Hemscott, the retail financial information provider, has developed and launched a new web site to help investors identify and track their current and potential investments for signs of US-style accounting tricks in the financial reports of UK and Irish companies.
“This new service meets the growing demand from our customers for in-depth, accurate and timely information which we believe only Hemscott can deliver,” says Rosalyn Wilton, Chief Executive of Hemscott. “The need for investors to really do their homework is now essential rather than preferable. We believe Hemscott Premium will prove to be an invaluable resource.”
Hemscott Premium combines a large amount of data, including share price information, extended company financials, news and alerts together with tools to work with this information effectively. These tools include a new stock selector, with which investors can quickly and systematically screen investment opportunities, and a range of stock price calculators.
Subscriptions can be daily, monthly or annual depending upon investor requirements. A daily subscription costs just 2. An annual subscription costs 129. A launch offer of 99 is available for annual subscriptions taken out before the end of August 2002.
In a separate but related development Company Watch, , a British company which tracks the corporate financial health of all companies except those in the financial sector, says the number of large UK companies which have become financially weak has doubled over the past four years.
The research, which looked at 563 UK companies with annual sales of more than 100m, showed some alarming results. Guenter Steinitz, chief executive of Company Watch, says that the Company Watch system has rated 166 of the these companies ‘financially weak’ compared with 85 such companies four years ago. The Company Watch system uses a powerful financial modelling tool with a widely respected track record for accurately identifying changes in corporate financial health. Steinitz also pointed out that, according to his firm’s research, 36 of the 166 ‘financially weak’ companies will need major financial restructuring over the next few years if they are to survive.
The companies under scrutiny showed a dramatic increase in financial weakness across the board. The sectors most notably affected are: manufacturing; media, publishing and entertainment; telecoms and professional services.
Historically, the Company Watch software has identified nine out of ten quoted company failures in advance. It uses complex financial modelling that interrogates companies’ financial statements for combinations of features that were present in those companies that previously failed. The greater the similarity with failed companies, the weaker the company and the greater the need for financial restructuring. The measure of any company’s financial health is the
H-Score, ranging from 0-100, with 100 indicating excellent financial health. Companies scoring 25 or less are in what Company Watch describes as the ‘Warning Area’.
Guenter Steinitz, chief executive of Company Watch, said:
These figures are extremely troubling. While overall UK sales for these large companies grew 48% over the four-year period, profits declined by 13%. This percentage is particularly influenced by a slump in the telecoms sector which in turn is largely due to acquisitions. Overall, of the fourteen UK sectors that formed the subject for this analysis five of those sectors revealed a decline in profits over the four-year period.
These figures will do little to comfort already uneasy shareholders. Despite yesterday’s reassurances about the US economy from Alan Greenspan, chairman of the US Federal Reserve, and some UK economists’ optimism about the UK economy, many of the biggest companies that comprise the UK economy have weakened dramatically over the past four years. If the UK economy does take a turn for the worst, these financially weak companies will become extremely vulnerable.
This review is based on the consolidated results of all UK parent companies with group sales over 100m. It excludes companies in the Financial Sector and UK subsidiaries of foreign parents. The fourteen sectors in the research are: manufacturing; oil and gas; pharmaceuticals; tobacco; media, publishing and entertainment; utilities; construction and real estate; retail; wholesale; hotels & restaurants; transport and cargo; telecoms; software and computers; and professional services.