In this edition of The Hardware Journal, we checked in with HPC Group’s Sean Moran to speak about his new role as HAI President.
For those who aren’t familiar with you, could you give us a little bit about your background, and your journey to where you are now?
I am CEO and majority shareholder of the HPC Group. HPC currently has fourteen trading units around the country, employing 250 people, and operates such trading brands as T J O’Mahonys, C+D Providers, PH Ross, Commons Hardware and McCarthys Hardware.
I have held a variety of roles in my career to date, most of which were with businesses in or associated with the construction industry and supply of building and DIY materials. I am a qualified accountant (FCCA) but I moved away from pure financial roles earlier in my career as I always had a preference for more commercial, general management and leadership roles.
I spent twelve years with a company called Stone Developments, part of the Sisk group of companies, where originally, I was Financial Controller of their Irish and UK operations before being appointed Managing Director in 1995.
I first became involved in the builders’ merchant sector in 2001 when I was appointed Managing Director of the McMahon Group. There I was responsible for the group’s
builders’ merchant business, including four trading units in Northern Ireland.
The current leg of my journey began in 2005 when I joined Moritz Holdings, a large house building and property holding/development company, as Managing Director of Moritz Trading. There, I ran the builders’ merchant division and was responsible for implementing an ambitious diversification and growth strategy. As part of this, we acquired a number of leading independent builders’ providers businesses on the east coast including Commons Hardware, T J O’Mahonys and C+D Providers.
The severe downturn in the economy and construction industry led to NAMA taking over a significant portion of Moritz Holdings loans and in 2012, as part of a group restructuring, I led the management team, which included the current HPC Managing Director Dennis O’Connor, in a buyout of the trading business.
Following the buyout and restructuring, we have grown the business substantially by a combination of acquisitions and new branch openings and HPC is now firmly established as one of the leading players in the builders’ merchant and DIY sector in Ireland.
What drew you to the Presidential role and how will you approach your term as HAI President?
I have been an executive board member of the Association for the past four years and have held the role of Treasurer for the last two years. I think that continuity is very important for an association such as the HAI and having worked closely with the outgoing president, Kieran Burke and the CEO of the HAI, Annemarie Harte, and also the Executive Committee for the past few years, I suppose I became the person somewhat next in line to move up and take on the role. Having a sensible succession plan in place is vital in any organisation and it is important to keep refreshing the Executive Committee and ensure we bring through new ideas and remain relevant for all our members in what continues to be a challenging environment for the sector. In this regard, I think two years is the optimum
term for the role of president of the association, particularly when members have already served on the Executive Committee.
I am really looking forward to my term as president, where I hope to successfully build on the excellent work of Kieran and other past presidents. I intend to fully commit to the role and work closely with the Executive Committee and provide relevant and active support to the CEO, Annemarie, and her team. As I’m sure every past president has said, I hope the association is in (further) improved shape when my term as president is over in two years’ time!
How strongly do you feel the Irish merchanting and hardware sector is doing overall and from your experience, do you feel that there is a contrast between rural and urban demand and performance?
I think the sector is doing reasonably well. 2018 was a bit of a strange year, where activity levels perhaps were not quite as strong as many predicted and the year was impacted somewhat by a number of economic factors, not least of which is our inability to effectively tackle the housing crisis and the ongoing Brexit saga, the uncertainty surrounding which continues to weigh heavily on Irish economic sentiment.
Obviously, the sector is in a much better place than it was in the period 2008 to 2013 and continues its recovery on the back of significantly improved economic conditions. Businesses based in the larger population centres and, in particular, the greater Dublin area have recovered much faster and continue to witness larger growth rates than their rural counterparts. However, the overall economy would benefit from a better balance in the Urban/Rural recovery and fairly immediate initiatives are now required to deliver projects designed to generate sustainable regeneration in towns and rural communities around the country.
The Brexit deadline is fast approaching. What are your main concerns for Irish business in the event of an unfavourable outcome? Besides Brexit, is there anything else that you feel requires economic consideration in the coming years from a business standpoint?
Every news story for the past two years has carried some form of report or provided some update on Brexit. At this stage we are probably all agreed that whatever shape or form Brexit takes, it will not be good news for Ireland. We will have to deal with whatever negative effects there are from this. It is impossible to plan for something where the
outcome is unknown!
