Brexit makes FX Strategy vital for marine sector

As negotiations between the EU and UK Government trundle along, the prospect of Brexit continues to impact on so many areas of Britain’s economy, including its leisure marine sector, writes Nathan Abbott.

On one hand the industry seems unaffected by the UK’s imminent departure from the European Union - in January, the British Marine Federation reported how sales in the luxury boating market rose by 1.6%, surpassing £3bn for the first time since the 2008 financial crash.

While consumers appear to be increasing spending, Brexit is, however, having an adverse impact on the industry, especially on agents, due to the fall in the value of the Pound after the 2016 referendum result and its on-going volatility.

This has created a particular issue for UK agents as more of their international customers are now choosing to pay in Sterling due the currently beneficial exchange rate. Agents must however raise Euros to pay European boat manufacturers but, because the negotiation period can take up to six months, they risk losing out.

Although they will factor in the exchange rates, any further de-valuation in the Pound in that time can erode any profits the agent might have forecast. Their dilemma is they risk losing money in transactions but raising their costs to cover any shortfall resulting from foreign exchange (FX) rate fluctuations may drive international client towards European companies and threaten the long term viability of their business. 

As a result, online currency companies say they are seeing more and more UK-based marine agents and other companies seeking guidance and support in hedging their currency exposure in an attempt to mitigate this risk.

Through a range of hedging contracts including forward/FX options which are bespoke and designed to deliver flexibility and convenience, they can avoid these risks and protect their profitability as the uncertainty of Brexit continues.


Nathan Abbott is an online currency consultant at London-based foreign exchange company, Global Reach Partners.    

Latest Press Releases

The International Paint Poole Regatta - Shaping up to be even Bigger in 2020

The International Paint Poole Regatta 2020 is developing to be the biggest event yet, with the organ... Read more

MS Amlin Seamanship Award Entries Close on the 20th August

Your chance to enter the MS Amlin Seamanship Award 2019 closes at midnight on Tuesday 20th August. Read more

Damage to the Environment - Episode 5 of 80 Seconds with Sir Robin Knox-Johnston

Sir Robin Knox-Johnston and Dee Caffari look at how the environment at sea has been damaged over the... Read more

MS Amlin Go Round the Island 2019

MS Amlin Yacht, the boat insurance specialists have now been race partners of Round the Island Race ... Read more

The Future of Yacht Design - Episode 4 of 80 Seconds with Sir Robin Knox-Johnston

Sir Robin Knox-Johnston and Dee Caffari discuss changes in yacht design during Sir Robin’s sailing c... Read more

MS Amlin Seamanship Award Expanded for 2019

The MS Amlin Seamanship Award 2019 is now open for nominations. Having run for many years as a comp... Read more

View all