Nigel Barratt, head of HURST Corporate Finance, has contributed to a new book, ‘Doing Business After Brexit’. The book, written and compiled by Helen Tse, a partner in the Manchester office of law firm Clarke Willmott, will be published by Bloomsbury later this month. It is a practical guide to the legal issues facing businesses as a result of Britain leaving the EU.
Nigel has contributed to a series of thought-leadership pieces suggesting steps that UK companies can take to mitigate against any Brexit-related risks. An event organised by Pro Manchester to celebrate the book launch will be held in the city centre next month. Speakers will include Sir John Timpson and Clarke Willmott chief executive Stephen Rosser, who have all contributed to the book.
Nigel’s article looks at the likely impact of Brexit on companies’ ability to access funding, as well as the mergers and acquisitions market. He says that, while the adverse exchange rate since the referendum has hurt those reliant on imports, it is mostly business as usual, and he urges companies to consider a range of potential outcomes and risks from Brexit.
Nigel comments that there is some credence to the argument that, from a trade perspective, the EU needs the UK and that this may help in negotiations. He also notes that other parts of the world are becoming increasingly important for UK businesses trading overseas. Of the top 20 fastest-growing export markets, only four are in the EU. Freedom from EU regulations may also enable our government to alter its tax policies for investors in UK businesses, widening the scope of qualifying investments and therefore providing greater access to capital for SMEs, he writes.
Nigel points out, however, that the bewildering complexity of Brexit should not be underestimated. Its implementation could be hugely complicated and could profoundly affect UK businesses, even if they do not export to the EU.
To help companies needing to raise capital, he lists some key issues that funders will consider in the post-Brexit era.
- Examining whether the business is UK-centric – if so, it will be considered lower risk;
- Seeing whether the business benefits from Brexit uncertainty. For example, those involved in global logistics or foreign exchange management for clients are arguably in a good position, as outsourcing of these activities may increase;
- Looking at supply chain and whether they can cope with changes in ‘frictionless trade’;
- Ensuring companies can continue to access skills and labour;
- Checking that businesses can manage increased currency risk;
- How reliant firms are on EU markets and how capable they are of entering new markets.
Nigel adds: “I don’t see Brexit resulting in any significant changes in direct government funding support for businesses in the form of grants and subsidies. “So funding for growth will have to come from our financial markets, which continue to remain strong.” The banks are still keen to lend, and private equity institutions are well-funded and eager to support businesses to achieve growth and facilitate ownership change, with more money available for smaller firms.
The capital markets have performed strongly, too. “In the short-term, I don’t see the fundamentals changing,” writes Nigel. He says companies with an attractive funding proposition which can address the risk factors should still be able to access finance, as long as the UK economy remains in good shape.
The Brexit process doesn’t appear so far to have had any impact on businesses seeking overseas investment.Nigel writes: “Our recent experience is that overseas businesses are prepared to invest in, or acquire, UK businesses. “At one level, the desire to do so is driven by access to the EU, and therefore the continuation of such inward investment will have a question mark over it. “However, the UK will continue to be an attractive place to do business, from a language, cultural and market perspective.”
There is much to play for, and in any event the Brexit process will take years to complete, he says.
You can purchase 'Doing Business After Brexit' by clicking here. The book is being launched at a Pro-Manchester event with a panel of guest speakers including Helen Tse MBE, partner of Clarke Willmott - click here to reserve your ticket!