Company Annual Reports

[Dod101]

I am sorry that I now have shares in only five companies that are held in certificated form and so it is only from these companies that I get Annual Reports and other circulars. I know that some companies will send Annual Reports without one's name being on the register if I ask them kindly but not all will do so.

I find it very helpful to get these items as it seems to me to connect me quite directly with the company and I can read the Annual Report like a book, at my leisure, rather than trying to scroll through them on a computer screen. I can also attend an AGM without any fuss, as of right.

When share certificates are dematerialised at some point, we may even lose this so we ought to be fussed about it.

It also occurs to me that there does not seem to be much point in requiring us to place shares in an ISA so that the benefits are tax free. Why cannot they be tax free outside of an ISA provided that the owner is an individual? Being inside an ISA does not make them any less free to be sold for instance and so what otherwise is the benefit to anyone else? All that ISAs do is give money to the ISA manager. (SIPPs are different because they fall under the pension rules as I know to my cost as I have recently asked for my annual payment from my SIPP) Do not forget that the ISA regime also places additional risk on us shareholders, of the ISA manager either being fraudulent or negligent in mucking things up. It happens.

Dod

[yorkshirelad1]

I am sorry that I now have shares in only five companies that are held in certificated form and so it is only from these companies that I get Annual Reports and other circulars. I know that some companies will send Annual Reports without one's name being on the register if I ask them kindly but not all will do so.
I find it very helpful to get these items as it seems to me to connect me quite directly with the company and I can read the Annual Report like a book, at my leisure, rather than trying to scroll through them on a computer screen. I can also attend an AGM without any fuss, as of right.
When share certificates are dematerialised at some point, we may even lose this so we ought to be fussed about it.

(snipped paras on ISA as that's a slightly seperate item)

I tend to agree with you about the principle of receiving reports and communications from a company. Information rights are getting thinner and thinner, and whilst companies might proclaim their wish to do so, Registrars can be a PITA (and very variable) about implementing it. Websites likes https://www.investegate.co.uk/ are a boon in this respect.

In the interests of debate, and not a criticism of Dod101's view, I would disagree about the ability to receive hardcopy reports. Many annual reports extend to hundreds of pages, and the environmental and cost implications of printing and shipping these is no longer tenable. Most companies have been putting their reports on their websites, some going back 20 years or more. Some people may find it difficult reading PDFs on screen (to which I would suggest get a better screen or device). I don't read annual reports from cover to cover, and only read certain sections, which I can search a pdf for, and would hate to receive a 400-page report just to read 5 pages etc. I'm going to stick my neck out and suggest those shareholders who wish a hardcopy annual report should now pay for the environmental privilege of doing so. Personally, I am no longer happy to cross-subsidize that, on cost or environmental grounds.

(I was tempted to create a Poll on the matter of hardcopy annual reports, but the "Poll creation" tab does not appear to be available when replying to a post, but is available when creating a new post in "Investors' Roundtable / Company Analysis", so didn't move forward with that idea)

[Dod101]

I am sorry that I now have shares in only five companies that are held in certificated form and so it is only from these companies that I get Annual Reports and other circulars. I know that some companies will send Annual Reports without one's name being on the register if I ask them kindly but not all will do so.
I find it very helpful to get these items as it seems to me to connect me quite directly with the company and I can read the Annual Report like a book, at my leisure, rather than trying to scroll through them on a computer screen. I can also attend an AGM without any fuss, as of right.
When share certificates are dematerialised at some point, we may even lose this so we ought to be fussed about it.

(snipped paras on ISA as that's a slightly seperate item)

I tend to agree with you about the principle of receiving reports and communications from a company. Information rights are getting thinner and thinner, and whilst companies might proclaim their wish to do so, Registrars can be a PITA (and very variable) about implementing it. Websites likes https://www.investegate.co.uk/ are a boon in this respect.

In the interests of debate, and not a criticism of Dod101's view, I would disagree about the ability to receive hardcopy reports. Many annual reports extend to hundreds of pages, and the environmental and cost implications of printing and shipping these is no longer tenable. Most companies have been putting their reports on their websites, some going back 20 years or more. Some people may find it difficult reading PDFs on screen (to which I would suggest get a better screen or device). I don't read annual reports from cover to cover, and only read certain sections, which I can search a pdf for, and would hate to receive a 400-page report just to read 5 pages etc. I'm going to stick my neck out and suggest those shareholders who wish a hardcopy annual report should now pay for the environmental privilege of doing so. Personally, I am no longer happy to cross-subsidize that, on cost or environmental grounds.

