UK: Down The wiRe: Surveying Preliminary Announcements - Part 1


What is going down the wire? To put that question more formally, how are listed companies responding to the 2007 rule changes making preliminary announcements voluntary and allowing companies to announce directly their audited annual results?

This survey examines how 130 UK listed entities, including 30 investment trusts, chosen at random from across the entire population, have responded. It was carried out now because:

  • companies' first announcements of the annual results are seen as the ones which move the share price;
  • the new rules came into force for accounting periods beginning on or after 20 January 2007 and 2008/9 was the first reporting season that the rules were in force for all companies;
  • it is ten years since a similar exercise was carried out and again that was at a time of regime change; and
  • it completes Deloitte's 2008/9 analysis of major corporate reports, having reviewed interim management statements, half-yearly financial reports and annual reports.
  • So, what is going down the wire? In summary:
  • preliminary announcements are as popular as ever. 98 of the 100 companies surveyed, and 24 of the 30 investment trusts, continue to issue these;
  • companies take an average 69 days, and trusts 67 days, to issue their first announcement;
  • the first announcement by companies is an average 21 pages, made up of 11 pages of narrative, three pages of primary financial statements and seven pages of accompanying notes;
  • the notes which are most commonly included are on:
    • earnings per share;
    • additional cash flow information;
    • segmental information;
    • dividends;
    • taxation;
    • exceptional items; and
    • major acquisitions;
  • commentary in the narrative section changed over 2008/9. Only 2% of companies reporting prior to the FRC's November 2008 announcement on going concern referred explicitly to that topic. That figure increased to 28% using those words in the more recent months;
  • companies have struggled, not unsurprisingly, to understand the rules on subsequent dissemination announcements, with a wide variety of practices being adopted. The Financial Services Authority has issued more guidance on this subject in March 2009; and
  • subsequent announcements which indicate the companies' full annual reports are now available, issued on average 32 days after the first announcement.

Two lessons come to mind from this exercise. First, any significant deregulatory benefit from the 2007 rules changes has not been achieved. Market practice and the need to announce price sensitive information have meant that preliminary announcements have continued. Second, what is considered important to put in that first announcement may give some clues to those interested in reducing the length and complexity of preparing annual reports.


The requirements governing the announcement of annual financial results have become more complicated following the implementation of the Disclosure and Transparency Rules (DTR) for periods beginning on or after 20 January 2007. Listed companies must now comply with various parts of the DTR and other requirements in Listing Rules and company law.

In short, preliminary announcements are now voluntary. Companies may either:

  • issue a preliminary announcement followed by a dissemination announcement regarding the full annual report; or
  • issue directly a single announcement containing some parts of or all of their annual report.

Annual Results Announcement Methods

The following overview deals with the common issues requiring consideration by companies and includes references to relevant regulations and explanatory guidance from the FSA.

Preliminary Announcements

Preliminary announcements are now optional, but companies choosing to produce one must comply with the requirements of Listing Rule 9.7A as explained below.

Listing Rule 9.7A

If a listed company prepares a preliminary statement of annual results:

  1. the statement must be published as soon as possible after it has been approved by the board;
  2. the statement must be agreed with the company's auditors prior to publication;
  3. the statement must show the figures in the form of a table, including the items required for a half-yearly report, consistent with the presentation to be adopted in the annual accounts for that financial year;
  4. the statement must give details of the nature of any likely modification that may be contained in the auditors report required to be included with the annual financial report; and
  5. the statement must include any significant additional information necessary for the purpose of assessing the results being announced.

The FSA has clarified1 that the requirement for the preliminary announcement to include "the figures in the form of a table, including the items required for a half-yearly report" does not mean that the preliminary announcement should be prepared in accordance with IAS 34. The preliminary announcement should contain appropriate commentary "necessary for the purpose of assessing the results being announced", but not necessarily the full report.

Basic Dissemination Requirements

DTR 4.1.3 requires a company's annual report to be made public within four months of the year-end. In its updates to List! subscribers in June 2008 and March 2009, the FSA clarified that:

  • issuing a preliminary announcement within four months of the year-end is not sufficient. The full annual report must be available on the company's website within that timescale; and
  • annual report information (and, indeed, any other regulated information) required to be issued in plain text cannot be issued in pdf format or via a website link.

