Firms face drive for extra reports

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The Independent Online
COMPANIES are to be urged to publish an extra trading statement between their interim and final results to close the communication gap that has developed since insider dealing rules were tightened.

The Financial Communications Committee, a group of City investor relations and public relations experts, is expected to make the recommendation in guidance notes to be published in September.

The FCC, chaired by the former Liberal Democrat president Sir Ian Wrigglesworth, fears that false markets may develop in the shares of companies that say nothing in the seven-month gap between their interim and final results.

In the five months between the final and interim results, by contrast, companies normally give details of current trading both in the annual report and at their annual meeting.

Companies have noticeably clammed up after London International Group was censured last year for giving favoured analysts price-sensitive information rather than making the announcement through the Stock Exchange.

The guide, which still has to be approved by the Stock Exchange and the Takeover Panel, also recommends that companies influenced by seasonal factors make appropriate additional statements, as many retailers already do after Christmas.

It also suggests company spokespeople only talk to stockbroking analysts and journalists in the presence of a third party.

The recommendation on extra trading statements is likely to be treated with suspicion by companies worried they may ultimately be pressured into quarterly reporting, as practised in the US.

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