Four out of five Australian firms maintain meeting blackout period

Sep 19, 2013
<p>AIRA poll finds majority of top companies have lockouts for analysts and investors ahead of earnings calls</p>

A snap poll conducted by the Australasian Investor Relations Association (AIRA) finds 80 percent of companies in the country have a blackout period governing meetings with analysts and investors.

Of those, 70 percent say their quiet period – in which IR teams will not meet with analysts or investors – last from the end of their balance date until the official release of their financial results. Among the rest, the majority restrict their blackouts to between two and four weeks prior to the release of financial results.

One in five respondents to the poll say they don’t have any formal blackout periods, while 67 percent admit they make some exceptions even when observing restrictions. Common reasons include meetings with offshore investors, in which non-financial information can be discussed, and introductory meetings to inform potential investors about the company generally.

‘With CEO approval we can take a meeting in very exceptional circumstances, but it would typically be either just a couple of days post-balance date, or be carved out from information about current year results,’ says one of those polled.

Opinions among Australian IROs seem fairly consistent, as many believe blackout periods are an important part of maintaining proper disclosure practices. ‘They are imperative to good governance and should be a regulatory requirement,’ adds one respondent.

‘Operating a blackout period suggests a very conservative approach to communications,’ says another. ‘It is important that all involved in communicating with analysts and investors are aware of the disclosure risks involved in holding meetings at any time, regardless of timing.’

A previous NIRI survey from 2010 found that 42 percent of US companies maintained a pre-earnings release quiet period of at least four weeks. Two thirds of those did not participate in any broker conferences, with 54 percent adding that their respective management did not entertain one-on-one calls, during such periods.

Fifty-four respondents from the S&P and ASX top 200 companies answered the AIRA snap poll. Those polled were asked to describe how they manage blackout periods and monitoring at their respective companies.

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