(Bloomberg) — British regulators asked publicly traded companies to delay reporting their results for at least two weeks as the coronavirus pandemic freezes business activity and causes chaos for those attempting to prepare financial statements.
The Financial Conduct Authority said Saturday that it would “strongly request” that companies postpone publishing if they planned to report earnings imminently. More than 50 firms were scheduled to publish half- and full-year figures over the next two weeks, including housebuilder Bellway Plc and medical equipment maker Smiths Group Plc.
“The unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly,” the FCA said. “It is important that due consideration is given by companies to these events in preparing their disclosures. Observing timetables set before this crisis arose may not give companies the necessary time to do this.”
Companies across all industries are reeling as nations go into lockdown to combat the deadly pandemic. A fifth of the market value of Britain’s 100 biggest listed companies has been wiped out in the past two weeks as panic spread through global markets. While the U.K. hasn’t officially stopped people from leaving their homes, the government has ordered all restaurants, pubs and leisure businesses to close.
“This is a sensible step by the FCA to give companies additional time to assess a rapidly changing environment,” said Matthew Fell, chief U.K. policy director for the Confederation of British Industry. “Given the scale of the disruption, firms will be keen for further guidance on how to approach the reporting season more generally.”
The FCA believes that preparing financial statements is adding unnecessary pressure on companies and their auditors. The regulator also said it’s talking with the Financial Reporting Council and Prudential Regulation Authority about a package of measures to make sure companies take enough time to prepare the appropriate disclosures.
Smiths Group was due to report half-year earnings on March 31, and is among the companies facing a fluid situation. It’s part of a group of firms that the British government has tasked with manufacturing 5,000 additional ventilators within two weeks and 30,000 over the coming months.
“It’s important that companies have time to reflect on the current situation and fully digest the implications for corporate reporting, given how fast-moving the last few days have been,” Hemione Hudson, head of U.K. audit at PwC, said by email. “We are working closely with regulators and businesses to support the provision of trustworthy information to the market.”
