Mangling the Queen’ss English
COMPANIES FREQUENTLY preface profit announcements with bullet points of important figures, under some such title as “Highlights” or “Salient features”. Esor, which released interim results recently, prefers the latter.
“Salient” is defined by my two favourite authoritative dictionaries as “conspicuous or striking” or “most noticeable or important”. In Esor’s case that covers revenue, EBITDA, net asset value and something called “PPE” – I’m not sure what that is, and I can’t find a corresponding figure in its financial statements. All of which are accompanied by arrows pointing upwards, in self-congratulation.
But, strangely, there’s just an unqualified figure for operating cash generation, and earnings are entirely absent. Yet whichever definition of “salient” is preferred, those items surely qualify.
Can such strange omissions have anything to do with the fact that operating cash generated of R83,5m is well down on the R106,8m in the comparative six months? And headline earnings per share of 23c are 10% down on the previous 25,6c?
Does Esor really think investors are so stupid that they won’t notice those omissions? If it wants to view the world through rose-coloured spectacles it should at least use a term like “Highlights” or “Achievements” rather than “Salient points”. But it will gain more respect in the investment world, and could even enhance its rating, if it bites the bullet and gives the less favourable data appropriate coverage.
Investors may not like bad news, but even less do they like companies that give the impression of trying to gloss over it.
Mind you, Esor is far from the only company willing to mangle the English language to camouflage bad news.
First, it has becoming apparent many companies that listed over the past two years were built on, if not straw, certainly less than rock-solid foundations. Second, entrepreneurs who offloaded scrip at inflated prices are now trying to buy it back cheaply.