IR Monitor – 4th May 2022

This week’s news

IR Society Best Practice Awards

The IR Society has opened the submissions for this year’s Best Practice Awards, boasting new categories, an increased focus on digital communications and an improved, streamlined application process. The Awards are split into self-entry awards, for which companies can apply to as many categories as they wish, and voted awards, which are awarded according to the results of an in-depth, independent survey of buy- and sell-side professionals. Self-entry categories this year cover IR programmes, innovation in IR, sustainability communications and annual reports, whilst voted awards include best overall IR, best IRO, best newcomer and best investor engagement. The deadline for entries is 31st August, meaning there’s plenty of time to finesse submissions and vie for a spot within the ranks of IR’s crème de la crème.

Apple earnings: a big step back for transparency 

Following the release of Q2 earnings from Apple last week, Bloomberg has picked up on the “worrying” trend that Apple is disclosing less information in its financial reporting. It first began reducing its transparency two years ago due to disruptions caused by the pandemic. Back then it felt unable to issue revenue guidance as global instability, major supply chain disruptions and chip shortages precluded forecasts. With disclosures such as revenue guidance yet to return, Bloomberg calls Apple’s position today on transparency “a convenient excuse to share less with investors.” Shipment numbers are no longer being declared and there is reduced transparency in its supply chain reports. Compared to peers such as Microsoft and Meta (who both managed to issue revenue guidance this quarter), Apple’s lack of disclosure has set a contentious and notable precedent in this year’s Big Tech reporting.

Investors express importance of live remarks in earnings calls 

What do you think of pre-recorded, prepared remarks in earnings calls? According to recent research by IR Magazine, more than seven in 10 investors believe it important for remarks to be given live during earnings calls and not pre-recorded. A quarter of companies, globally, now pre-record their prepared remarks for calls – a practice most common in North America. It is least common in Asia, where just 17% pre-record their remarks to investors. One advantage of pre-recording  is that it reduces stress and is one less thing to worry about on the day of the call. However, many prefer the spontaneity of live remarks which can also be adjusted, in real time, for changing circumstances. In North America at least, the “covid trend” of pre-recorded remarks is set to persist, but whether they gain popularity elsewhere is looking less likely.

Time to revive UK markets  

The Financial Times has deemed ‘now’ as an ideal time to revive the UK stock market. The argument that the UK market is in decline is not new, as the number of UK companies listed on the stock exchange has almost halved over the past 25 years.  The FT calls the declining UK stock market a “microcosm” of the structural challenges facing both the UK economy and the City in the wake of Brexit and the pandemic. It has also identified rebooting equity markets as a key area of focus required in order to address these challenges. It is calling for equity markets and the City to reconnect with the wider economy and society, so that more companies list and stay in the UK, and more UK investors become engaged to provide these companies with the capital they need. The FT calls this year “a once in a generation opportunity to start afresh.”

Fake news alive and well in IR

In rather bizarre circumstances, Marketwatch has reported that a fraudulent press release of which Opiant Pharmaceuticals Inc. were the subject sent shares in the company up by nearly 30% on Friday. The press release, issued via the PR Newswire service, claimed that Opiant had signed an exclusive $225 million commercialisation and licensing agreement with Hikma Pharmaceuticals PLC, based in the UK. It was later confirmed by both companies that no such agreement existed, with a spokesperson for Opiant describing the press release as fake. Opiant shares were changing hands at $23.79, up 29%, before trading was eventually halted. This is at least the third time in the last year that PR Newswire has been the conduit for a “pump and dump” scheme after fraudulent releases were also attributed to Kroger and Walmart.

And finally … Don’t say things that are obviously true, and other conference survival tips 

With investor conferences finally making their return in physical form, Simon Kuper has given his conference presentation advice in the FT. The ten top tips include a few that will resonate with any IR officer: know that the audience is bored even before you open your mouth; your listeners will remember at most one idea from your talk; help keep the audience concentrated by speaking for less than your allotted time; and, best of all, don’t say things that are obviously true. “All stakeholders need to work together” is a lead balloon as is “We must be sustainable”.

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