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Nov 21, 2022

Australian sell side complains last reporting season was ‘most bunched in memory’

Majority of fund managers and analysts would prefer results to be spread more evenly

When it comes to reporting dates, buy-side and sell-side analysts and fund managers at Australasian public listed companies share the same frustration: schedule clashes. 

A snap poll conducted by the Australasian Investor Relations Associations (AIRA) asked capital markets participants to share their views on current reporting practices at Australian listed entities. The survey collected 50 responses, the majority of which (59 percent) were from the sell side, with 37 percent from buy-side respondents. 

Responding to the poll, 89 percent of buy-side and 90 percent of sell-side participants lament clashes of company reporting dates in the latest reporting season. Both parties also address the lack of time they are currently given to analyze companies’ reports and focus on key details.

Sharing his views, one sell-side participant writes: ‘This reporting season was the most bunched in my memory. There is a clear need for a spread. If companies want to have due respect for their results, they need to ensure some clear air to consider the result.’ 

Ian Matheson
Ian Matheson, AIRA

AIRA CEO Ian Matheson has also called for better co-ordination and transparency among listed companies. ‘That co-ordination at a sector level is critical and, more broadly, among companies with a similar market capitalization,’ he says in an interview with IR Magazine.

‘Particularly among the top 200 companies in Australasia, there needs to be better transparency around board dates and financial results release dates.’

Sharing practical advice for companies, Matheson says AIRA is looking to address the issue of clashes by getting more of its members to use its online calendar, which was soft-launched a few years ago and has so far been adopted by around 100 companies.

The online calendar aims to offer IROs better visibility around the time their sector’s peers release their results. AIRA is now ‘redoubling’ its efforts and working to enhance the tool.

‘We are going to take it to the next level and approach companies on a sector-by-sector- basis and via an application programming interface,’ says Matheson. ‘[The idea is] to get all those sector dates back into the overall calendar and allow companies to get visibility of [them], but they will be able to see other companies’ only if they publish their own.’ 

AIRA’s poll also finds that 22 percent of the buy side attended 21-25 meetings during the most recent reporting period, with the same percentage also claiming attendance at more than 40 presentations. The average number of presentations attended by the sell side was 11-15, with 38 percent sitting in on between six and 10.

To avoid clashes, respondents called for results to be spread more evenly throughout the reporting season, with a number from both the buy side and sell side agreeing that Mondays and Fridays are currently well under-used by companies for reporting.

When it comes to post-results roadshows, the poll reveals that 45 percent of sell-side respondents prefer to engage with the company on the day of the results to address any immediate questions. Conversely, 61 percent of buy-side respondents say talks with the company can be held two to five days after the results, with 72 percent preferring to engage outside of the peak roadshow period.

More time for Q&A

Analysts and investors from both sides also criticize the structure of results calls, which do not allocate enough time for Q&A. 

One respondent from the buy side says it is ‘very frustrating’ to end calls after 60 minutes in the middle of a Q&A and states: ‘If time is an issue, reduce the formal presentation.’

Other sell-side respondents advise companies to highlight only key points from the results and then move onto the Q&A.

Asked whether companies in the Australasian capital markets are showing any intention of allocating more time for a two-way conversation, Matheson says a number of firms in the region have been trialing the release of pre-recorded presentations from the CEOs and CFOs ahead of meetings.  

‘But what a lot of companies that trial pre-recorded presentations found is that a lot of investors just don’t listen to the presentation before the call, so both the CEO and the CFO end up having to redo it,’ he explains.

It looks like getting the right balance between presentation time and Q&A time is still a ‘trial area’. Ultimately, avoiding clashes and ensuring questions get asked and answered is all about conciseness and flexibility. 

‘Companies should be able to just distil their key messages,’ says Matheson. ‘The reality is that the investment committee doesn’t have time on those busy – really busy – days to be able to read absolutely everything. So, it’s a reason to try to find quieter days. It doesn’t always work this way, either, because the board meeting dates have been set two years in advance and [can’t be changed] but companies need to be a bit more flexible about dates and times.’