Two thirds of UK SME’s say currency volatility created by Brexit has cost them £70,000 each – Report by Bibby Financial Services
Irish exporters encouraged to put practices in place to
safeguard against the fluctuating pound
More than two-thirds of UK SMEs trading in foreign currencies say that they have been financially disadvantaged to the tune of £70,000 due to currency volatility sparked by the EU referendum, according to a new study by leading SME partner, Bibby Financial Services (BFS).
A leading provider of financial support and funding solutions to Irish SME’s, the company helps businesses to thrive and grow in domestic and international markets by providing bespoke financial assistance and a wide range of specialist and working capital funding options.
Findings of the ‘Trading Places’ report reveal that 67 per cent of UK businesses with foreign exchange requirements say they have been adversely affected by currency volatility in the past 12 months, with an estimated financial impact of £69,669 (approximately €79,000) each.
The research found that currency volatility is the biggest challenge faced by UK importers and exporters today. Other key challenges for exporters include paperwork and administration, and logistics management. For importers, logistics and managing duty, VAT and freight payments were the main issues.
Despite currency volatility featuring as the top concern for both importers and exporters, research also found that almost a quarter of UK SMEs trading overseas (23%) have never reviewed their foreign exchange arrangements to see if they could better protect themselves against future volatility.
The Global Business Monitor, a report issued by Bibby Financial Services recently, shows that 20% of Irish SME’s see currency fluctuations as a barrier to international trade. The survey also shows that geo-political events loom large in the minds of Irish respondents, with 69% viewing Brexit as the top threat to global economic growth amongst Irish SME’s in 2017.
Mark O’Rourke, Head of Business with Bibby Financial Services Ireland, said:
“These figures from the UK are quite stark. While we don’t have figures for Ireland, we need to be aware that currency volatility will impact the bottom line for Irish SME’s who import or export. This report is a warning bell for Irish companies that they should be putting practices in place to safeguard against the fluctuating pound. By far the greatest challenge facing Irish SME’s importing and exporting is currency volatility. No matter how big or small and SME is, managing currency risk in today’s economic environment is vital. The businesses that will be successful in the long-term are those that are planning ahead and thinking strategically about how they can protect profit margins.”
Bibby Financial Services Ireland (BFSI) is a leading provider of financial support and funding solutions to Irish SME’s.
A member of the Asset Based Finance Association, Bibby Financial Services Ireland’s funding portfolio includes invoice discounting, factoring, export finance, foreign exchange services and specialist funding for a range of sectors.
Bibby Financial Services Ireland is part of Bibby Financial Services Group, an independent financial services partner to over 10,000 businesses across 13 countries. The Irish operation was established in 2006 and has an expert team of 30 employees based in Sandyford, Dublin.