Information To Be Disseminated

DTR 4.1.5 requires that an annual report includes audited financial statements, a management report and responsibility statements. However, other laws and regulations require other items (for example, the corporate governance statement, directors' remuneration report and statutory directors' report information) to be included in annual reports. The 2008 Deloitte survey "Write from the start" noted that the average length of an annual report for a listed company was 96 pages.

The DTR require other periodic financial reports (half-yearly financial reports and interim management statements) to be communicated in unedited full text. But, presumably because of the length of many annual reports, DTR 6.3.5 below allows that only the information which is contained in the annual report and is "of a type that would be required to be disseminated in a half-yearly financial report" may be communicated in unedited full text, with the remaining parts of the annual report being published via hyperlink. This is referred to as a "components only" dissemination announcement in this section. Publishing the entire annual report in unedited full text is permitted by the DTR as an alternative to this "components only" approach.

DTR 6.3.5

1. Regulated information, other than regulated information described in paragraph (2), must be communicated to the media in unedited full text.

2. (a) An annual financial report that is required by DTR 4.1 to be made public is not required to be communicated to the media in unedited full text except for the information described in paragraph (b).

     (b)If information is of a type that would be required to be disseminated in a half-yearly financial report then information of such a type that is contained in an annual financial report must be communicated to the media in unedited full text.

3. The announcement relating to the publication of the following regulated nformation must include an indication of which website the relevant documents are available:

  1. an annual financial report that is required by DTR 4.1 to be made public;
  2. a half-yearly financial report that is required by DTR 4.2 to be made public; and
  3. an interim management statement that is required by DTR 4.3 to be made public or an equivalent quarterly financial report.

A "components only" dissemination announcement should include at a minimum the following.

Required Content Of A "Components Only" Dissemination Announcement


Source regulation


Condensed set of financial statements, including primary statements and selected notes

DTR 4.2.3 (by reference from DTR 6.3.5)

The FSA has stated2 that compliance with IAS 34 on interim reports is not required in preliminary announcements and there is nothing to suggest that compliance with this standard would be required for an annual dissemination announcement.

Management report

DTR 4.2.3 (by reference from DTR 6.3.5)

Including information on important events and their impact on the financial statements.

Information on principal risks and Uncertainties

DTR 4.2.3 (by reference from DTR 6.3.5)

The FSA confirmed that for half-yearly financial reports a summary of risks and cross-reference to the last annual report may, in some cases, suffice.2 This guidance does not extend to annual report announcements, for which the full description as per the annual report is required.

Information on related party Transactions

DTR 4.2.3 (by reference from DTR 6.3.5)

Information on related party transactions is required to be included in an interim management report of a half-yearly financial report under DTR 4.2 but not in an annual management report under DTR 4.1. However, information on related party transactions will be included in an annual report due to the requirements of IAS 24. On this basis, and in the absence of any additional guidance, it may be that in certain circumstances companies will wish to include material related party information in a dissemination announcement.

Going concern


Following the guidance issued by the Financial Reporting Council ("FRC") in November 20083 on going concern and liquidity risk, which included recommendations that annual reports should include clear discussion on the company's going concern position, the FSA issued guidance4 indicating that disclosures in this area should also be considered in preparing preliminary announcements.

Responsibility statements

DTR 4.2.3 (by reference from DTR 6.3.5)

See opposite under "Responsibility statements in "components only" dissemination announcements."

Statement on audited information in non-statutory accounts

Section 435, Companies Act 2006
Section 240, Companies Act 1985

See under "Auditor involvement and references to audited information."

Website upon which the annual report is available

DTR 6.3.5,
DTR 4.1.4

Must remain available for at least five years.


Responsibility Statements In "Components Only" Dissemination Announcements

The annual report responsibility statement, required to be reproduced in the dissemination announcement, refers to the annual report as a whole and includes a statement that the financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and group. The "components only" dissemination announcement would not typically include a full set of notes and is likely to contain little or no company only information. It is therefore advisable to include introductory words in the dissemination announcement, which explain that the responsibility statement has been prepared in connection with the full annual accounts and directors' report and that certain notes and parts of the directors' report are not included within the dissemination announcement.