(I was tempted to create a Poll on the matter of hardcopy annual reports, but the "Poll creation" tab does not appear to be available when replying to a post, but is available when creating a new post in "Investors' Roundtable / Company Analysis", so didn't move forward with that idea)

Thanks. I am happy to respect your view. However I am more inclined to think that 400 page Annual Reports ought to be banned in the first place. For instance I get a hard copy Annual Report from HSBC and it almost takes the postman a wheelbarrow to bring it to my door. If I say no one will read it all, that may be an exaggeration but very few 'ordinary' shareholders will and for that matter few analysts will either. Much of it could go onto the internet. But then we sometimes get an abridged Annual Report which inevitably will not contain something I want.

The other point is that companies, rather than sticking to the requirements of company law, often use Annual Reports as an advertising medium with meaningless photos of smiling staff and other guff to tell us how wonderful they are.

Investment Trusts are usually better at that sort of thing and for instance see RIT Capital Partners, Personal Assets and I think Caledonia although even that one is much bigger than it used to be.

As for reading online, I spend too much time in front of my screen anyway and do not find it conducive to an understanding of what a report contains to have to scroll around all the time. With a hard copy report, I can rad it, mark it where I want, turn down a corner of a page and so on. Furthermore, I can take it to an Annual meeting and quote bits of it to the Chairman! (I do not often do that mind you.

Be interested in others' views.

Dod

[TheMotorcycleBoy]

Being newish to the game and tech savvy, I find every single AR I need by just Googling:

<company name> investor relations

e.g. type diageo investor relations will bring up https://www.diageo.com/en/investors/

Works for Yanks and Euro shares too.

However individual firms of course will organise their sites differently, so where exactly the hunted-for PDFs are situated regards the overall site-map may vary. Having said that the above google always get me to the right start position, so to speak.

Matt

[Dod101]

Being newish to the game and tech savvy, I find every single AR I need by just Googling:

<company name> investor relations

e.g. type diageo investor relations will bring up https://www.diageo.com/en/investors/

Works for Yanks and Euro shares too.

However individual firms of course will organise their sites differently, so where exactly the hunted-for PDFs are situated regards the overall site-map may vary. Having said that the above google always get me to the right start position, so to speak.

Matt

Of course. One does not need to be tech savvy to find Annual Reports online. Even for simple sould like me I can find them online easily but that is not the point.

Dod

[TheMotorcycleBoy]

Being newish to the game and tech savvy, I find every single AR I need by just Googling:

<company name> investor relations

e.g. type diageo investor relations will bring up https://www.diageo.com/en/investors/

Works for Yanks and Euro shares too.

However individual firms of course will organise their sites differently, so where exactly the hunted-for PDFs are situated regards the overall site-map may vary. Having said that the above google always get me to the right start position, so to speak.

Matt

Of course. One does not need to be tech savvy to find Annual Reports online. Even for simple sould like me I can find them online easily but that is not the point.

Dod

Apologies. I was unsure of your exact question. It's possible some here may find my words useful; they would probably give my octogenarian Dad and step Mum a head start.

Matt

[Woadrage]

I appreciate this is frustrating for you, but there's an inevitability about it.

The whole business of ARAs is a hiding to nothing for companies*. The information they contain is almost entirely made available to institutionals through meetings and briefings with members of the Board so the institutionals don't read them. The retail investor doesn't read them either. He's only interested in (a) the dividend and (b) how much the directors, especially the CEO, is being paid. Very, VERY few retail investors bother to read the rest of the front end let alone the back end. Unfortunately, the cost of printing and posting these documents is simply uneconomic, especially given the every smaller numbers who insist on hard copy. The last time I was closely involved in the production of a FTSE 250 ARA the cost was around £10 per copy plus postage. That was over 10 years ago so I would expect it to be double that now.

Believe me - it is frankly soul destroying to spend months drafting and redrafting the front end of a modern annual report that almost nobody bothers to read.

