A year ago around this time all the companies in the Continuous Market they had already published and recorded the results closed as of September 30, 2020. A year later, for the first time after the transposition of EU Directive 2017/828, Spanish listed companies have been able to decide whether or not to continue reporting the results for the first and third quarters of each financial year.
A decision that seen from the perspective of Investor Relations could be interpreted as an “involuntary” communication considering this corporate function as an investment or cost depending on the company we are talking about.
The good news is that almost 80% of the total number of listed companies still think that it is positive that investors and analysts learn every three months how business management and corporate and consolidated finance are evolving to facilitate the adjustment of expectations and, therefore, as Mr. Buffett says, “invest in what you know”. The bad news is that, according to our calculations, 26 companies stopped reporting results as of September 2021, just over 20% of the market, which is double the percentage registered in the United Kingdom since the same regulations were applied in 2014. This is certainly not good news for its shareholders, potential investors and analysts interested in following the evolution of these values.
Is it true that some company has replaced this Reporting quarterly results by one of an operational nature on business trends, although, in our opinion, this type of information constitutes more good complement, and not a good one surrogate to economic-financial information. At the same time, it should be noted that some other listed companies have taken advantage of the new legal framework to relax publication schedules, going beyond November 15, which was previously the deadline for publication, and are now announcing results for the last week of November or the first half of December. Be careful because later it may be too late.
Reporting is always a good first step, but the definitive one must be the quality of the information, and still a significant number of quarterly communications are dispatched with four descriptive paragraphs and three tables of data, falling short of what we could consider a quarterly report based on management evolution. It does not seem that we are living in a time to be less transparent and constant in our efforts to transmit the investment proposal in the midst of increasing competition from capital. It is striking that in a market like BME Growth, which since its inception only requires the publication of biannual financial information, there are more and more companies that voluntarily report the results of the different quarters, demonstrating that success in Investor Relations is not a matter of company size but of vision.
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Francisco Blanco Bermúdez
Founding partner of Sigma Rocket
