Halden & Rowe · Finance · FX
Deferred the extension of Irish FX hedge cover pending the H2 buy finalise.
Correct call at the time; the drag has since begun to compound and the decision is being re-taken this week.
Context
What was in the room.
The source recommendation and the situation as it was understood at the moment of decision. Frozen — this is what the decision was actually made on.
Source · Prompt
Euro strength widening the unhedged margin gap in Ireland.
Finance · FX
Extend H2 cover from 40% to 70% on the Irish tranche at spot.
Rationale
Why it was decided.
The accountable owner's reasoning for the verdict. One paragraph; the record of judgement, not a defence of it.
David preferred to see the shape of the H2 buy book before locking hedge cover. Treasury policy allowed a two-week wait.
Evidence at time of decision
What Ana was reading.
The signals in play when the decision was taken. Preserved so the decision can be judged on the information it was made on, not on hindsight.
Plan rate
GBP/EUR 1.17
Six-week spot
1.13
Hedge cover
40% of H2
Policy trigger
not yet fired
H2 buy book
not finalised
Accountable owner
David Ashworth
Chief Financial Officer
Collaborators
- Iona MacLeod · Chief Executive
Outcome
Expected vs actual.
The number Ana modelled against the number that actually landed. Variance is shown honestly — ahead, in line, or behind expectation.
Expected
£22K
landed-cost drag while deferred · two-week wait
Methodology
Unhedged inbound × the rate gap for the deferral window, applied to the H2 open-to-buy at current mix.
Actual
Ahead of expectation by 41%
£31K
Rate held at 1.13 through the deferral and the buy book landed 6% larger than modelled — drag ran ahead of the wait.
Measured Wed 24 Jun
What Ana learned
The lesson, in one paragraph.
The pattern Ana takes from this decision into the rest of the organisation's memory.
The lesson
Deferral is a valid verdict when the buying book is still forming — the risk is that the drag compounds if the currency does not revert. In this case the rate held, so the wait cost 40% more than expected.
Applied from now on
FX prompts will now attach an explicit deferral cost curve so the trade-off between waiting for buy visibility and taking hedge cover is legible in the recommendation itself.