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High stakes in extraordinary times - KPMG on the Brexit endgame

James Stewart - head of Brexit, KPMG

With 75 days to go to Brexit, KPMG is one of the few consulting firms to put its head above the barricades.

James Stewart, Head of Brexit at KPMG UK said today, "These are extraordinary times for business, a period when nobody seems to know what's going to happen and the stakes are sky high. Despite the parliamentary gridlock most business people still expect some sort of deal to be done somehow. However confidence is thinning and we continue to see heavy client activity on no-deal planning.

"A number of UK businesses are looking very closely at their working capital and financing. This means pricing up any potential penalties and the direct financial costs of a no-deal situation.

Reputation

"Others, particularly foreign owned multinationals, don't really see cashflow as their primary issue. For them Brexit is more about reputation, margins and new regulatory hurdles. We think everyone should be looking at contracts, supply chain security and workforce planning. Even at this stage we are still seeing massive variations in preparedness.

Exposed

"Firms that are capital intensive or operating a negative working capital model will be particularly vulnerable to cost or revenue shocks. Also companies who sell in sterling and buy in dollars could be in real trouble if they haven't hedged correctly. A raft of businesses in automotive, retail and hospitality remain very exposed."

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