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

Fairline Yachts announces line-up for Boot Düsseldorf 2019

Boot Düsseldorf – 19-27 January 2019 – Hall 6, Stand D21 Read more

Luxury boat builder Fairline Yachts announces recruitment drive following boat show success

Luxury British boatbuilder, Fairline Yachts, announces it is recruiting over 100 boat builders in a ... Read more

Helly Hansen & American Magic to Take on the America’s Cup

SUMNER, WA. (October 25, 2018) — Helly Hansen, the Norway-based global leader in sailing, today anno... Read more

See the US debut of Fairline’s Targa 43 OPEN at this year’s Fort Lauderdale International Boat Show

British luxury motor yacht manufacturer, Fairline Yachts, is hosting the US debut of its new Targa 4... Read more

Shakespeare Marine to Launch the World’s First Inflatable Emergency VHF Antenna at METSTRADE 2018

Shakespeare® Marine, world leader in marine antenna design, announces it is launching the, the world... Read more

Fairline Yachts to strengthen management team

Since its launch just over two years ago, Fairline Yachts has been winning awards for its new models... Read more

View all