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  • Sam Schofield

How one sentence can wipe millions from a business's value

One dubious sentence in a 20,000 word annual report / results update can cost a publicly traded company millions (or even billions) in lost share price. Just one. The report can be glowing in every other respect, but investors will read that malign little sentence hidden in a forest of verbiage, and 25% of your company's value vanishes almost instantly.


You might think this is an exaggeration but I've witnessed this twice in recent months, with two completely different companies I'm not going to mention by name. Company one has revenues in the region of £600m per annum and company two is around the £1.2bn mark. Both companies experienced double digit revenue growth over the previous 12 months (both were 20%+) and a good proportion of this translated to profit growth as well (10%+). Amazing right? Outperforming the wider market. Outperforming inflation at a time when it's riding close to that double digit range.


Both companies have great future prospects, with good positions in growing market places, and solid growth plans. I hasten to add, they're in completely different industries - one retail, one telecommunications.


To quote the opening line of one of their full year results updates:

"2022 saw another year of strategic execution, delivering strong growth in profit before tax for the sixth year in succession."

Read on for several paragraphs and all sounds amazing... and then... this line:

"Since the fourth quarter of 2022 we have seen delays to some of our customers' decision making and whilst we expect a more challenging first half of 2023..."

Boom! 15% of the company's value gone just like that. And more drips away over the following weeks, until the company is down around 30% since the start of the year.


The other company had an almost identical line in their report, blaming the wider market (inflation / interest rates) for an expected weaker first half of 2023. Boom! Share price down 20%. And this despite the company performing better than it ever had previously. And by some margin.


Now obviously these companies have to report on this. There is no getting around it. They pre-empt what they know will be relatively poor figures in the next report with a little warning to investors, so it doesn't come as quite as much of a shock. They are bound by strict regulations on what they need to include in their report.


So the point I'm making is this: what and how we communicate with our audience, in this case investors, can have a huge impact on a business. Picking and choosing our words carefully, constructing sentences in such a way, ordering them into paragraphs, sections, and pages, carries way more weight than many care to admit. When it comes to something as important as a financial report, quotes from an MD/CEO, trading updates, press releases, even social media messages (see Elon Musk's impact on his companies' seesawing value), we need to pay extra attention to what is being said.


Working with a professional copywriter, especially one with journalistic/PR experience, can make a huge difference. A great copywriter can embody your audience, get into the mind of those who will be reading your words, and write in such a way to appeal to that audience. In respects of financial reporting, obviously they will have to work alongside accountants and legal advisors, but a highly-experienced copywriter will fine-tune the words to achieve exactly what you want them to achieve.


If you would like to know more about our professional copywriting services, get in touch with Schofield Communications today by emailing sam@schofieldcomms.com.

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