An example follows:

Responsibility Statement Of The Directors On The Annual Report

The responsibility statement below has been prepared in connection with the company's full annual report for the year ending 31 December 2009. Certain parts thereof are not included within this announcement.

We confirm to the best of our knowledge:

  • the financial statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and
  • the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

This responsibility statement was approved by the board of directors on [date] and is signed on its behalf by:

[name]                                  [name]
Chief Executive Officer     Chief Financial Officer

Auditor Involvement And References To Audited Information

As was the case under the old Listing Rules, the auditor's consent continues to be required prior to publication of a preliminary announcement (whether described as audited or unaudited).

In contrast, no such consent is required for the publication of a dissemination announcement, whether it be the full annual report in plain text or a "components only" announcement. This apparent discrepancy is logical as the auditor will have signed their report by then.

Neither a preliminary announcement nor a "components only" dissemination announcement constitute a company's statutory accounts, as they do not include all of the information required by company law in a full set of accounts. Section 240 of Companies Act 1985 and section 435 of Companies Act 20065 make clear that an auditor's report should not be published with non-statutory accounts and that a statement should be included confirming:

  • that they are not the company's statutory accounts;
  • whether statutory accounts dealing with any financial year with which the non-statutory accounts purport to deal have been delivered to the registrar; and
  • whether an auditor's report has been made on the company's statutory accounts for any such financial year, and if so whether the report:
    • was qualified or unqualified, or included a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report; or
    • contained a statement under section 498(2) (accounting records or returns inadequate or accounts or directors' remuneration report not agreeing with records and returns), or section 498(3) (failure to obtain necessary information and explanations).

A dissemination announcement that includes the entire annual report, including the auditor's report, in full unedited text represents the company's statutory accounts and therefore a section 240/section 435 statement is not required.

References To Companies Act 2006 And Companies Act 1985

A preliminary announcement or "components only" dissemination announcement for a company's first financial year under the Companies Act 2006 (for example, a year ending 31 December 2009) will include current year information from accounts prepared under that Act and comparative information from accounts prepared under the Companies Act 1985.

The requirements of the two Acts are similar, but each requires reference to the terms of the appropriate Act. The current understanding of these requirements is that the references to company law should be to the Act under which each annual report was prepared, not to the currently effective Act. An example statement for an audited preliminary announcement or dissemination announcement follows:

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2009 or 2008. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the company's annual general meeting. The auditor's reports on both the 2008 and 2009 accounts were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of Companies Act 2006 or equivalent preceding legislation.

A statement for an unaudited preliminary announcement for year ending 31 December 2009 reporting in 2010 may read as follows:

The results shown for 2009 are unaudited. Statutory accounts for the year ended 31 December 2008 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s237(2) or (3) of Companies Act 1985.

Practical Issues And Sequencing Of Announcements

In promulgating the new DTR, it may have been considered that a preliminary announcement would rarely be necessary and that companies would simply release a dissemination announcement (being the full annual report or a "components only" announcement). However, in practice delays arise. In considering how to address any such issues, companies are mindful of their obligations under DTR 2.2 (disclosure of price sensitive information) and Listing Rule 9.7A.2 (announcement of dividend and distribution decisions). Both rules require announcements to be made as soon as possible and compel announcement of approved results or dividends before the full annual report can practically be made available.

Publishing both a preliminary announcement and then a dissemination announcement could mean repetition of a large volume of information. The FSA issued6 in March 2009 some explanatory guidance in this area, stating that if the minimum information required by DTR 6.3.5 is included in unedited full text in a preliminary announcement, it need not be repeated when the company later announces the release of its annual report.

The FSA suggests that it may be useful to refer to the preliminary announcement when making the later announcement to make clear how the DTR dissemination requirements have been met.

The FSA guidance does not refer to the practice of issuing a preliminary announcement including only the information required by LR 9.7A (so not including, for example, information on principal risks and uncertainties) and then "topping up" the information with a later announcement including the website link and the additional items required under DTR 6.3 but not previously included in the preliminary announcement. This approach means that no single announcement contains all the information required by the DTR and hence companies may wish to consult their advisors before adopting such a practice.

