* In unprecedented move, FCA asks firms to delay results
* Delay to better understand impact of coronavirus on
operations
* Kingfisher, AG Barr, Mears Group, Lamprell impacted
* Hong Kong, Spain have taken similar measures
* For FACTBOX on delays:
(Recasts, adds background, context)
By Simon Jessop, Huw Jones and Muvija M
LONDON, March 23 (Reuters) - British companies on Monday
rushed to heed unprecedented calls by regulators to mothball
their results in the face of the escalating coronavirus, the
latest rewrite of the financial market rulebook.
Britain's Financial Conduct Authority said on Saturday that
listed companies planning to report over the next few days
should hold off for two weeks to better assess how the pandemic
is affecting their business.
The move, the first time UK Plc has ever been asked to
suspend results en masse, follows similar actions in countries
including Spain and China and comes as firms grapple with just
how deep an expected global recession is likely to be.
Auditors are also likely to struggle to sign off companies'
accounts as the first-quarter reporting season nears.
"It is hard for management to accurately say how badly they
will be hit," said Russ Mould, investment director at AJ Bell.
"All they can really do is state how they intend to preserve
cash, clarify the current level of cash and debt in the
business, give some guidance on how they intend to protect
workers, and explain what the next steps might be in their
crisis management plan."
With trillions of dollars already shed from fear-driven
global markets, investors are also flying blind in their ability
to assess companies' health and ability to stay in business just
as they were preparing for first-quarter trading updates to
start filtering through.
The delay in updates "naturally makes my job a little more
difficult in trying to decipher a company’s wellbeing", but was
"a reflection of the unprecedented times", said Helal Miah,
Investment Research Analyst at The Share Centre.
11 AND COUNTING
By 0954 GMT, 11 British companies had responded to the FCA's
call including home improvement group Kingfisher, drinks
maker A.G. Barr and outsourcer Mears Group. At
least 50 companies were expected to report in the week to March
27, data from Refinitiv showed.
The Financial Reporting Council (FRC), which polices
accountants that check the books of listed companies in Britain,
said on Monday it backed the FCA's decision and that auditors
could broaden their approach to delays in company financial
statements as the situation "rapidly" evolves.
"It is important that due consideration is given by
companies to these events in preparing all reporting," the FRC
said.
"The FRC therefore encourages listed companies and their
auditors to consider carefully whether they should delay other
corporate reports for the next two weeks, such as interim
financial statements and final audited financial statements,
except where necessary to meet a legal or regulatory
requirement," the watchdog said in a statement.
The FCA, FRC and the Bank of England's Prudential Regulation
Authority are expected to come out with a further package of
measures, perhaps as soon as this week, while the delayed
results are likely to fuel calls for stock markets to be
suspended.
PwC and KPMG, two of the world's "Big Four" auditing firms,
welcomed the delay.
"It is clear that given the pressures on people and the
changes that we see day to day, it is in the public interest for
reporting to be delayed to give companies the time to properly
consider the impacts on their results," said Jon Holt, head of
audit at KPMG UK.
Separately on Monday, the London Stock Exchange said it was
looking into whether annual meetings of companies could be held
online during the epidemic.
(Additional reporting by by Sinead Cruise in London, Jesus
Aguado Gonzalez in Madrid; editing by Jason Neely and Josephine
Mason)
