects of the pandemic where the switch to remote and flexible working along with quite fundamental changes to business models have given employees cause as well as space to reflect on career and life priorities.”

ESG issues

The competitive business environment may be holding back investment in environmental, social and governance (ESG) goals, however, with only 15 per cent citing it is as a key financial priority.

Just 10 per cent of respondents see opportunities in sustainability and decarbonisation as a primary growth driver in the year ahead.

However, 52 per cent of finance leaders would like to spend more time on risk management, including climate risk, while 48 per cent wish to spend more time on sustainability regulatory compliance.

Ms Dennis said that as the study had been conducted at a time of intense geopolitical disruption, it may not be surprising that CFOs were focused on “steadying the ship” and short-term challenges.

“So it may be that long-term value-driving areas like ESG and sustainability have fallen temporarily down the priority list as they focus on the immediate tasks at hand,” she said.

“However, this is clearly still a cause for some concern. The finance function of the future must play a much more strategic role and that includes influencing the ESG agenda across the entire organisation as it will be finance leaders who have responsibility for reporting performance and progress on this increasingly important area.”