Design Factory boss Stephen Kavanagh's favourite pastime is following yacht races across the bay with his binoculars from the deck of their Dalkey bungalow. Most free days, he is actually out there tacking across to Howth with the rest of his team.

"The night-time view is fabulous. People get a kick out of aeroplanes. I get a buzz from spotting flashing lights at sea and knowing who's out there.

"I was brought up with the sea. My grandparents owned the Howth Lodge and they lived in a house on Claremont Strand. My father was a publican, but there was more sea in his blood than alcohol.

"He wanted me to work on trawlers, so I went to sea for a few months and got accepted to study for my skipper ticket. In the end, I went for art - now I have the best of both design and sailing."

It was his passion for the sea that brought Stephen in contact with his Brazilian wife Louiza. He took time out after graduating from the National College of Art and Design, sailing a 65-ft yacht to Rio for a friend in 1983 when he was just 21.

Two months after Stephen arrived in Rio, he met Louiza at a party and eventually persuaded her to come back with him to Ireland. Leaving family, career and the benevolent Brazilian climate was not easy and Louiza found the adjustment difficult at first. "I was an English teacher in Rio, so I couldn't get a job here because I wasn't Irish. There are plenty of native speakers here to teach the subject.

"And the weather . . . at home, I never had a jumper on - even when we celebrated Christmas on December 24th, we ate cold food on Ipanema beach."

With their two children, Michaella and Amanda now aged eight and 14, Louiza is well settled in Dalkey and "more Irish than the girls next door", according to Stephen. A fine needlewoman, Louiza joined a craft group shortly after arriving and the walls of their Dalkey home are decorated with examples of her work.

They found the bungalow almost by accident 10 years ago, after a disappointing day when a house they were bidding for in Dalkey exceeded their price limit.

"We drove up here and saw the 'for sale' sign," says Stephen. Although the house was "in bits", the panoramic view of the sea immediately attracted Stephen. "I only saw the hill," laughs Louiza.

The owners wanted a quick sale, so the Kavanaghs decided to buy there and then, paying £106,000, which was a substantial sum in those times. When they moved into the empty house, it was obvious that the bungalow needed a face-lift.

"We nearly cried - everything had been pulled out by the previous owners and it looked very sad," says Louiza.

Solidly built in granite about 55 years ago, the house "might not have a square wall, but it is well built", says Stephen, and will never fall down. They rearranged the interior, installing timber windows, Junckers wood floors and a kitchen, which is now about to be revamped.

Their favourite room is the open-plan kitchen/family sittingroom at the back of the house, which opens out to a wide cedar deck and magnificent views. An outdoor Jacuzzi set into the deck is used - Scandanavian-style - on cold winter days.

They recently added two bedrooms and a bathroom in the roof space for the two girls, freeing up a downstairs room for Louiza's sewing work.

Seascapes and photographs of yachts cover almost every wall in the house, but Stephen's day job is at The Design Factory, which he co-runs with partner Conor Clarke. Friends from art college, they had always planned to work together and when Stephen and Louiza returned from Brazil, they set up business in a room in Rathfarnham.

Twenty years later, they run one of the most successful design companies in town, specialising in corporate identities, web-based graphics and packaging.

With a friend based in Paris, Louiza is about to set up an import/export agency between Ireland, France and Brazil, using their contacts and fluency in Portuguese and French to promote trade between these countries.

Everything, however, comes back to sailing in the Kavanagh household. "I've a share in a boat in the marina at D·n Laoghaire, which we race competitively. It's very different and beautiful out there in the bay, looking back at Dalkey Sound," says Stephen.

"In Ireland, we seem to think sailing's a very expensive sport - its not. We're a land surrounded by sea, yet the French use their water facility much better than we do.

"One good thing is the development of marinas around the country, where before, we had very few places to pull into. Now it's dotted with marinas, from Arklow to Dingle. Louiza and I are very settled in Dalkey - it's a unique village. I can look out from my house and see where I used to live in Howth, but I don't think I'd go back. The DART is fantastic and you haven't lived until you've walked on Killiney Hill."