March 27, 2019 — 5 min read
In 2001, JUCY Rentals was founded by two brothers, Tim and Dan Alpe, with just a fleet of 35 cars operating out of Auckland, New Zealand. Today, that fleet now numbers almost 4,000 and also includes campervans and motorhomes across New Zealand, Australia and the United States.
But JUCY hasn’t just confined itself to vehicle rentals. JUCY Snooze hotels operate in Auckland and Christchurch and soon to be open in Queenstown. JUCY Cruise offers tours of Milford Sound.
This rapid growth, however, comes with its obstacles, especially when operating across different countries and purchasing major assets, such as vehicles, from overseas markets. “We buy a lot of product overseas; we buy cars from Japan and the campervans and bigger motorhomes from Europe,” says JUCY CFO, Jonathan Duncan. “We’re exposed to a fair bit of currency – Euros, Yen, USD – so for us, it’s important to make sure we have a policy around how we manage that risk.” For companies which carry out international transactions, this issue is a common one – currency exchange rates changing after entering into deals and this fluctuation causing significant financial loss.
“It can be a bit of a complex area and you can get yourself into knots if you’re not careful. There are a lot of things happening in the market that can impact on your business.” JUCY’s typical approach to having cover for this risk was through their bank, but the bank’s sizable client base meant JUCY wasn’t able to discuss their foreign exchange exposure at the level they wanted. “A good policy for us is to have options and get different opinions and other people looking at your risk profile and helping you there.”
“Dealing in foreign exchange is not our specialty,” says Jonathan, so being able to lean on the expertise of those who live and breathe these markets day in and day out was a step that made sense for JUCY. They had worked with other international payment specialists before but these weren’t as hands-on in their approach, especially in an area of business where relationships and mutual understanding are paramount. XE’s Head of Service Delivery, Alex Hill, reached out to JUCY around the same time they were looking for a new payment specialist.
The initial meeting saw the XE team look to understand what JUCY’s operations entailed, where they could assist and then explaining how their services could be tailored to JUCY’s unique needs, which was a deciding factor for Jonathan.
“There’s no templated approach. They’re working with you so it doesn’t feel like you get a standard offer package.”
“The process of getting set up as a client was stress-free, given that there are things XE needs to tick off from a compliance side. They’re up front about what those are, and why they need to do it, so you don’t feel like there are any surprises.” XE then worked with JUCY to set up services and measures which could effectively protect them from the downsides of currency fluctuations.
*“If certain things happen in the market and currencies change to a degree that we wouldn’t be comfortable with, we’ve got future orders in place that get triggered and that’s worked really well for us. ****We’re protected from the downsides of big swings in the market but we still have the opportunity to maximise the benefits of buying foreign currencies if the markets go in our favour.”***
JUCY needs certainty when working with foreign currencies and the ability to reduce this risk is a major advantage in helping the company remain competitive globally and fueling its ongoing growth. “The main benefit is that we don’t have any unforeseen exposure that would make us uncomfortable.” “When it comes to the crunch of actually settling our bigger purchases, whether that’s out of Europe or out of Japan, we go into it knowing exactly what that endpoint looks like – it completely takes away the stress.”
“We’re a capital-intensive business so if we can keep the price down when we’re buying assets, ultimately, that works in our favour.” A major factor in this success has been the relationship fostered by the XE team, which centres on constant feedback and interaction to keep optimising how JUCY’s overseas transactions are executed.
“I’m talking to XE nearly every day just to make sure we know what’s sitting out there, what orders we’ve got there and what cover we’ve got in place. They just keep you up to speed on what’s happening in the market so you can be aware.”
“They’re looking ahead and saying ‘Hey we’ve got some big things happening out of Europe at the moment, how are you feeling about your European cover?’ Or ‘There’s big announcements coming out of the US.’ “They’re smart people who are happy to give their opinions which allow me to make informed decisions that improve how JUCY operates.”
Regardless of your business size, XE will work with you to tailor a FX solution to best suit your ever-changing business needs.