Application To Different Types Of Company

A summary of the application of DTR 4.1 on annual financial reports and DTR 6.3.5 on dissemination of those reports is provided in the table below.

Application Of DTR 4.1 'Annual Financial Reports' And Related Dissemination Requirements Of DTR 6.3.5

Type of company

Do DTR 4.1 and DTR 6.3.5 apply?


Ordinary shares listed on main Market

Required for companies with either a primary or a secondary listing.

Preference shares listed on main Market


Shares admitted to trading on Alternative Investment Market (AIM)


AIM rules require an annual report to be published and sent to shareholders within six months. The annual report must be made available on the company's website but there is no requirement for a preliminary or dissemination announcement.

Retail debt7 listed on main market

In certain circumstances, companies with retail debt listed in both the UK and another EEA state may apply the rules of the other state.

Wholesale debt8 listed on main Market

Exempt per DTR 4.4.2


Retail or wholesale debt listed on Professional Securities Market (PSM)9


LR 17.3.4-6 require an annual report and audited accounts to be published within six months, with two copies to be sent to the FSA. An announcement should be made confirming that copies have been sent to the FSA and where they are available. No preliminary or dissemination announcements are required.

Listed convertible securities


Depository receipts listed on main market



The objectives of this survey were to consider how practices in announcing full year results have developed following the implementation of the DTR and in particular:

  • how promptly companies are announcing their full year results;
  • what form the initial announcement of full year results takes;
  • what information companies provide in their full year results announcements;
  • what subsequent announcements are made in respect of the annual report; and
  • how companies are applying the dissemination rules of the DTR.

The survey was conducted by reviewing the announcements of the first full year results under the DTR of 130 fully listed companies. The effective date of the DTR (for periods beginning on or after 20 January 2007) meant that the earliest period ends sampled were 52 week periods to 26 January 2008 and the latest were 31 December 2008 year-ends.

For clarity, in this report, the first announcement of full year results issued by a company to the Stock Exchange, means a Listing Rules 'preliminary announcement' or an 'annual results announcement' under the DTR or any other format of reporting, whichever appears first. Any later announcements concerning the full year results have been termed 'subsequent announcements'.

The sample comprised 30 investment trusts (companies classified by the London Stock Exchange as being in the industries of equity or non-equity investment instruments) and 100 other companies, split equally across the top 350 companies by market capitalisation at 28 February 2009, those in the smallest 350 by market capitalisation and those that fall between those categories (the 'middle' group).

Twenty of the investment trusts producing nonconsolidated financial statements chose to continue to report under UK GAAP. The other ten trusts and all the other companies reported under IFRS.

The sample is, as far as possible, consistent with that used in the recent Deloitte survey of half-yearly financial reports, "Our better halves". As a result of takeovers, delistings, movements between the market capitalisation strata over the recent months and reporting timetables meaning some December year-end companies had not reported by the survey's cut off date, the sample could not be identical. Five replacement investment trusts and 12 replacement other companies were selected at random from the appropriate populations.

As in other recent Deloitte surveys, information for investment trusts is presented separately in section 6.

To provide meaningful comparisons over time, where comparative information is given, it is for the 2007/8 full year announcements of the same companies in this sample.


This section looks at the practices adopted by the 100 companies surveyed in making the first announcements of their full year results, including the mechanics of their reporting, the narrative they contained and the financial information provided.

Mechanics Of Reporting

Form of first announcement 98% of companies opted to issue the now voluntary preliminary results announcements. As shown by figure 1 below, 74% of first announcements were preliminary announcements that were described as audited and correctly excluded the auditor's report. One company issued a preliminary announcement which was lengthy, did not include all sections of the annual report but did include the auditor's report within that announcement. 23% of companies issued preliminary announcements which either stated that the company's results were unaudited or included no comment as to whether they were audited or not. Of the remaining two companies, one submitted the full annual report in unedited full text and another company submitted an announcement consisting of a link to a pdf of the annual report together with only minimal financial highlights.

