Around the Traps ... with THE FERRET 08:07, Monday, 1 May 2006
Sydney - Monday - May 1: (RWE Australian Business News) - ************************
Reporting deadlines are a farce.
Friday was the last day for March quarterlies and the ASX went into meltdown coping with the flood of last-minute reporters.
Not only the ASX but news services such as us, RWE Australian Business News, as well.
This farce is played out four times a year.
Six times if you count interim and final profit reports.
How silly it is for companies to be willing to join the lemming rush.
Surely it's obvious that the earlier the companies are with their reporting the more attention they are likely to receive from business reporters and the market generally.
Here's an idea, Mr ASX.
Split the companies into five equal lots and give each of them a deadline that is one of the last five days before the end of the quarter.
A better idea still ... if the company has nothing new to say, and most of them don't, leave it up to them whether they report at all.
*****
Here's another complaint ...
Some news items are not worth keeping in the archives.
Take, for example, MACQUARIE BANK (MBL).
The financial information provider Ferret uses lists 20 news items per page.
In MBL's case the first page is full of Barrier Warrant Terminations, Endowments, Instalment Warrant Distributions and something called ALPS.
That is, there is nothing market-sensitive.
The second page is the same, except here most of the announcements are about Resets, but once again nothing market-sensitive.
Page 3, which has a lot of Satisfaction of Conditions, finally contains a market-sensitive announcement, headlined "Macquarie Goodman Asia establishes A$850m HK wholesale fund".
Pages 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 do not contain anything market-sensitive.
It is not until the bottom of page 14 that we do find one again, headlined "London Stock Exchange plc -Offer Lapsed".
The financial information service we refer to has a maximum 50 pages of news archives per company.
In MBL's case the very last item on page 50 is dated September 23 2005.
It means MBL has a news archive that goes back only SEVEN MONTHS.
What use is that to anyone wanting to research the stock?
The inventive MBL, which has dreamed up millions of sharemarket instruments, is an extreme case.
But there are many stock whose news archives are riddled with useless information - such as long-completed buyback notices, progress depths from long-abandoned wells etc.
The ASX could do us all a favour and cull them.
*****
And yet another complaint ...
Announcements like this get up Ferret's nose:
"Based on the expected timing of significant new deals in FTR and WebCentral's (WCG) managed hosting business, the Company wishes to advise that for the financial year ending 30 June 2006, it expects to achieve revenues of approximately $58.0 - $60.0 million and EBIT of approximately $5.0 - $5.5 million. NPAT for the Company for the financial year ending 30 June 2006 is estimated at $3.2 - $3.5 million."
Here's what's wrong with this announcement.
First, it doesn't tell investors why the announcement is being made and, second, there are no comparative figures.
Still, whenever an investor reads the phrase "timing of significant new deals" the dog whistle starts blowing.
We had to go to the news archives to find WebCentral's net profit last year so we could make sense of Friday's announcement.
The profit was $5 million, so WebCentral is heading for a fall of at least 30 per cent.
WebCentral rose 1c to $1.18 on Friday ahead of the announcement but sellers may well give it a shake today.
(Comments and complaints to [email protected] - no requests for advice please.)
