The sheer volume of pages in strategic reports put out by FTSE 350 companies has almost doubled in the last seven years, according to research by PwC, which warns that some investors and the public are finding it hard to identify the information they require in a mass of annual data and text
Annual reports are now weighing in at an average of 154 pages across the FTSE 350 and 197 pages in the FTSE 100.
FTSE 350 companies' strategic reports are now 41 pages on average, whereas back in 2008, when companies were required to produce an operating and financial review, the mean length of these communications was nearly half at 24 pages.
Banks are the worst offenders with the bulkiest tomes of annual reports averaging out at 339 pages, almost three times the size of retailers' reports, which average 139 pages. In contrast, asset managers’ reports are a third of the size at 109 pages.
Explanatory notes to the financial statements of accounts are five times longer than the statements themselves in the FTSE 100. Companies in the blue riband index produced 55 pages of notes to support financial statements 11 pages long on average.
As well as excessive length, the PwC report, Searching for buried treasure, found that many strategic reports contain a mass of annual data and text, which is largely backward looking and gives very little insight into a company's current and future prospects.
Its analysis suggested that as much as 41% of the FTSE 350 only felt comfortable looking as far ahead as next year and 30% were more vague, preferring to talk about ‘the future’ in broad generic terms.
Mark O' Sullivan, corporate reporting director at PwC, said: ‘Reports are getting larger - and in some cases are the length of a blockbuster novel. It’s vital that the key information - of the financial and non-financial variety- is included. But it also must be easy to find and understand.
‘Many companies set out their strategy and business model, but they do this without explaining how the two connect, how risks affect strategic plans, what resources and relationships really drive the business and how these are being managed and progress measured through KPIs.’
As a result, PwC says many companies are missing out on an opportunity to ‘tell their story in a way that is credible and consistent’ and will boost their brand and instil market confidence.
The firm says it has taken the decision to scrap the paper version of its own annual report and is producing a digital-only version.
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