Trading statements are a real cultural artefact of the London reporting environment. While US companies are obliged to report quarterly financial results, here in the UK we only get a full set of numbers from listed companies twice a year. To fill the gap between announcements, UK companies routinely issue ‘Trading Statements’.
And while these statements are often light on financial information (especially compared to full financial results, or annual reports), they tend to kick off a cycle where analysts revise their earnings expectations upwards or downwards. Buy or sell intent from the investment community then feeds into the market, driving share price trends.
As a private investor, getting ahead of these cycles is key, which is why trading statements matter.
That is why we have kicked off this body of research, which aims to understand the anatomy of positive trading statements (if you're looking for guidance on how to respond to negative trading statement, or profit warnings, check out our full survival guide here).
This project is a work in progress, so we will keep building on it in the coming weeks and months, but we hope these initial findings provide you with some ideas. Especially during the hectic financial reporting season.