We recommend modeling scenarios that take into effect the impact of Brexit on your future UK Capex expansion plans or Acquisitions. At minimum, try out some of the tips from the presentation within your financial Go/No-Go models. These scenarios will also be useful while planning Joint Ventures or Partnering deals.

1. Crescendus™
Tip of the Day: June 27, 2016
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UK GREENFIELD EXPANSION (after Brexit)
Companies that were planningto expand in the UK in 2016/2017 should prepare for
prolonged uncertainty,which may lead to downward pressures on the UK pound. This
uncertainty can last for 2-4 yrs. As a result, all capex expansion plans,and in certain
cases, even planned acquisitions should be re-evaluated by your operations and finance
teams. Model event scenarios using 5-30% drop in the current value of the UK pound and
also dropping customer confidence. In addition,model other contingency event
scenarios, where each event has an additionaldiscount rate contribution.These events
could include regulatory burden (within the UK and between UK-EU future interactions).
Model your returns (IRR, ROIC, FCF, etc.) under such events and see where the cut-off line
is for your company. If you are a US company, model an additional event with stronger US
dollar and its impact on cross-border currency effects/financialreporting.