Where to find company news and results, and why they matter

I'm Russ Moold, AJ Bell's Investment director. Welcome to this series of six short videos designed to show you how to interpret company accounts, where to find the information and help you ultimately do your own research and cut through some of the complexity that you'll come across. If you're studying individual stocks and shares and making those selections for yourself.

so this is the exact framework for these six webinars. As you can see very clearly, the first one's going to talk about simply where we can find the news. And then we'll start the the process of taking again out that complexity and helping you pick through what's important, cut out the noise and again help you do your research so you can find stocks that fit your overall strategy, risk appetite, target returns, and time horizon and hopefully get better returns for the risk that you're taking.

So here we are. First of all, before we go any further, we have to do the all important disclaimer. So please take a very close look at this. It is very important. I'll give you a couple of seconds to look at that.

Okay. So here we go. So let's start off with the basics. Where can we find this information before we can then start to interpret it.
First of all you know again it's all about doing your own research, protecting the downside as well as trying to find the upside. The good news is it's not rocket science.

I'm not an accountant.

I'm not an economist. I'm not a management consultant. I read history university. I've pretty much managed to teach myself this along the way,
with some help from some very, very useful friends, I hasten to add.

But it is nevertheless a numbers game narrative will take us so far with a stock of that there is no doubt. But in the end it comes down to the quality, as well as the quantity of the company's profits and its cash flow and the strength of its balance sheet, and then valuation and profits and cash flow and balance sheet, all interlinked.

And they will in turn, chip price and earnings, not just the amount of profit but the quality of it. And again, therefore, the price or the multiple investors prepared to pay to get their piece of the action. Now, you can argue it's a bit of a science because it's not just about finding a good story, though that is obviously a pretty helpful starting point.

It's about understanding corporate strategy and how that shapes performance and the results really there, how we keep score. How effective is that strategy now? The art of it. Let's face it, companies have an incentive to put the best possible face on that they can. We'll go through why?

But it's partly to please you. The shareholder keep their bank sweet, reassure their customers.

There's lots of reasons for them to put a peanut. Put a pretty good face on things here. So we need to not just look at them, but interpret them and understand them and at times use a little bit of imagination. So yes, the science to it, but there's art to it as well. And we'll try to help you with both in this series of webinars.

Okay. So these are the absolute basics UK quoted in UK listed companies are obliged to report twice a year an interim or half year sets of results, and a full year of results that cover the company's entire financial year. Now that can run from January to December. It according to the UK tax year from April to March. Or it can cover a period that the company has chosen for itself.

And by the way, we'll look into why that might be, why it has chosen its own financial year.

And these full statements will feature a complete profit and loss account, cash flow statement and balance sheet, the three key parts of any company sets of accounts now in between, we may get scheduled trading statements. We may get unscheduled ones.

If something's gone better than expected or worse than expected, they may or may not feature a full set of accounts. In all likelihood, they probably won't, but they will back reference what we've seen already, or indeed any guidance that the company has given for the future. Now, a company will issue an unscheduled statement if the earnings are going to materially differ from what they've previously guided to, or what analysts in the stock market is currently expecting.

In discounting now defined material, let's call it 10% divergence as a rough rule of thumb.

So schedule statements every six months, you may get scheduled ones in between possibly every quarter. And then if things go well, you may get something popping out of the woodwork at any time.

Okay, so normally and I say normally this news will come out in the UK at 7:00 in the morning.

There's no obligation to publish it then, but it's generally best practice. Companies can put things out during the day if it's a takeover approach, for example. Well, who knows when the borders finally completed, it's deliberations and fields are able to disclose that to the market generally. 7 a.m. in the UK. In the US, they'll tend to go motionless before the bell, before market opening, often around 130 UK time or after the bell when the US market shoots nine 930 UK time, depending on what time of year we're up now.

Again, companies will occasionally, if they're being in a bit of a naughty mood, try and slip something out when nobody's looking. But generally speaking, they will play with the straight but times for companies to slip out profit warnings. Christmas Eve, New Year's Eve and a half trading days. Things when they're hoping that somebody's don't around necessarily. But generally speaking, there is obviously an obligation on me to be transparent and clear.

7 a.m. in the morning is when most of this important news will come out, and it will do so through the official outlet of the Regulatory News Service, or R and S, and you can find this on the London Stock Exchange website. You can also find it on many other outlets that you can access for free or as a subscriber.

Now a company will also, after this process, publishes annual report and accounts. You can also find, by the way, the interim statements, full year results and trading statements on the company's investor relations website. And there will always be the the annual report accounts for the most recent versions and they'll not just give you the PNL cash flow and balance sheet, but a full commentary on everything from executive pay.

So it's diversity, equality and inclusion policies. So a ream of notes explaining much greater detail, the actual profit and loss, cash flow and balance sheet. And sometimes the devil does indeed lie in that detail. If you've been really diligent and really careful, sometimes that's where we need to look.
And if you go to the London Stock Exchange website, easy to find, click on where it says News and prices. That pop up box will appear.

And then you click on Regulatory News, where you might sometimes get a button that comes up and says, are you a private or professional investor or a market intermediary? Just click on Private Investor. You'll go straight through, okay, so why does this all matter? Well, these numbers matter again because narrative helps. But ultimately we're in a numbers game here.

And this is how we keep scores is how shelves can measure how well a company's strategy is working. It helps bankers and lenders assess a company's credit worthiness, make sure that they were happy to continue to lend. So that's important for the company to it's important for the customers. It can be reassuring for customers know they're dealing with a big firm where it can read its numbers, see how well it's doing.

It might also persuade firms to try and drive a bit of a hard bargain. Of course, regulators may want to have a look to make sure that everything is transparent and that there is a there is a fair market operation. And also from the point of view of management and even staff, dare I say stakeholders, these results can trigger options or bonuses or other rewards.

Now also from a regulatory point of view, again, what these numbers are therefore is to make sure that you are getting a fair deal, that nobody's got more information that you have and that the every investor be a professional institutional hedge fund, long or short of all, got the same information at the same time. So is a fair chance of protecting that downside and maximizing their upside and getting their risk adjusted rewards that they're seeking.

So this is designed to prevent insider dealing, unlawful disclosure, market manipulation, or to use regulatory speak, market abuse, for which of course, the criminal penalty.

So in some information on companies financial performance is regularly easily available London Stock Exchange website. Your platforms website should carry it and you can also find this information on company specific websites as well.

Normally pops out at seven in the morning and they're, generally speaking, designed to be helpful. Keep you updated and show that you have the best possible picture of a company's current trading situation so you can make a judgment, perhaps using that information as what you think it may be worth buying or avoiding the shares.

Equally, you've got to be aware that this is just a snapshot.

It covers a relatively short period of time three, six, 12 months. Well, let's face it, investment point of view, holding people holding patterns for certain investors can be an awful lot longer than that. So again, these numbers need interpreting.

They're not just there as a one off there. There is an edge to thought, not a substitute for it.

There is no right answer.

And the profit and loss account, cash flow and balance sheet must be studied together to form a full three dimensional view. We all tend to gallop towards a profit and loss account and look at the headline earnings per share, a number that's just one tiny part of it. And often looking at the cash flow can tell us about quality, and the balance sheet can tell us about risk, but also a potential reward.

But in this next video, what we'll be doing is looking at the profit and loss account and the different definitions of profit that you'll come across and how useful or otherwise they might be.