* The same goes for AGMs. The only AGM I've attended in a professional capacity which had a good turnout (ie over 50) is Severn Trent. The rest attract half a dozen if the company is lucky, despite the fact that most will have spend thousands on the event, unless there is some scandal or Fred Bloggs from Nuneaton is outraged by some decision or other by the Board. Rumour has it, however, that the Provi AGM used to attact upwards of 50 but only because the company provided a 3-course sit down lunch. Since they took the event in house and started holding it in their new HQ in central Bradford and did away with the lavish lunch, almost nobody turns up there these days.

[Dod101]

I appreciate this is frustrating for you, but there's an inevitability about it.

The whole business of ARAs is a hiding to nothing for companies*. The information they contain is almost entirely made available to institutionals through meetings and briefings with members of the Board so the institutionals don't read them. The retail investor doesn't read them either. He's only interested in (a) the dividend and (b) how much the directors, especially the CEO, is being paid. Very, VERY few retail investors bother to read the rest of the front end let alone the back end. Unfortunately, the cost of printing and posting these documents is simply uneconomic, especially given the every smaller numbers who insist on hard copy. The last time I was closely involved in the production of a FTSE 250 ARA the cost was around £10 per copy plus postage. That was over 10 years ago so I would expect it to be double that now.

Believe me - it is frankly soul destroying to spend months drafting and redrafting the front end of a modern annual report that almost nobody bothers to read.

* The same goes for AGMs. The only AGM I've attended in a professional capacity which had a good turnout (ie over 50) is Severn Trent. The rest attract half a dozen if the company is lucky, despite the fact that most will have spend thousands on the event, unless there is some scandal or Fred Bloggs from Nuneaton is outraged by some decision or other by the Board. Rumour has it, however, that the Provi AGM used to attact upwards of 50 but only because the company provided a 3-course sit down lunch. Since they took the event in house and started holding it in their new HQ in central Bradford and did away with the lavish lunch, almost nobody turns up there these days.

You clearly do not attend many AGMs. It is of course pre Covid the last time I attended the AGM of Unilever or HSBC but both had large numbers in attendance, I am sure well over 200 in each case. Also many AGMs of investment trusts have a fairly large number attending.

Dod

[Dod101]

I was just thinking that when I started attending the AGMs of the Alliance Trust around 1994/5, it was held in one of its meeting rooms in its original offices in Dundee. There were maybe a dozen or so people and a newcomer like me was greeted with a handshake from each of the Directors. Everyone else seemed to know each other. At the conclusion of the formal meeting, we were all treated to a glass of sherry and then sent on our way.

The last time I attended one of their AGMs in person, in 2019 I guess, there were upwards of 200 attendees.

Dod

[Woadrage]

No, I don't attend many AGMs since the majority are held in London, I don't live in London and I still work. It's also fair to say that I've organised more AGMs than I've attended as a shareholder.

I'm aware some companies can get a few hundred attending. Those are typically companies at the upper end of the FTSE 100 and/or privatised utilities with the best part of half a million+ retail shareholders on the register so a turn out of a hundred or so is still pitiful, especially when the same shareholder asks the same bee-in-the-bonnet question every year.

It wouldn't surprise me if AGMs become a thing of the past within a decade or so since institutional investors don't need them and few retail investors bother to attend. Alternatively, making them an entirely online event would allow more shareholders to attend.

[Dod101]

No, I don't attend many AGMs since the majority are held in London, I don't live in London and I still work. It's also fair to say that I've organised more AGMs than I've attended as a shareholder.

I'm aware some companies can get a few hundred attending. Those are typically companies at the upper end of the FTSE 100 and/or privatised utilities with the best part of half a million+ retail shareholders on the register so a turn out of a hundred or so is still pitiful, especially when the same shareholder asks the same bee-in-the-bonnet question every year.

It wouldn't surprise me if AGMs become a thing of the past within a decade or so since institutional investors don't need them and few retail investors bother to attend. Alternatively, making them an entirely online event would allow more shareholders to attend.

I do not live in London either but try to make a point of attending AGMs when I can. I have no doubt that for a small second rate company not many are going to attend an AGM but even small companies get their faithful attending. They are also a very necessary part of shareholder democracy just as Annual reports are. Shareholders are the owners and need to exercise owner's rights.

