Ditch Quarterly Results, Fund Giant Urges

One of the City's top fund managers is urging Britain's biggest companies to reduce the amount of information they disclose and focus instead on long-term performance.

Sky News understands that Schroders (LSE: SDR.L - news) , which has £310bn of assets under management, wrote to the chairs of the 350 largest listed companies this week to ask them to consider abandoning the practise of quarterly reporting.

The letter comes a year after the Financial Reporting Council (FRC), the accounting profession's watchdog, said that it would no longer be mandatory for listed companies to publish so-called interim management statements twice a year.

Since then, however, few companies have acted on the FRC's rule-change, with National Grid (LSE: NG.L - news) , the FTSE-100 utility, among the rare exceptions.

Among the FTSE-350 companies which will not be moving to less frequent disclosures is Schroders itself, which believes that the deviations in AUM figures on a quarterly basis make it imperative for it to continue issuing three-monthly updates to investors.

Schroders' letter, which was written by Peter Harrison, the firm's head of investment, said that companies which revert to reporting half-year and annual results only would nevertheless have its support.

"The message is that they want companies to focus on long-term success and that quarterly reporting does little to aid that," said one chairman who received the letter.

Investors complain that the time required to absorb quarterly results is often unproductive because there is little of material value in affecting a company's investment case.

Businesses in seasonally dependent sectors such as retailing, where many listed groups rely heavily on their sales performance during the Christmas period, would not be allowed by investors to end the practise of updating the market in January.

Schroders' call follows that of its larger rival Legal & General Investment Management, which said earlier this summer that quarterly reporting was superfluous.

The issue forms part of a broader debate about long-termism and the UK stock market, an issue which preoccupied Sir Vince Cable, the former Liberal Democrat Business Secretary during the last parliament.

He commissioned a review led by John Kay, who argued that chief executives were afflicted by an obsession with managing their businesses to avoid fluctuations in earnings because of the obligation to report on a quarterly basis.

Schroders declined to comment on the letter.