A biotechnology business, heavily focused on R&D for years, was now experiencing rapid sales growth without a robust policy framework to protect itself against the rapidly growing risk profile.
Their main challenges were:
- Increasing cash flow forecasts of a publicly listed entity meant that the size of potential losses from otherwise typical market moves was rapidly increasing.
- The finance team and Board did not have direct experience developing an appropriate treasury policy.
Rochford advised and implemented the following strategies:
- Consulted with the CFO and presented a proposed hedging policy to the Board for approval.
- Collaborated with the finance team to execute an initial hedging strategy that ensured base compliance.
- Provided on-going advice and reporting on proactive hedging decisions, with an appropriate product mix to ensure compliance.
With our support:
- Heightened revenue certainty from a smoothed earnings profile has reduced the business’ cost of capital and risk premium applied by investors, generating increased gains to enterprise value.
- The Engineering, Sales and Finance team can focus on growing commercial opportunities with confidence their risk management program will scale alongside them.