What are your key priorities as an FD for 2006?
Zarin Patel, BBC: Delivering the BBC’s transformation agenda
and creating an effective organisation that is able to deliver its audience
priorities with speed and agility. Substantially re-shaping the business and
finance function to become smaller and simpler and focus on value creation, with
all business processes run from a shared finance centre. Implementing IFRS and
making sense of it for our stakeholders.
Seamus Keating, LogicaCMG: Integrating our recently acquired
Unilog subsidiary (proposed acquisition for just under E1bn announced in
September this year), and achieving revenue growth and improving margins across
all our businesses.
Malcolm Wyman, SABMiller: Driving organic growth; M&A in
a consolidating industry to add growth; governance compliance; and IFRS.
Vladislav Soloviov, Rusal: For Rusal, 2006 will stand out in
terms of the number and scale of greenfield expansion projects in all areas of
our business aluminium smelting, alumina production and energy generation. To
name a few for next year: we are expecting to commission Khakass Aluminium
Smelter; achieve progress on the large-scale expansion of the Friguia Refinery
in Guinea; and jump-start our joint undertaking with Russia’s energy giant, RAO
Unified Energy Systems, to complete the Boguchanskaya hydro power plant and
construct a new smelter in the Krasnoyarsk region. These and other initiatives
will require at least $2bn (£1.13bn) of investment and my task will be to
determine the most efficient sources of financing, manage the process of raising
the funds and oversee their allocation.
Tim Jones, Interserve: Determining a sustainable pensions
funding profile and supporting cash-backed growth within all our businesses.
Nik Jhangiani, Coca-Cola Helenic: Corporate governance and S
arbox compliance; and true partnering with the organisation to: drive strategic
initiatives to meet financial targets/objectives; drive value creation
manage risks more effectively.
Are you concerned about the state of the UK or world
Patel: Not particularly for me it is key that we aim to
understand what is driving the economy, what impacts that might have on us, our
suppliers and audiences, and ensuring we are able to respond to changes.
Keating: I have some concerns about slowing UK consumer
spending and its impact on government spending and what this means for British
Wyman: I am concerned about a slowdown in demand in the
Soloviov: I think the current situation is favourable and
see few reasons for concern. The global economy is growing at a steady pace of
3.3% and shows no signs of slowing below the level of 3%, even with recent
interest rate increases.
Jones: Our major exposure is to UK public expenditure
particularly in the areas of health, defence and education. There are some
sources of concern in the state of public finances at the current time, but the
short-term impact of this is partly mitigated by the long-term nature of many of
Jhangiani: World economy concerns include: oil prices,
commodity prices; and the legislative and regulatory environment.
At the moment, the FTSE-100 index is around 5,500 up about 15% this
year. What is your expectation for the index at the end of 2006?
Patel: I am relatively optimistic 5,800.
Keating: I expect it to end around the 5,800 mark.
Soloviov: The economic growth scenario that I have outlined
above supports a higher outcome for equity markets in the coming year as
compared to 2005, assuming there are no shocks.
Jones: Flat at 5,500.
Jhangiani: Not really a key component in our sphere of
What advice do you have for finance directors for 2006?
Patel: We need to work together to find smarter ways of
dealing with the regulatory framework.
Keating: I do not presume to advise my peers.
Wyman: Implement processes to manage costs down and drive
growth; and focus on risk management and IFRS.
Soloviov: Energy costs and the US dollar exchange rate are
two key factors to watch in 2006. My advice would be to focus on cashflow and
return on capital, the best indicators of true value creation. It is important
to maintain vigilance over the cost-base and support value enhancing growth
finance directors have a key role to play in business expansion.
Jones: Focus on the basics notably high quality and timely
management information and a strong control environment while continuing to
challenge the ways in which finance can proactively contribute to the
development of the business.
Jhangiani: Must cover both ends of the spectrum fiduciary
(controls, financial operations) and strategic (meet long-term financial
objectives); must drive change throughout the business finance is in a unique
position to see everything across the company; must set appropriate KPIs to
monitor and drive performance.
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