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UK companies abandon quarterly reporting

Is the City curing itself of short-termism? Fund managers welcome a sudden decline in FTSE 100 companies reporting results every three months.

 
UK companies abandon quarterly reporting

The number of FTSE 100 companies which report on a quarterly basis has fallen by close to a fifth over the past 11 months, according to fund managers.

In total, close to 40% of FTSE 100 companies no longer issue quarterly reports to shareholders, the fund managers' trade body, the Investment Association, said, pointing to the changes in stock market listing rules in November 2014 for a decline it welcomed.

National Grid (NG), Schroders (SDR), Diageo (DGE) and Aviva (AV) feature amongst the UK’s largest companies which have chosen to abandon interim management statements each quarter, it said.

Over the past 11 months, the number of FTSE 250 companies which report on a quarterly basis declined by 25%, which equates to 167 companies. In total, close to 60% of FTSE 250 companies do not issue quarterly reports.

In theory, the changes to stock market listing rules that were introduced in November 2014 should allow businesses to avoid quarterly targets and short-term pressure. It was also hoped that this would also encourage investors to take more of a long-term approach – something economist John Kay called for in his review of equity markets for David Cameron's government in 2011.

The Investment Association has also called on companies to stop publishing interim management statements and earnings guidance in the hope of encouraging them to focus more on long-term strategies.

This formed part of the trade body's ‘Productivity Action Plan’, which was launched in March 2016. If focuses on boosting UK productivity through long-term investment and enhanced investor stewardship.

Chris Cummings, chief executive of the Investment Association, described the UK’s productivity puzzle as one of the ‘bigger challenges of our generation’.

‘Stronger, more productive businesses are more likely to deliver the long-term investment returns for the millions of people whose savings and investments are managed by our industry,’ he added.

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