Group Finance Director, Ricardo
Bell, Paula, Financial Management (UK)
As an engineering business supplying the car industry, Ricardo must be having a hard time, surely?
At one time the impact of General Motors' insolvency would have been catastrophic for us, but in fact we have weathered the economic storm better than many companies in our industry because we started to diversify and tighten our cash management well before the crisis began. We have had orders cancelled, of course, but the recession has had far less impact on Ricardo than it might have had.
What prompted your timely precautions?
Five years ago we relied on a few key contracts in the automotive industry. When a couple of these were cancelled we realised that we didn't want to depend on so few clients. A new chief executive joined and he introduced a policy of not relying on any one sector, region or client for more than ten per cent of revenue. The change was partly about risk management, but it also made us realise the value of our engineering consulting skills to other markets.
Which new markets did you enter?
We've diversified into sectors including clean energy, marine, rail and the military. After all, if you strengthen a car it becomes a tank and if you take its wheels off it's more like a train. There's plenty of growth potential here.
We've focused a lot of our R&D investment on wind power because that's a huge market in Denmark, Germany and Spain. Clean energy is also important in the car industry. All European car makers must meet emissions targets and the US …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Group Finance Director, Ricardo. Contributors: Bell, Paula - Author. Magazine title: Financial Management (UK). Publication date: January-February 2010. Page number: 10+. © 2009 Chartered Institute of Management Accountants (CIMA). COPYRIGHT 2010 Gale Group.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.