I should imagine for many of the FTSE100 companies AGMs are probably reasonably well attended although as I said in recent years I have only attended those of HSBC and Unilever, both of which were well attended. Just because you find it soul destroying to draft an Annual Report is no reason to abolish them or even put them on line. You should find yourself a more fulfilling job. Shareholder democracy is very important and if there was an attempt to put everything online there would I hope be righteous indignation.

Dod

[Woadrage]

I have no doubt that for a small second rate company not many are going to attend an AGM but even small companies get their faithful attending.

I'm not sure what you regard as a small second rate company but the ones I'm thinking of include FTSE 250 companies that many on these boards will have invested in at one time or another.

They are also a very necessary part of shareholder democracy just as Annual reports are. Shareholders are the owners and need to exercise owner's rights.

I know. I'm a chartered secretary. Most of my career has been in listed companies or financial services ones.

Just because you find it soul destroying to draft an Annual Report is no reason to abolish them or even put them on line. You should find yourself a more fulfilling job. Shareholder democracy is very important and if there was an attempt to put everything online there would I hope be righteous indignation.

The point is that today's ARA has become a monster that serves almost nobody very well. It's too complicated for the vast majority of retail shareholders and too out of date for institutionals who will receive periodic briefings and updates direct from the Board and management. Yet it costs a fortune to produce, even in on-line format. It absorbs vast amount of time and effort from a number of functions. For a company with a 31 December year end drafting the content starts in October or November and goes onto around April. And yes, it is soul-destroying work because nobody bloody reads it. Many companies used to prepare a summary financial report which was much more geared to the needs of the typical retail shareholder but they were discontinued because they didn't include all the stuff that became required. There's probably an argument for bringing them back in some format.

Sooner or later, the ARA will go entirely on line, just as certificated shares will bite the dust in due course.

[Dod101]

I have no doubt that for a small second rate company not many are going to attend an AGM but even small companies get their faithful attending.

I'm not sure what you regard as a small second rate company but the ones I'm thinking of include FTSE 250 companies that many on these boards will have invested in at one time or another.

They are also a very necessary part of shareholder democracy just as Annual reports are. Shareholders are the owners and need to exercise owner's rights.

I know. I'm a chartered secretary. Most of my career has been in listed companies or financial services ones.

Just because you find it soul destroying to draft an Annual Report is no reason to abolish them or even put them on line. You should find yourself a more fulfilling job. Shareholder democracy is very important and if there was an attempt to put everything online there would I hope be righteous indignation.

The point is that today's ARA has become a monster that serves almost nobody very well. It's too complicated for the vast majority of retail shareholders and too out of date for institutionals who will receive periodic briefings and updates direct from the Board and management. Yet it costs a fortune to produce, even in on-line format. It absorbs vast amount of time and effort from a number of functions. For a company with a 31 December year end drafting the content starts in October or November and goes onto around April. And yes, it is soul-destroying work because nobody bloody reads it. Many companies used to prepare a summary financial report which was much more geared to the needs of the typical retail shareholder but they were discontinued because they didn't include all the stuff that became required. There's probably an argument for bringing them back in some format.

Sooner or later, the ARA will go entirely on line, just as certificated shares will bite the dust in due course.

This morning I received the Annual Report for Unilever PLC and they are clearly much more efficient in producing it than you suggest many companies are. Apart from this being only 22 March, they tell the reader that things are correct up to 24 February, the latest date before the Report went to press. Obviously I do not know when they started to produce it but October would seem a good guess. I know that when I worked for a public company, they used to send photographers round during the Autumn months in preparation for inclusion or not in the Annual Report to 31 December. I have been reading the Unilever Report you will be pleased to know and also the Alliance Trust Report. I have even taken advantage of the invitation in the Unilever Report to write to the Chairman about some issues which have been discussed on the Unilever thread of this site. I await his response in due course. I assume that you are being paid for your efforts so it must be immaterial to you whether anyone reads the reports or not but I will support the retention of the Annual Report in hard copy so long as i am able to do so. The Unilever Report is a perfectly manageable size at 199 pages, the 200th page being blank. I may say that unlike many reports, it has no pages of smiling employees, unless of course the directors and leading executives are to be counted.

Dod

[TheMotorcycleBoy]

I appreciate this is frustrating for you, but there's an inevitability about it.

