03 Aug LOOKING AHEAD TO REPORTING SEASON WITH THE AUSTRALIAN FINANCIAL REVIEW
With the 2022 financial year behind us, ASX-listed companies are preparing their results and thinking about what will make investors tick.
But what about that other, all important stakeholder – the media?
Cannings Director Amy Piek sat down with Tom Richardson, Markets Reporter at the Australian Financial Review, for our latest On the Couch podcast episode to discuss what media will be looking for during reporting season.
Here are Richardson’s key insights ahead of earnings season:
WHAT THE MEDIA WILL BE LOOKING FOR IN YOUR ASX STATEMENT
- Bottom line – yes, it matters
The media will first look at a company’s statutory, adjusted net profit or loss figures as they point to the organisation’s overall health. Journalists also look for any signs of changes from previous reporting periods and what has driven those changes.
- Expectations, as in, have you met consensus?
In the current fast-moving macro environment, reporters will often look at whether a company’s results have met analyst expectations. Not only does this provide an overview of how the company has performed compared to market consensus but it makes for an engaging headline.
- Guidance and outlook – crystal ball, anyone?
Guidance statements and commentary on outlook provide the media with an indication of the health of a company and more broadly, the economy.
That said, Tom Richardson believes the current market uncertainty – driven by the war in Ukraine, interest rate hikes, record-high inflation – has made it tough for companies to provide guidance statements.
As Richardson put it: “It’s fair to accept the idea that it might be prudent for a chief executive or senior management not to give guidance at the moment given the volatile macro environment.”
KEY THEME THIS SEASON: COST INFLATION
Cost inflation will be a big theme for media (and for listed companies), as price tags on everything from lettuce to pets and second-hand cars shoots up.
With workers demanding higher wages, supply chain bottlenecks bumping up freight costs and key inputs such as energy and oil, the media will keep a close eye on how companies manage their margins.
TOP TIPS FOR COMPANIES PREPARING RESULTS:
- Make it as easy as possible for journalists
Clear, concise, and simple language is half the battle. So, no spin.
Journalists will always find the figures they are looking for, anyway, so companies should highlight key results at the top of their announcements.
- Context is everything
A big bugbear for journalists when reading a company’s financial statements is the lack of context around why adjustments have been made to profit and cash flow figures.
Companies that provide context not only help journalists gain a better understanding of their results but also ensure greater accuracy and an opportunity for the organisation to comment on performance.
- Access to commentary
Journalists always want more than numbers on a page. Reporters will often ask for an interview with chief executives or other key spokespeople to differentiate their article from other publications. Journalists might also want to speak with market analysts and sell-side brokers for their take on a company’s results and sector trends.
Listen to the latest episode of On the Couch on the following platforms: