Man­gling the Queen’ss English

Finweek English Edition - - Thecompanyyoukeep -

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.

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