The whole business of ARAs is a hiding to nothing for companies*. The information they contain is almost entirely made available to institutionals through meetings and briefings with members of the Board so the institutionals don't read them. The retail investor doesn't read them either. He's only interested in (a) the dividend and (b) how much the directors, especially the CEO, is being paid. Very, VERY few retail investors bother to read the rest of the front end let alone the back end.

I consume the financial information in ARs quite avidly, i.e. Income, Balance Sheet and Cash flow statement. I'm certainly interested in far more than the dividend. Presumably so too do investment firms and platform resources (sharepad et al). From the electronic version that is.

I guess most of the words in ARs are somewhat fluffy, but some of firms in my portfolio provide short case studies and graphics, which I find very informative.

Matt

[Woadrage]

I consume the financial information in ARs quite avidly, i.e. Income, Balance Sheet and Cash flow statement. I'm certainly interested in far more than the dividend. Presumably so too do investment firms and platform resources (sharepad et al). From the electronic version that is.

I guess most of the words in ARs are somewhat fluffy, but some of firms in my portfolio provide short case studies and graphics, which I find very informative.

I'd be surprised if members of a forum like this one didn't read and analyse annual reports in depth, but they're not typical of retail investors. Bear in mind that retail investors rarely hold more than 10%, and usually only around 5%, of a listed company's shares and that they're generally either people who received shares at various privatisations in the 1980s or those who've acquired listed company shares through SAYE and other employment related share schemes. Most simply don't have the knowledge to study an ARA in any detail even if they wished to, and over time they can end up costing companies money, or at least being expensive to service.

The front end may seem "fluffy" compared to the back end but it can give an insight into the culture of a company and it's where the Board sets out a lot of its thinking about a company's future direction.

[Charlottesquare]

I have no doubt that for a small second rate company not many are going to attend an AGM but even small companies get their faithful attending.

I'm not sure what you regard as a small second rate company but the ones I'm thinking of include FTSE 250 companies that many on these boards will have invested in at one time or another.

They are also a very necessary part of shareholder democracy just as Annual reports are. Shareholders are the owners and need to exercise owner's rights.

I know. I'm a chartered secretary. Most of my career has been in listed companies or financial services ones.

Just because you find it soul destroying to draft an Annual Report is no reason to abolish them or even put them on line. You should find yourself a more fulfilling job. Shareholder democracy is very important and if there was an attempt to put everything online there would I hope be righteous indignation.

The point is that today's ARA has become a monster that serves almost nobody very well. It's too complicated for the vast majority of retail shareholders and too out of date for institutionals who will receive periodic briefings and updates direct from the Board and management. Yet it costs a fortune to produce, even in on-line format. It absorbs vast amount of time and effort from a number of functions. For a company with a 31 December year end drafting the content starts in October or November and goes onto around April. And yes, it is soul-destroying work because nobody bloody reads it. Many companies used to prepare a summary financial report which was much more geared to the needs of the typical retail shareholder but they were discontinued because they didn't include all the stuff that became required. There's probably an argument for bringing them back in some format.

Sooner or later, the ARA will go entirely on line, just as certificated shares will bite the dust in due course.

This morning I received the Annual Report for Unilever PLC and they are clearly much more efficient in producing it than you suggest many companies are. Apart from this being only 22 March, they tell the reader that things are correct up to 24 February, the latest date before the Report went to press. Obviously I do not know when they started to produce it but October would seem a good guess. I know that when I worked for a public company, they used to send photographers round during the Autumn months in preparation for inclusion or not in the Annual Report to 31 December. I have been reading the Unilever Report you will be pleased to know and also the Alliance Trust Report. I have even taken advantage of the invitation in the Unilever Report to write to the Chairman about some issues which have been discussed on the Unilever thread of this site. I await his response in due course. I assume that you are being paid for your efforts so it must be immaterial to you whether anyone reads the reports or not but I will support the retention of the Annual Report in hard copy so long as i am able to do so. The Unilever Report is a perfectly manageable size at 199 pages, the 200th page being blank. I may say that unlike many reports, it has no pages of smiling employees, unless of course the directors and leading executives are to be counted.

Dod

The accounts are still only up to 31.12.21, they may reference post balance sheet events to Feb but the real substance still takes 8 weeks or so to knock out (need time for the auditors to do their thing, for one). Still faster than me, our YE is 31.12 and I doubt I will complete our year ends much before June.