Figure 1. What Was The Form Of The First Announcement

Of the 74 companies whose first announcements were clearly based on audited results but did not include the auditor's report, 65 stated that they had unmodified audit opinions, three confirmed that they had emphases of matter (two in connection with their ability to continue as a going concern and one relating to a significant legal claim) and one stated that it had a qualified opinion. The remaining five companies made no statement on whether the audit opinion was modified in any way. The auditor's report of the company which gave only a link to a pdf also contained an emphasis of matter on going concern.

One of the companies stating in their preliminary announcement that the auditor's report contained an emphasis of matter in relation to going concern did not give this information in the section 240 statement, which stated only that the auditor's report was unqualified and did not contain statements under s237(2) or s237(3) of Companies Act 1985. The emphasis of matter was referred to later in the announcement.

The qualified auditor's report referred to above was as a result of a limitation of scope in respect of the realisable value of inventory. The nature of this qualification was referred to in the preliminary announcement but this did not include all of the information in the full auditor's report. The auditor's report in this company's annual report also included an emphasis of matter in respect of going concern, but this was not referred to at all in the preliminary announcement.

Of the 23 unaudited preliminary announcements in the sample, 12 clearly stated that their audit had not yet been completed, but gave no indication as to whether an audit qualification was expected, three stated that they expected their reports to be unqualified and eight did not comment on the audit at all.

Titles Of First Announcements

49% of companies titled their first announcements 'Preliminary results' in the text of the announcement itself. This was the most common heading, although a number of slight variations on the title, for example references to "audited" or "unaudited", were noted. Nine companies chose not to provide any formal heading, using a comment on their performance as a headline instead.

Figure 2. How Quickly Was The First Announcement Issued?

Figure 3. How Many Pages Does An Average First Announcement Contain And What Is The Range?

The name given to the Regulatory Information Service (RIS) feed showed considerably less variation. 69% of the RIS feeds were called "Final results", although only 4% of companies used this heading in the announcement itself.

Time To Report

All companies surveyed released their first announcement within the DTR's four month deadline for publishing annual reports. The longest time taken was by two companies in the smallest 350 group which took exactly four months.

However, one of these companies and several others did not announce their full annual report via a RIS within four months as required by DTR 4.1. This is discussed further in section 5 of this publication.

The average time taken by companies to make their first announcement was unchanged from the previous year at 69 days. As shown by figure 2 left, companies in the top 350 group were the quickest to announce, with an average time of 57 days. The middle group took 69 days and companies in the smallest 350 category 81 days. The shortest time to release a first announcement was 33 days, by a company in the middle group.

Length Of First Announcements

The average length of the first announcements was 21 pages, compared to 20 pages for the last preliminary announcement issued before the implementation of the DTR. As shown in figure 3 left, there was a correlation between the size of companies and the length of their reports.

Figure 4 below shows that, in their first announcements, companies gave on average 11 pages of narrative, three pages of primary financial statements and seven pages of accompanying notes. The first announcements of the top 350 companies included 54% narrative content, compared to 50% in the middle group and 45% in the smallest 350 companies.

Figure 4. What Is The Average Number Of Pages Of Each Section Of A First Announcement

Narrative Content

The volume of narrative reporting in first announcements varied significantly, from a short statement of financial highlights to 50 or more pages of detailed analysis. Inclusion of information on principal risks and uncertainties in first or subsequent announcements is covered in section 5 of this publication.

Key Performance Indicators (KPIs)

There is no requirement for a first announcement to include information on a company's KPIs. However, these might often be considered useful in enabling investors to assess the success of a business against its most important metrics.

33% of companies surveyed referred explicitly to KPIs (or a similar term such as "key performance measures") in their first announcement. Figure 5 below shows the split of practice in this area.

Figure 5. What KPIs Are Included In The First Announcement?

65 of the 67 companies not referring explicitly to KPIs did begin their first announcement with a highlights section.

The number of KPIs identified varied significantly:

  • where financial KPIs were identified, their number varied from one to ten with an average of five; and
  • where companies also identified non-financial KPIs, their number varied from one to seven with an average of two.

The value of a KPI figure may be enhanced by either a comparison to a prior period value or to the company's target value. 91% of companies including KPIs in their first announcement gave comparative values and 18% included comment on performance against the company's targets.

