Expert warns firms to get a grip on Brexit

COMPANIES in Hampshire need to get to grips with the new Brexit economic reality, an insolvency specialist has warned.

Tuesday, 27th December 2016, 5:55 am
Updated Thursday, 29th December 2016, 2:58 pm
Greg Palfrey

He said that a forward-looking and robust financial and operational plan will bring benefits to any business if they are to get a better handle on the potential affects of Brexit.

Greg Palfrey, who leads restructuring and recovery services for Smith & Williamson in the UK, said there are businesses which have not yet got to grips with the new economic reality.

Mr Palfrey, who works at the south coast office which covers Portsmouth, highlighted the issues to scores of business leaders at business breakfast seminars hosted by Smith & Williamson, an accountancy, investment management and tax group.

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He said: ‘Many people did not expect, or plan for, a leave result in the EU referendum.

‘This lack of advance planning, weaknesses in management information and the economic events following the referendum has made decision-making difficult for senior management.

‘We have already seen businesses in a number of industries showing signs of cash pressure as well as concerns about long-term viability from changes in, for example, exchange rates.’

He added: ‘There are companies which trade with the EU but still haven’t got to grips with the reality of this very uncertain period, even though the Brexit process is scheduled to formally begin before next March with the triggering of Article 50.

‘While we do not know what will be in any agreement reached, companies should prepare for any situation by putting together robust financial models based on existing terms of trade and expectations.

‘When the details are known and such terms or other factors/variables change, then the model can be re-run to reflect this and the company can then measure the impact and take actions, where possible, to mitigate or exploit the change.’

He warned businesses to take advice and plan ahead.

He added: ‘Unless businesses grasp the post-Brexit nettle and think about financial forecasting, including exchange-rate fluctuations, some companies here in the south will see their trading and cash positions deteriorate.’