A plain English guide to corporate jargon
A respected analyst provides a light-hearted explanation of what corporate speak really means.
31st July 2018 10:41
by Lee Wild from interactive investor
Share on
Making sense of company statements is not always easy, so this respected analyst provides a light-hearted explanation of what corporate speak really means.
On some days, there are dozens of corporate announcements. On one particular day, many updates in the financials space, according to analyst Jeremy Grime, could simply have been condensed to the two words "in line". But that would not have made for a very interesting morning research note.
"What a strange world of spin we have created under the cloak of 'transparency'," says Grime.
- Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts
It is why he has put together an amusing checklist, which investors can use to understand what company bosses are really telling us this reporting season. Despite the light-hearted approach, many of the translations are very recognisable.
| Wording in a company trading statement | What it really means |
|---|---|
| State-of-the-art systems | We are in shock at what the latest software upgrade cost |
| Record revenue | 1% growth |
| Successful acquisition | Unlike all the previous acquisitions |
| Strategic acquisition | We overpaid |
| Complimentary acquisition | The existing business is ex growth |
| Investment in business | Haemorrhaging cash |
| Data management | Putting mailing lists together |
| Momentum maintained | It is about to slow |
| Focus on margin | Because there is no growth |
| Solid | We arrested the implosion |
| Rigorous cost discipline | Last one out turn the lights off |
| Remains on target | We can leave the downgrade until next quarter |
| These are strong results | Even though you cannot tell from the numbers |
| Well positioned | No growth environment |
| Parachute | Landing comfortably after being thrown from HQ by angry investors |
| Unseasonal weather | Sales are plummeting |
| Model | Designed to handle everything except what is about to happen |
| Profit jump | A one-off gain |
| Moderately above | The cupboard is bare |
| Negative growth | Terminal decline |
| Inflection point | When we are reporting huge losses |
| Poised to benefit | No upside currently |
| Pure play | Concentration risk |
| Multi-product | Lack of focus |
| Pleased | This time it is not a profit warning |
| Cautious approach | Everyone is going bust |
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.