Going Concern And Liquidity Risk

Despite the current economic environment, 45% of companies did not comment on their going concern status or provide any information on liquidity risk (e.g. levels of available borrowing facilities or status of ongoing negotiations with providers of finance) in their first announcement. This figure was highest amongst the companies in the top 350 category, with 62% failing to provide any information in this area.

It was, however, promising to see an improving trend over time in this area. As shown by figure 6 below, the number of disclosures either explicitly addressing going concern or discussing the company's liquidity position increased sharply for companies with a year-end in the final quarter of 2008 (primarily December 2008 yearends).

Figure 6. How Has The Discussion Of Going Concern And Liquidity In First Announcements Developed Over Time?

Deteriorating economic conditions and the publication of guidance on going concern by the FRC in November 2008 will have driven this change. In particular, it was noted that 28% of first announcements made after the FRC guidance was issued included some discussion specifically relating to going concern compared to only 2% of announcements made before that date. This suggests that the directors of many companies took note of and acted on this guidance.

An example of disclosure covering both going concern and liquidity risk follows.

Risk/Going Concern

The risk profile of the Group has increased significantly in the past year due to the effects of the current recession. Together with the marked reduction in our sales we have experienced a far more significant volatility in our sales cycle. This has made optimisation of inventory levels far more challenging and has resulted in higher levels of inventory than would be ideal. This puts pressure on the use of financing facilities at a time when additional banking facilities are challenging to obtain. We have provided security to HSBC over the Group's assets by way of debenture. Our relationships with our bankers HSBC and Lloyds remain good.

Another negative consequence of the current economic climate has seen a significant increase in the risk of loss of key suppliers. LTI, like most small automotive companies, is single source for almost every component used to manufacture the vehicle. Any loss of a key supplier can have major funding consequences if production is suspended even for a short time period. We do have contingency plans in place, including procurement from China, but some components are of greater impact than others.

The restriction of credit from suppliers could have a marked effect on our working capital. This could arise both from credit suppliers restricting insurance to the automotive industry as well as suppliers who do not utilise credit insurance seeking to better manage their own funding position. The availability of finance to fund our vehicle sales has not been a major risk for us as it has been for the automotive industry as a whole.

We are compliant with all terms of finance facilities and these facilities have been renewed. We have management plans in place to seek to mitigate financial risks and these have been stress tested. The directors will seek to investigate opportunities to strengthen the capital base of the Group in the event of a further downturn in the economic environment.

We do not provide significant guarantees and do not enter into long term arrangements. Liabilities are known and fully managed within contractual terms. We have demonstrated financial adaptability through previous periods of low sales. As noted our customers are not struggling to access credit to purchase new TX4's. Our most significant risk is therefore dependence on counterparties, particularly our suppliers and in most instances we have contingency plans in place to manage this risk. The significant risks to the business are detailed below.

However, current economic conditions create uncertainty particularly over the level of demand for the Group's products. For these reasons, a sensitivity analysis has been performed on the Group's forecasts and projections, to take account of reasonably possible changes in trading performance. This analysis shows that the Group will be able to operate within the level of its borrowing facilities. As a consequence, and after making relevant other enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Board has continued to adopt the going concern basis in preparing the Group's Annual Report & Accounts 2008.

Manganese Bronze Holdings PLC – Annual Results Announcement

Financial Content

Primary Statements And Dividend Information

Only two companies did not include all of the primary statements in their first announcements. One of these was the company in the middle group referred to above which released an announcement only with brief financial highlights and a link to a pdf of the annual report. The other company, in the smallest 350 category, failed to include the Statement of Recognised Income and Expense (SORIE) that was in their annual report. One further company did not give a SORIE or a Statement of Changes in Equity (SOCIE), but this omission was consistent with its annual report.

All companies included comparative information for each primary statement in their first announcement, apart from one company in the smallest 350 category which omitted comparative information from its SOCIE.

The Listing Rules require that preliminary announcements disclose any final dividend per share, its payment date and the record date. 70% of companies clearly disclosed this information and a further 23% explicitly stated that no final dividend had been proposed. 4% of companies failed to give either the payment date or the record date and the remaining 3% failed to give any information about any final dividend in their first announcement.

