Western Edge Pictures is a multi-award winning independent production company based in the UK.
Being in the film business, the projects the company typically undertake are shot on location overseas and financed across multiple countries – meaning payments have a habit of arriving at different times and in different currencies.
01 Identifying what matters
The first job for Godi was to understand Western Edge Pictures’ business model. As we did this, it became clear that the greatest support we could offer would be in introducing greater certainty in terms of the value of future payments.
02 Getting the strategy right
Our suggestion was to lock-in exchange rates upfront for planned payments to vendors through the use of ‘forward contracts’, and for Godi to execute these transactions on their behalf.
03 Delivering the promise
As a result, Western Edge Pictures is now able to budget for each new project in advance with no risk of exposure. Foreign exchange has become a fixed, manageable cost, making budget allocations more realistic, and cash flow management more dependable.
04 Enjoying the results
Forward contracts enable the company to hedge their exposure against different currencies, thereby enabling each new project to be properly budgeted for in advance, with no on-going exposure to the exchange rate. By using forward contracts and making FX a fixed cost, Western Edge Pictures can now forecast and budget with greater certainty – and enjoy the cash flow benefits of only having to pay a small deposit for each transaction.