British companies are rushing to delay the publication of their results following an unprecedented call from the financial regulator for results to be suspended due to the coronavirus crisis.
The Financial Conduct Authority (FCA) said late on Saturday that listed firms planning to report preliminary results in the next few days should mothball them for at least two weeks so they can better assess how the pandemic will affect their business.
Companies including B&Q owner Kingfisher, drinks producers AG Barr and Fevertree, and AA said this morning that they would delay the publication of their results.
At least 50 firms were expected to report results this week, according to financial data provider Refinitiv.
Kingfisher announced this morning that it would delay the publication of its full-year results by at least two weeks in response to the FCA’s request.
The company said it had received a letter from the watchdog yesterday asking it to delay the release of its results, which had been scheduled for tomorrow, and would provide further updates on timings “as soon as we are advised by the FCA”.
Announcing a delay to the publication of its results, which had been scheduled for tomorrow, Tonic-maker Fevertree said it would not be possible to provide guidance for the coming year.
“Given the current high level of uncertainty it is too early to quantify the impact the Covid-19 crisis will have on the outturn for the remainder of the 2020 financial year and therefore the board is not able to provide financial guidance at this stage,” Fevertree said.
The FCA’s call marks the first time British public companies have been asked to suspend results en masse, and comes in the wake of similar actions from regulators across the world.
Authorities in Spain, Hong Kong and China have moved to delay companies’ results as firms grapple with just how deep the expected global recession is likely to be.
In China, the epicentre of the coronavirus outbreak, companies listed on the mainland stock markets have delayed filing annual reports as auditors struggle to sign off accounts after the government effectively closed businesses to slow the coronavirus outbreak.
While the FCA’s desire to avoid panic is understandable, the regulator’s decision leaves firms in a difficult position, warned AJ Bell investment director Russ Mould.
“Companies are duty bound to update the market once it becomes clear that their results are likely to be notably ahead or behind forecasts.”
“In the current environment, no one expects firms to be able to give precise forecasts as to the potential downturn they are facing,” he continued.
“What shareholders and analysts are looking for is comment from management on what they are doing to preserve cash and give their company every chance of coming out the other side of the crisis and be ready for the eventual upturn.”
The Financial Reporting Council (FRC), the British audit regulator, said last week companies should delay filing financial statements rather than risking substandard audits and called on auditors to explicitly state the risks the pandemic poses for firms.
The FRC said this morning that it supports the FCA’s decision, and that auditors could broaden their approach to delays in company financial statements as the situation “rapidly” evolves.
“It is important that due consideration is given by companies to these events in preparing all reporting,” the regulator said.
“The FRC therefore encourages listed companies and their auditors to consider carefully whether they should delay other corporate reports for the next two weeks, such as interim financial statements and final audited financial statements, except where necessary to meet a legal or regulatory requirement,” the watchdog said in a statement.
The FCA said on Saturday that it was in talks with the FRC and the Bank of England’s Prudential Regulation Authority over a package of measures aimed at ensuring companies took the time to address the practical challenges presented by the coronavirus outbreak.
KPMG, one of the Big Four auditing firms, welcomed the delay.
“It is clear that given the pressures on people and the changes that we see day to day, it is in the public interest for reporting to be delayed to give companies the time to properly consider the impacts on their results,” said Jon Holt, head of audit at KPMG UK.
In full: the companies delaying results
|Company||Industry||What has been delayed?|
|AG Barr||Soft drinks||Results scheduled for 24 March|
|CPP Group||Products and services||Preliminary results|
|Gulf Keystone Petroleum||Oil and gas||Results scheduled for 26 March|
|Igas Energy||Oil and gas||Results|
|Integrated Diagnostics Holidings||Diagnostic services||Full-year results scheduled for 26 March|
|Kingfisher||Home improvement||Full-year results scheduled for 24 March|
|Mears Group||Outsourcing||Results scheduled for 24 March|
|N Brown||Fashion||Results expected on 29 April|
|STM Group||Financial services||Results scheduled for 24 March|
|S&U||Motor finance||Full-year results scheduled for 24 March|
|Zotefoams||Block foam making||Preliminary results scheduled for 24 March|