References to statutory financial information 93% of companies sought to provide a statement in accordance with section 240 of Companies Act 1985, indicating that their first announcement did not constitute statutory accounts.

Figure 7 below shows that only 26% of companies gave a technically correct s240 statement. 46% of companies, whilst stating that their announcements were not statutory accounts and that their auditor's reports were unqualified, did not state whether their auditor had drawn attention to any matters by way of emphasis. 21% of companies made other omissions in their statements, such as failing to state whether their auditor's reports contained statements under s237(2) or s237(3). These statements address whether proper accounting records have been kept and whether the auditor obtained all the information and explanations necessary for their audit. Five companies erred by referring to only the current year's accounts and associated auditor's report, instead of both the current year accounts and report and the comparative period.

Figure 7. Did Companies Provide Accurate s240 Statements?

An example of a correctly worded s240 statement is included below.

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2008 or 2007, but is derived from those accounts. Statutory accounts for 2007 have been delivered to the Registrar of Companies and those for 2008 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s237 (2) or (3) Companies Act 1985.

MITIE Group PLC – Preliminary announcement of results for the year ended 31 March 2008

Accounting Policies

The approaches adopted by companies in their first announcements in disclosing their accounting policies were very varied:

  • 23% of companies explained changes in accounting policies and stated that they were otherwise consistent with the previous year;
  • 18% stated that the accounting policies were consistent with those in the previous year;
  • 3% provided full details of their policies;
  • 38% stated that the accounts were prepared in accordance with IFRS but gave no specific information on the company's policies;
  • 11% failed to comment on accounting policies at all; and
  • the remaining 7% of companies adopted a variety of other approaches.

The other approaches adopted by 7% of companies included three companies cross-referring to their annual reports, two companies just listing their "main" policies, one company stating compliance with IAS 34, the interim reporting standard, and another company giving some information on changes since the previous year but without any statement on the consistency of other policies

Notes To The Financial Statements

Figure 8 shows the average number of notes included in the first announcements and the range. Overall, companies gave on average 11 notes, with a range from zero to 38.

Figure 8. How Many Notes Does An Average First Announcement Contain And What Is The Range?

As shown by figure 9, the most common notes in the first announcements were earnings per share, additional cash flow information and segmental reporting, which were included by 91%, 91% and 87% of companies respectively.

Figure 9. What Notes To The Financial Statements Were Included In The First Announcement?

Of those companies with business combinations during the year, 67% included a note to their financial statements on the acquisition. Where a defined benefit pension scheme evidently existed, only 30% of companies provided a note with further information on their pension surplus or deficit. The level of detail disclosed in both of these areas varied.

Seven companies detailed their key sources of estimation uncertainty (required in an annual report by IAS 1) in their first announcement, with another company stating that these were unchanged from the previous year and providing a cross-reference to the previous annual report.

77 companies appeared to have had equity transactions in the year, although the level of detail given about them varied. 37 of these companies disclosed movements in share capital and share premium in the notes by giving the gross monetary values by transaction type, typically in a SOCIE. 18 companies went further in their notes and provided information such as the number of shares per transaction and their price. 11 companies provided information similar in nature in the narrative part of their announcement. The remaining 11 companies appeared to have had equity transactions, given that their equity reserves balances changed during the year, but gave no information about these movements in either a primary statement or elsewhere in the announcement.

Overall, notes disclosing information on the income statement seemed the most popular, presumably because these are considered to be of the most interest to readers of first announcements.


This section looks at the practices, adopted by the 100 companies surveyed, in making any subsequent announcements to inform the market that their annual reports had been published, including whether all the information required to be included in such a dissemination announcement under DTR 6.3 was provided.

Form Of Subsequent Announcements

As shown by figure 10 right, there was a wide variety of subsequent dissemination announcements. Observations in this respect included:

  • 48 companies made an announcement including only a link to the website where the full annual report was available;
  • 17 companies had their annual reports available on their websites as at the cut off date for this survey, but this had not been announced to the market; and
  • only seven companies made a subsequent announcement giving additional information to investors (one company making the full annual report available in plain text and six giving some or all of the information required by the DTR but not included in the preliminary announcement).

