Good morning!
There's not much news today, so I'll go back to an announcement from yesterday, and have a closer look.
Avesco (LON:AVS)
Share price: 261p (up 1.0% today)
No. shares: 19.1m
Market cap: £49.9m
(at the time of writing, I hold a long position in this share)
Trading update - this was announced yesterday at 12:46pm. Why??? It's crazy to put out a trading update during market hours, as that creates a false market in the shares. Someone might see that the price has gone up, and decide to sell, not realising that there's been a price-sensitive announcement. Professionals can usually read, interpret, and react to trading updates much more quickly than amateurs, which gives an unfair advantage. Thus In my view it should be obligatory to announce price-sensitive news at 7am, to give everyone an equal chance to digest the news, before the market opens.
The trading update said;
Avesco Group plc (the "Group"), the provider of services to the corporate presentation, entertainment and broadcast markets, is pleased to report that trading over the summer months has been strong, particularly in its Creative Technology ("CT") division.
In the US, CT continues to grow revenue, while CT London had a very successful Olympics in Brazil providing equipment and services to many of the ceremonies and events in and around Rio de Janeiro. CT London will be providing further equipment and services during the Paralympics.
Consequently the directors anticipate that results for the year to 30 September 2016 will be comfortably ahead of their previous expectations.
So now we're into the usual silly game of having to guess what they actually mean by "comfortably ahead". Why can't they just give some numbers?
A reader called PJ007 posted a useful comment yesterday, giving his interpretation of what specific words in trading updates mean. He's even copyrighted it! I think this looks very sensible, so it's worthy of repeating here;
"Materially better" than expectations : +10% to +15% beat
"Comfortably ahead" of expectations : +2% to +10% beat
"In line" with expectations : 0 to +2% beat
"Broadly in line" with expectations : 0 to -5% miss
Anything worse than this and a Boardroom shuffle is pending. Hope this helps!© PJ0077 2016
I urge companies & advisers to stop playing this game, and instead just give us facts & figures in trading updates. That is best…