Wednesday 21 March 2018

Maeve Dineen: Limit number of firms publishing results on same day

Maeve Dineen

THERE is something wrong when half a dozen companies decide to publish their results on the same day; something that happened on the Dublin Stock Exchange last week.

Irish Life & Permanent, Kerry Group, IFG, Grafton, UTV and Icon all reported their half-year results on Tuesday, the same day that State-owned Anglo Irish Bank revealed the worst losses in Irish history.

Six publicly quoted companies on a single day. That's twice the number of companies due to report results in the whole of September. What's going on?

It's not even as if these companies were trying to bury bad news. In fact, each reported a reasonably good set of results. The shame for them is that this good news was drowned out by the news from other companies reporting on Tuesday and overshadowed by the stench coming from the fetid remains of Anglo.

Last week's stampede followed a busy week where Kingspan, CRH, Aer Lingus, FBD, Glanbia, Paddy Power, Tullow Oil, Vislink, Independent News & Media and Irish Continental also published interim results as they raced to meet the deadline imposed by the London-based Financial Reporting Council, which wants companies to get their numbers out within two months of the end of the first half of their financial years.

Over in London, an astonishing 70 companies chose to put out their interim results on a single day in the tail end of August to meet the same deadline.

While it makes sense to force companies to publish results quickly, it does not make much sense to publish so many on a single day -- especially a day in late August when trading volumes are low and many investment managers are on holiday.

August was a bad month for the stock markets with falling prices and low volumes. We've already seen a pick-up of kinds in the first week of September as experienced traders return from their holidays.

Would it not have been better to release those earnings figures when things are as normal as they ever will be in these difficult times?

Perhaps the stock exchange should consider assigning certain days to certain companies or allowing a maximum of three companies a day to report earnings?

It is no secret that Irish brokerages are small places these days and many analysts must cover several fields. We need to give the analysts and traders a little room to really drill into the results as they are announced.

Almost every statistic linked to the exchange at present is negative. Last month, the value of shares traded amounted to a shade less than €2.9bn for the entire month. It is difficult to see how the exchange can reflect real values with volumes like this.

During the first half of the year, the average daily value of shares traded was not much better but at least it was about €207m a day with around 9,100 transactions taking place.

These are difficult times for the exchange and the brokers who buy and sell Irish shares. Volumes are low, jobs are vulnerable and companies continue to leave the exchange, often involuntarily.

No broker is without problems at the moment.

The likely sale of Goodbody Stockbrokers later this week for the almost nominal sum of €25m shows just how bad things are in the country's second largest brokerage.

Davy continues to be haunted by the high price management paid to take the Dawson Street broker private while NCB ponders what Sean Quinn will do with his 25pc stake.

Against these sorts of problems, the publication of six sets of interim results on the same day may seem minor, but it is time for the stock exchange and the brokerages which own the exchange to up their game and start to manage the country's shrinking stock market. The alternative is further decay.

Irish Independent

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