Expansion back on CFOs’ agendas

The finance directors of some of the UK’s biggest companies are shifting towards expansionary strategies and are becoming more willing to take on risk, according to Deloitte’s latest CFO survey.

The research, which gauges the views of 135 CFOs – including 37 from the FTSE 100 and 45 from the FTSE 250 – shows that their expectations for recruitment, investment and discretionary spending have returned to levels previously seen in early 2011.

Forty-five per cent of respondents said that the time was right to take risk on to the balance sheet – the highest percentage in six years and double the number surveyed a year ago. CFOs are also placing more emphasis on expansion through acquisition and the introduction of new products or services.

They also seem to be softening their stance on cost reduction: only 34 per cent said that cutting costs was a priority for their business – down from 42 per cent in Q1 2013.

“Business optimism has been improving for some time, but our latest survey shows that CFOs are translating this confidence into action. A rising risk appetite and a shift towards expansion show that large corporations are increasingly planning for growth. The recession-era focus on cost-cutting and debt reduction is easing,” said Ian Stewart, chief economist at Deloitte.

“It’s particularly encouraging to see the move towards growth among UK-facing companies,” he added.

“These have been consistently more defensive than their international-facing peers in the past two years. Their shift towards more pro-growth strategies is a sign of an improving UK outlook.”

Photo: Getty Images

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