Annual reports grow for sixth year in a row

ANNUAL reports of UK listed companies have grown in length for a sixth consecutive year, according to new research from Deloitte.

This year the average UK annual report reached 135 pages, up three pages on last year – despite companies making positive inroads in ‘clear and concise’ financial statements which dropped by an average of two pages.

Front-end narrative reporting is driving the overall page increase, with non-GAAP alternative performance measures taking greater prominence.

“There is a growing trend for companies to harness their annual report as a channel in conveying their story around strategy, culture and external impact. This storytelling is a key component of the strategic report and one companies are actively embracing,” said Veronica Poole, partner and head of corporate reporting at Deloitte.

According to Poole, 7% of the companies have either embraced integrated reporting, or are en route to do so.

“This builds on the efforts of over half the companies who are now talking about a wider range of inputs and outputs as part of their business model in a move towards integrated thinking,” she said. “The use of alternative performance measures continues to be an essential part of telling a company’s story.”

The FRC has previously voiced concern around over-prominent presentation of non-GAAP measures. Poole said worryingly 54% of companies gave more prominence to these adjusted measures than to the statutory numbers.

Also, 42% of those companies adopting alternative performance measures as key performance indicators did not reconcile these clearly to their financial statements.