Closer to home, the biggest issue I think we face as an economy and an industry is the housing crisis and the urgent requirement to close the gap between supply and demand. In my view, despite the overall improvement in the economy, the residential construction market remains somewhat dysfunctional and it will be some time yet before we see an effective resolution. Affordability, or lack of it, and the availability of finance are, I believe, at the heart of the issue here.
The Central Bank remains fairly intent on maintaining and enforcing its mortgage rules governing the amount available to borrow against the purchase of a house and this, coupled with ongoing high levels of personal taxation makes it very difficult and, in many cases impossible, for young people to afford to buy a home of their own.
However, despite this, the demand is there and, we need to be building 35,000 new homes per annum before we catch up with that demand. This year, estimates suggest 17,000 to 18,000 new homes will be completed, so a considerable gap still remains.
From your position of expertise, how do you assess the outlook for the Irish economy as a whole in the short to medium term?
Given the challenges that it faced, I think the Irish economy has performed extraordinarily well over the past number of years and all the statistics show it continues to outperform
all other European economies. GDP growth is in the region of 7.4% for 2018 and unemployment has now fallen to 5.3%. While the rate of growth is likely to moderate this year, unemployment will continue to fall further towards the previous record low of 3.9%. In addition, we now have a record number of people employed in Ireland at 2,265,000.
What do you believe are some of the most important services offered by the HAI and what changes, if any, do you plan to implement in your new role?
The HAI is somewhat of a unique organisation focusing on the entire hardware and builders’ merchant sector, representing the interests of hardware stores, DIY retailers,
builders’ merchants and the suppliers to the sector – manufacturers and importers/distributors. In recent years, the HAI has both grown and refined the services it offers to members. These include:
- Market Intelligence – The HAI Business Index – The HAI Business Index was developed to provide more accurate and reliable information on our sector and, in particular, sales information. The credibility of the information and the overall service is totally reliant on members’ input. The more members that participate in the index, the more reliable and accurate the information is. This will remain an important service of the HAI going forward.
- Training and Development – The association has built a reputation for providing relevant training across a wide range of disciplines for its members. 2018 was a particularly successful year for the association in this regard and all courses were delivered in a professional and very cost effective manner for members.
- Careers Portal – Hardwarejobs.ie – The launch of the new careers portal, hardwarejobs.ie, in 2018 was a very significant development for the association and has been very well received by the members. This portal provides a service to members where they can post any available job vacancies.
- The Hardware Journal – The bi-monthly publication is the official magazine of the association and it is an excellent publication full of informative articles and details on a wide range of issues relevant to the sector. Following changes made in 2018 the design and production of the magazine is now entirely under the control of the association and is managed by Annemarie and her team.
- Business Support – The association is focused on and committed to adding value to its members’ business. In this regard it has partnered with a number of service providers and advisors and can arrange access to all these for members, if and when required.
- Representing and Lobbying – Over the years the HAI has been very successful in representing the sector and lobbying government. The Hardware and Builders’ merchant sector needs to maintain a very loud voice and in order for it to continue to be effective in lobbying government, individual members need to remain engaged with the HAI.
My role as President will be, in conjunction with the Executive Committee, to offer support and guidance, where appropriate, to the CEO and her team to ensure the association remains relevant for all its members and that it responds effectively to the needs of those members.
How do you rate the importance of the HAI as an engagement and networking tool, and what’s your opinion on the importance of networking in this industry, particularly in relation to how you utilise it in your own business?
All the events run by the HAI afford its members the opportunity to engage and network with other members and share experiences and opinions on trading and a wide range of topics. The feedback the association gets has been very consistent in this regard in that all members value this networking very highly.
In the HPC Group, we place significant importance on networking and engaging with other members of the association. We regularly avail of the services the association provides and support all the events it runs. No single business has the monopoly on good ideas or the
best way to manage aspects of a business, and we have found that networking has provided us with some great insights into how others view the business and respond to
What do you think will be the most important driver of change in the industry in the next few years?
In the years ahead, one important driver of change in our sector will be technology. Our sector has always been seen as quite traditional with more conventional methods of
operating and is, perhaps, less dynamic than many other industries. This has begun to change, as many businesses react to developments in online shopping and changes
in consumer behaviour. In addition, many businesses are engaging with and availing of the latest technologies in an attempt to streamline many processes, eliminate all paper in processing transactions and interacting with customer accounts and achieve much-needed efficiencies.