Figure 10. What Subsequent Announcements Are Made?

Section 2 of this publication gives additional guidance on how companies might meet the requirements of the DTR in this respect.

Timing Of Subsequent Announcements

Subsequent announcements were made on average 32 days after the first announcement. Figure 11 shows the average delay between announcements and the range.

Figure 11. What Was The Delay Between The First And Subsequent Announcements?

As noted in section 4, all companies within the survey made a first announcement within four months of the year-end. However, for companies that had not made a subsequent announcement, or had made one only some time after publishing their annual report (for example, by including the annual report in an annual information update), it was difficult to assess whether the requirement for dissemination of the annual report within four months of the year-end had been met.

Of the 100 companies surveyed:

  • 72 companies made an announcement within four months of the year-end that their annual report was available;
  • seven companies made such an announcement more than four months after the year-end (although five of these included a statement in that announcement that the annual report had been sent to shareholders or submitted to the UKLA within four months);
  • 19 companies had annual reports available on the company's website but had made no announcement to that effect within the four month period subsequent to year-end; and
  • two companies had not yet published their annual reports after the four month deadline.

Announcement Of DTR Required Information

Figure 12 shows to what extent each type of information required by the DTR to be made available in plain text was included in RIS announcements.

Figure 12. In Which Announcement Was Information Required By The DTR Included?

Financial Statements And Narrative Reporting

The only company not to include financial statements and a narrative report in plain text was the company whose only announcement consisted of a link to the annual report in pdf, with only minimal financial highlights provided in plain text.

Principal Risks And Uncertainties

Of the 30 companies giving information on principal risks and uncertainties, 25 provided the full detail from the annual report. Two companies gave a summary and a cross-reference to the annual report, two others included a cross-reference only and the remaining one company provided some detail on its operating risks and uncertainties within the discussion on going concern.

Responsibility Statements

The 13 companies that included a responsibility statement in their announcements dealt in different ways with the issue noted in section 2 of this publication on inclusion of a responsibility statement referring to a full annual report in an abridged announcement containing only parts of that report. The findings are summarised below:

  • two companies disseminated a full annual report in plain text and as such no explanatory words were necessary;
  • seven companies reproduced the responsibility statement from the annual report without amendment or clarification; and
  • four companies reproduced the statement from the annual report with a note to clarify that it referred to items not included in the announcement.

An example of this approach follows.

The Directors' Responsibility Statement has been prepared in connection with the full Financial Statements, Operating and Financial Review and Directors' Report as included in the Annual Report & Accounts 2008. Therefore, certain Notes and parts of the Directors' Report reported on are not included within this Release.

Directors' Responsibility Statements

We confirm to the best of our knowledge:

  1. the Financial Statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
  2. the Operating and Financial Review, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

By order of the Board

Senior PLC – Results for the year ended 31 December 2008

Website Links To Full Annual Report

It was perhaps surprising that 31 companies did not make any reference to the website on which the full annual report was available. Such information, as well as being a DTR requirement, gives investors a direct link to the most comprehensive source of information on a company's annual performance.

It was also noted that website links appeared in a variety of announcements (annual report announcements, preliminary announcements, annual information updates etc.). This variety of practice could make the announcement including a website link more difficult to locate.

Five companies gave all information required by the DTR in a single statement, whilst a further three made all information available to the market but included in more than one announcement.

To continue reading this article please click on the Next Page link below


1. List! Issue No. 18 – March 2008

2. List! Issue No. 18 – March 2008

3. Available at publications/pub1784

4. List! Issue No. 20 – January 2009

5. Section 435 of Companies Act 2006 is effective for financial years commencing on or after 6 April 2008. Section 240 of Companies Act 1985 is effective for earlier periods.

6. Update to List! subscribers 30 March 2009

7. Debt with a denomination per unit of under €50,000 or equivalent

8. Debt with a denomination per unit of over €50,000 or equivalent

9. The PSM is a non-regulated market for listed debt of any denomination. It is listed for the purpose of the Listing Rules

* This section analyses the findings for all companies other than investment trusts

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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