“Brace! Brace!” No Deal = hard-landing

“Brace! Brace!” No Deal = hard-landing

Over 75% of CFOs we have engaged with these past 6 months have been unequivocal about how negatively Brexit will affect their business.  Many have commented that they are cautious about capital expenditure and M&A activity. A recent Deloitte survey highlighted similar findings. So at the ‘coal-face’ of business, what are we seeing and hearing?

  • Despite uncertainty, our Interim Finance Practice has seen a large increase in demand for interim professionals. These have tended to be supporting finance transformation programmes and ERP system integration projects to reduce back office processes for P2P, O2C and R2R. On the flip-side however, large scale expansion projects have been put on hold by some clients.
  • Over 70% of CFOs said they are preparing for the hardest of Brexits. Whilst they are hoping for the best, they have planned for a No Deal with many Clients having already spent significant amounts of capital moving manufacturing and logistics out of the UK to ensure business continuity. With continued uncertainty, some manufacturing organisations have either moved, or are considering moving, a proportion of their operations internationally. This has been driven by significant labour savings, mitigating the risk of No Deal, supply chain challenges etc.
  • A recent survey of consumer behaviour found that the economic outlook over the next 12 months was the weakest since December 2011. This sentiment is not only a challenge for business generally, but particularly on the high street, with the woes of many retailers being dramatically played out across the media.
  • The political and economic uncertainty has prompted an increasing number of businesses to deploy Interim Management Consultants to support and deliver operational transformation. During the start of 2019, we experienced a 42% increase in demand for Interim professionals with the ability to transform finance target operating model through greater efficiencies by utilising ERP systems to automate processes.
  • The Private Equity (PE) market continues to grow with significant amounts of capital invested in SME’s across areas such as Fintech, Ecommerce, and FMCG. Many PE Clients have commented on the significant levels of competition for quality deals and transformational talent. We are seeing significant levels of M&A activity which has led to an uptick in businesses requiring Interim Financial Directors to help with the due diligence and acquisition integration. Often these businesses need increased levels of controls and governance to ensure the finance operations are professionalised and fit for purpose. This in turn has meant strong demands for Interim Financial Controllers.
  • Our prediction for 2019 is, continued high levels of demand across AIM and FTSE Small Cap businesses requiring Interim professionals who are equipped with technical competences such as FP&A, Treasury, Commercial Finance, and Group Financial Control.

Due to the unprecedented uncertainty, businesses need more flexible resource that is competent, experienced, unafraid of change, and can be effective immediately. At a time when Clients are unwilling to over commit on hiring permanent resource, Interims are increasingly seen as a cost effective human capital solution which will delivers results.

If you would like to find out more about how we can help you, or discuss a specific assignment, please do not hesitate to contact Jonathan Stringer, Director – Interim Finance Officers Practice on +44 (0) 20 7484 0036/+44 (0) 7483 015 307 or jonathan.stringer@normanbroadbentinterim.com