This creep towards a seemingly shorter results season appears to have begun in 2006 when the FSA decided that all companies needed to report their interim results as soon as possible, and within two months of their financial period end. Previously they had 90 days to do so.
As it happens, many companies are now reporting within 30 days or thereabouts. It is impressive that enormous multi-nationals can pull so much information together so quickly, suggesting a comforting robustness in their financial functions. But that’s as far as I’m prepared to go in my praise, because I’m not very convinced that this accelerated reporting system is much good for investors.
The thinking in 2006 was that the more quickly investors were able to get their hands on financial data, the better able they’d be to make investment decisions - and the less likely it would be that some investors would get better access to company disclosure than others, so-called information asymmetry.
There may be an element of truth to this, in as far as the efficient market hypothesis holds true and institutional investors enjoy advantages of access over the rest of us. But equally, another 30 - or even 60 - days should not make much difference to an investor of a long-term mindset. And that, after all, is what many in the industry and in Westminster claim they would like the investing public to be.
More worryingly, it means dozens of companies ending up reporting at once. I have read well over 100 results write-ups in a fortnight – suffice to say, it's hard to remember too much about any of them individually. It's true that most investors won't need to read them all - but even then, given this information-overload, it is easy to miss something.
The academic John Kay had much to say about how companies disseminate information in his eponymous 2012 review. “Useful information may itself be buried by the sheer volume of data” he argued – he was referring to the reams of regulatory mandated but often useless information companies report individually, but I’ll interpret it more generally. I’m sure many companies welcome the mad summer results rush as an opportunity, in the immortal words of one infamous political adviser, to try and bury bad news.
As for the deadlines that have contributed to this crush, it is arguable that they create a 'rote' approach to shareholder communication – what John Kay describes as “verbiage that is reproduced in almost identical form year after year and by company after company”. Cutting through this is no mean feat, and I think our companies team should be applauded for their efforts in doing so in the face of such an onslaught of information.
