The top 10 FTSE 100 reports

A new study has rated the reports of FTSE 100 companies on their demonstration of a commitment to open, transparent reporting; endeavouring to provide a clear picture of what the business does; the market in which it operates and how it has performed.

The company reports were also rated against how much they showed a willingness to talk about the wider resources their business needs and the outcomes of their activities.
In light of the Financial Reporting Council (FRC)’s annual letter to finance directors and audit committee chairs, which outlined the areas of company reports that require improvement, company reporters will need to address these weaknesses in order to match the quality of the reports in the ranking.

The results of Radley Yeldar’s How Does it Stack Up study, are as follows:

1. LandSec

An enhanced overview of key resources and relationships uses elements from the International Integrated Reporting Council’s (IIRC) framework but, crucially, only reports on those that are most relevant to LandSec. Each capital is described and the emphasis is on how it is managed to create value with reporting on recent initiatives and developments.

While this doesn’t claim to be an integrated report, reporting on capitals, combined with more detailed disclosures on sustainability in the additional information section, offer an option for reporters seeking to combine their sustainability report with their annual report.

Forward looking information is strong across the report. The six drivers of opportunities and challenges in the market overview are concise, but insightful, and provide context for the strategy.

Although there is no legal requirement to report on gender pay in an annual report, LandSec has chosen to include this, which helps present a rounded view of their business.

View LandSec’s report here

2. Vodafone

Companies considering how to communicate their purpose for the first time, perhaps following the latest guidance from the Financial Reporting Council (FRC), could take a look at this report. The purpose unfolds over five pages at the front of the report with clear messaging supported by mini case studies.

We’ve always admired the way Vodafone provides context for its strategy, not just for each strategic priority, but also in its market overview. This provides a brief overview of key trends supported by forecasts and a welcome piece on external pressures. In our experience, too few reporters comment on the challenges they face. Outside of the strategic report, there is lots of valuable information in the notes, including a summary of regulation, spectrum licences and mobile termination rates.

Vodafone has identified an appropriate range of financial and non?financial KPIs, which are clearly aligned with its strategic growth engines and core programmes. Changes to the line?up of KPIs are communicated transparently and a full explanation of alternative performance measures is referenced from the financial review and includes everything you would expect to find in a 20F.

The design and layout of the Governance report adopts the same principles as the Strategic report, presenting a consistent approach and showing what can be achieved to make this section engaging and accessible.

View Vodafone’s report here

3. Mondi

Mondi’s annual report continues to demonstrate that sustainability is at the heart of their business and is considered at every stage of the paper and packaging value chain. They’ve also taken an interesting approach to reporting financial information – bringing the more strategic disclosure into a joint CEO & CFO statement, with a section further back for additional detail. Marketplace, risk and governance are all heading towards best-practice, meaning that the report is a strong all-rounder.

View Mondi’s report here

4. Provident Financial Group

Subsequent events mean that some observers may raise an eyebrow when they see the inclusion of Provident Financial Group in our top 10.

The chain of events that led to its first profits warning will no doubt be revealed in due course. When the report was published, nobody could argue that it wasn’t transparent about the planned changes to its business structure. A stronger insight into key resources and relationships may have alerted investors to the importance of a vital network of collection agents and their distinctive qualities.

Otherwise, a decent business model provides a linchpin for the report and has the flexibility to apply across all product segments. A dedicated section describes the market, including past, present and future issues. There are numerous examples of meaningful linkage and the report has adopted a variety of narrative devices.

View PFG’s report here

 

5. BT Group

A cover that has been stripped back could reflect a difficult year for BT Group. Inside the report, BT addresses its difficulties early on with the most senior board members taking the lead.

An excellent piece of guidance for financial KPIs and non financial performance measures for its 2020 ambition and foundation measures provide a rounded view of performance and a forward looking perspective. There is a strong narrative structure for the strategy section and market information is presented by division, which suits the make?up of the business. Risks are covered in detail, including a decent insight into how the risk has changed.

View BT Group’s report here

6. Taylor Wimpey

This UK residential developer has published a really well designed report. It has a clear theme on the cover, which is picked up inside with a strong message section. This is accompanied by nice language and visual treatment that clearly explains what ‘working together’ means to them. There are other good consistent elements of best practice, but the overlap between business model and strategy is something to consider. Most housebuilders have the same fundamental business model, but do they all have the same strategy?

View Taylor Wimpey’s report here

7. United Utilities Group

A really comprehensive report from the UK’s largest provider of water and waste water treatment. It is a big read with lots of excellent best practice content and strong links throughout. Despite the strong content, it feels it would benefit from more breathing space.

The strapline ‘helping life flow smoothly’ is nice, but it isn’t picked up that obviously through the rest of the report, which would help make the report a more engaging story?led read.

View United Utilities Group’s report here

8. Fresnillo

Fresnillo’s report continues to hit the mark in terms of content across much of our criteria with continued excellent strategic discussion, risk coverage and materiality. The report aims to provide a forward-looking slant throughout and there is a real effort to connect the various elements of the report together through thoughtful linkage. With that said, the report isn’t as strong as others in our top 10 for business model, resources and relationships and linkage between performance and remuneration.

View Fresnillo’s report here

9. Ashtead Group

The equipment rental market is cyclical, and Ashtead’s report makes this clear and easy to understand. As well as a detailed marketplace section which explains the cycle, the business model and strategy sections offer further insight into how this affects their business. The narrative in these sections is thorough and nuanced, giving the reader a really comprehensive and balanced understanding of their business.

View Ashtead Group’s report here

10. Coca-Cola Hellenic

Coca-Cola Hellenic (HBC) has produced a report that is arguably many steps ahead of its peers in the FTSE 100, in terms of its journey towards integrated reporting. Sustainability issues feel integrated and key stakeholder relationships are identified and discussed. Material issues are described at length, along with their relationship to the company’s principal risks. However, the addition of several layers of strategic objectives can at times make the overall report confusing. It’s a strong report that is a couple of tweaks away from being truly best-practice.

View Coca-Cola HBC’s report here

 

Read the full article in Financial Director, here.