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ERROR: type should be string, got "https://blogs.wsj.com/cfo/2017/04/28/brexit-presents-unforeseen-challenges-to-abf-finance-chief/\nCFO Journal.\nCFO Lessons\nBrexit Presents Unforeseen Challenges to ABF Finance Chief\nNina Trentmann\nBiographyNina Trentmann\n@Nina_Trentmann\nnina.trentmann\nnina.trentmann@wsj.com\nApr 28, 2017 6:49 am ET\nJohn Bason has served as ABF's finance director for 18 years. Photo: ABF\nJohn Bason keeps a firm hand on the purse strings as the finance chief of Associated British Foods PLC, but Britain’s exit from the European Union presents unforeseen challenges.\nThe maker of Twinings tea and Patak’s sauces operates five relatively independent business lines ranging from fast fashion to animal feed, each of which is facing different knock-on effects from Brexit.\n“The length of uncertainty caused by Brexit is something I haven’t seen,” Mr. Bason said.\nMr. Bason has served as company finance director for 18 years, helping revenue grow to £13.4 billion ($17.3 billion) in fiscal 2016, from £6.0 billion in fiscal 2006. Profit has increased to £821 million from £308 million over the same period.\nAnalysts say the fiscal discipline stems from Mr. Bason’s tight hold on the finance reins. He signs off on all capital spending over £100,000 and “forensically looks at each line” of the spending plan when budgeting, he said.\n“We have always been very good at looking at costs,” he said.\nPerformance is being tested every month, in every segment and all ABF merger and acquisition decisions are made centrally, Mr. Bason said.\n“We don’t let people do things on their own,” he said. Many targets these days appear overpriced, Mr. Bason said. This leads to ABF seldomly making big ticket acquisitions.\n“I would rather say to investors we avoided making a mistake than having to say I spent your money and I got it wrong,” Mr. Bason said.\nThat caution in part can be explained by ABF’s ownership structure. The conglomerate is 55% owned by Wittington Investments Ltd., a firm associated with Canada’s Weston family which founded the company. George G. Weston is chief executive officer.\n“If ABF buys, they buy at a reasonable price,” said Charlie Mills, an analyst at Credit Suisse AG in London.\nABF has taken a similarly cautious and centralized approach to navigating Brexit. A steering group consisting of around five people, plus members of each of the company’s divisions is currently looking at possible scenarios. So far, ABF has not quantified the potential impact on its balance sheet.\nThe company opposes new tariffs that could be introduced following Brexit as they threaten ABF’s food business, which sources many commodities from Europe.\n“Keeping supply as low-tariff as possible is very important for us,” Mr. Bason said.\nBut fast fashion retailer Primark, which generates around half of ABF’s earnings before interest and taxes, could benefit should the U.K. negotiate new trade deals with countries in Asia, Mr. Bason said.\nMost of the garments sold at Primark come from outside the EU. And Primark’s supply chains are already discreet, with shipments headed for Continental Europe avoiding the U.K. and those destined for the U.K. eschewing Continental European ports.\nThe drop in the value of the British pound has dented Primark’s profit margin. However, Mr. Bason said he resisted the temptation to swiftly raise prices.\n“That would have been the wrong thing to do,” he said. The company instead aims to negotiate lower prices with suppliers and there is room for small price increases with new fashion items, Mr. Bason said.\nSugar is another area where patience paid off. After years of decline, sugar prices are rising again, offsetting some of the currency-related losses at Primark. “Any fool could have sold the sugar business at a low price,” Mr. Bason said.\nNow, the abolition of the EU sugar quota -- coming into effect in the fall -- will create additional volatility for ABF’s sugar business. Half of that is in the EU, Mr. Bason said.\nThis however does not mean the company shies away from asset disposals. It recently sold its cane sugar business in China.\n“There are no favored businesses among the five,” Mr. Bason said. “We will hold on to them as long as our ownership for them is right.”\nABF’s portfolio approach is beneficial to overall performance, said Fintan Ryan, an analyst at Joh. Berenberg, Gossler & Co. in London. “With Primark suffering, sugar is now rebounding. This dynamic has helped them in the past.”\nASSOCIATED BRITISH FOODS\nPrevious CFO Moves: Bayer, Norfolk Southern, Highlands Bankshares, Teva Pharmaceutical Next The Morning Ledger: After 100 Days in Office, Many Trump Pledges Are Yet to Be Fulfilled"