CFOs at UK companies keenest to cut costs

6 January 2012

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6 January 2012 | Helen Gilbert

Cutting costs is a higher priority for UK-focused businesses than those with a more global reach, according to a research report.

Priorities for 2012: Cash and Costs, published on Tuesday by accountancy firm Deloitte, revealed that 50 per cent of chief financial officers (CFOs) at companies that generate at least 70 per cent of revenues in the UK see cutting costs as a priority for the next 12 months. However, just 29 per cent of those at more internationally focused companies, generating less than 30 per cent of revenues in the UK, saw it as a top priority.

The same was also true of increasing cash flow, with 47 per cent of UK CFOs prioritising it compared with just 26 per cent of their international counterparts.

The report, which surveyed 94 CFOs in all, said: “Businesses with a strong international presence are less pessimistic than UK-facing businesses and have a somewhat higher appetite for risk. This fits with the view that activity in 2012 will be stronger outside Europe than in it.”

This view is supported by the finding that the risk of a break up of the euro posed the biggest concern to CFOs. This was closely followed by fears of a recession – on average finance chiefs see a 54 per cent chance of the UK suffering a ‘double dip’ – and expect the economy to remain weak for a prolonged period.

Despite the uncertainties, the fourth quarter report found that nearly half (48 per cent) think troubled times create new opportunities. While 87 per cent think it is a bad time to take additional risk onto their balance sheets, nearly one in eight plan to develop new offerings to meet needs created by a difficult macro environment.

“The CFO survey testifies to the risks, but it also maps how CFOs are responding - with a renewed focus on cost control and cash flow and a search for growth opportunities,” the report said.

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