Richard Timmins, ex-FD of Andersen, currently FD of Watson Wyatt.
Thomas Chambers, FD Symbian.
Ramin Khadem, FD Inmarsat.
Deena Mattar, FD Kier Group.
John Nicholas, FD Kidde.
Ian Plaistowe, outgoing chairman, Auditing Practices Board.
WHAT ARE THE BIGGEST ISSUES YOU FACE IN 2003?
Timmins: Making the right investment decisions in an uncertain market, driving cost efficiency and ensuring that major projects are managed effectively.
Khadem: The state of the world economy, as we are dependent on global enterprises’ activities.
Nicholas: The strength of sterling and the impact of translating overseas results. Also, insurance costs and the uncertainty of a war with Iraq and the consequences of a conflict.
Chambers: Symbian’s revenue comes from consulting and the $5 we receive each time a phone that uses the Symbian operating system is shipped. We launched three phones in H2 2002 with 20 phones in development. Therefore, it’s extremely difficult to set expectations as to the royalty revenue and therefore the EBIT of Symbian.
Mattar: A potential slow-down in our sector as well as pensions issues.
Plaistowe: The biggest issues for the Auditing Practices Board in 2003 are, first, to plan for the probable requirement to use international standards of auditing in 2005 which the European commission is proposing, and, second, to ensure that all parties involved in considering the implications of APB’s critical paper on Aggressive Earnings Management come up with some sensible and practical ideas.
DO YOU EXPECT THE UK TO GO INTO RECESSION IN 2003 OR WILL WE AVOID IT?
Timmins: We’ll avoid it and we will start to see some recovery.
Khadem: I’m cautiously optimistic that the UK economy will avoid recession next year.
Nicholas: We will avoid recession.
Chambers: It will be a close call as to whether we avoid it or not.
Mattar: I think we will avoid it.
Plaistowe: I think that the UK economy will bump along in 2003 with minimal growth. Whether or not it will slip into recession will be a very close call.
WILL 2003 SEE MORE ACCOUNTING SCANDALS COME TO LIGHT?
Timmins: Yes – everyone’s looking out for the next one and I’m sure that they will find something.
Nicholas: No. But examples will be made of those responsible for past scandals and the issue will remain in the news.
Chambers: No, I think that 2002 saw a cleaning up of these matters so all participants are well aware of the issues being faced.
Plaistowe: There may well be a few accounting scandals revealed in 2003, but nothing quite on the scale of those disclosed in 2002.
THE FTSE-100 STANDS AT AROUND 4,000 AT THE END OF 2002, DOWN FROM 5,217 AT THE BEGINNING OF 2002. WHAT DO YOU THINK ITS VALUE WILL BE AT THE END OF 2003?
Timmins: I’ll say 4,750 – though you should really ask the experts in the Watson Wyatt investment team rather than me.
Khadem: At a wild guess: 4,700.
Chambers: The joy of not being a public company means that Symbian is not exposed at this time to the general ups and downs in sentiments. I’ll go for a modest rise, say, to 4,400.
Plaistowe: I expect the FTSE-100 to be around 4,500.
WHAT ADVICE DO YOU HAVE FOR FDS IN 2003?
Timmins: Don’t under-estimate the value of a motivated workforce who feel well rewarded. And keep some balance in your cost control.
Khadem: Focus uniquely on the core business and what you are best at, and avoid distraction with activities that provide marginal contribution to the bottom line/EBITDA.
Nicholas: Keep things tight but watch for opportunities to invest in the future. The arrival of better conditions is only a matter of time.
Chambers: Set expectations and ensure that they are met, or change them in good time. Be as open and as up-front with reporting as possible with sensible easily understood measures of performance. We are after long-term sustainable success.
Mattar: Honesty and transparency are always the best policy.
Plaistowe: My advice is to ensure that you do everything in your power to raise the credibility of financial reporting. Last year was a disastrous one for financial reporting – and that increases the cost of capital for everyone.