Engineering companies’ annual reports are among the worst for providing useful information to shareholders, according to a recent survey by the Foundation for Performance Measurement.
All six engineers in the FTSE-100 index appear in the bottom half of a table which ranks information quantity and quality. The least informative report was that of British Aerospace (now BAE Systems), which came in 97th. Highest-ranked was Rolls-Royce, in 64th place.
Investors could be frightened away by a lack of information, FPM secretary Heather Chatwin warned. `Small investors can’t tell much from annual reports,’ she said.
A lack of performance targets also makes it difficult to hold company directors to account, FPM said. Just one of the six engineering companies, Invensys, published any targets at all.
`You wouldn’t get away with that in internal management reports,’ Chatwin said.
Some companies may already be improving their reports. A spokesman for Smiths Industries (ranked 80th) said the FPM analysis was based on last year’s report, while the 1999 report contained much more information. `We are conscious of the need to give shareholders the best information we can,’ he said.