4 March 2021

The return of Guidance


In April 2020, we wrote that more than 80% of companies withdrew their FY20 guidance amid uncertainty surrounding COVID-19. During the February 2021 earnings season, we recommenced monitoring the results of S&P/ASX300 companies to establish to what extent the provision of guidance has been re-adopted and how companies are viewing (the remainder of) FY21.

In analysing the nature of guidance, we looked at whether it had some quantitative elements to help define outlook, or if it was purely qualitative. If there was a mixture, for the purposes of this report it was considered as quantitative.

Qualitative Guidance has become more popular since COVID-19

Despite a similar percentage of reporting companies giving guidance (70%) in February 2021 to February 2019 (71%), we identified a change in the way it is delivered with 30% of companies choosing to provide it in a qualitative manner.

This reverses the pre-COVID 19 trend of quantitative guidance becoming more widely adopted. The share of companies providing quantitative guidance had steadily grown from 65% in February 2018 to 81% by August 2019 (the last time we conducted an investigation).

The majority of sectors increased the proportion of qualitative guidance they provide

The proportion of companies giving guidance qualitatively increased in all but three sectors (Utilities, Materials and Information Technology).

Healthcare, which gave the highest proportion of qualitative guidance in both 2019 and 2021, was the only sector with more than half of constituents providing guidance in a qualitative manner (63% up from 38%). Other sectors experiencing notable changes were Consumer Staples (45% up from 27%), Industrials (42% up from 27%), Consumer Discretionary (42% up from 18%), Consumer Staples (50% up from 27%) and Communication Services (33% up from 0%).

Other than Utilities, where all companies that provided guidance did so quantitatively, the sectors with the greatest provision of quantitative guidance were Materials (83%) and Real Estate (79%).

Notably, 64% of companies in the Materials sector provided non-financial guidance – most commonly giving their outlook on Production volumes – which was the highest of any sector.

Smaller companies give more qualitative guidance

The findings showed that companies of all sizes within the ASX300 provide more qualitative guidance this time compared with February 2019.

Small cap companies – defined as ASX300 (Ex-200) – gave qualitative guidance 34% of the time, which was up from 25% in February 2019. Large Companies (ASX100) and Mid-Cap companies (ASX200 Ex 100) each gave qualitative guidance 28% of the time, compared to 12% and 22%, respectively, in 2019.

Notwithstanding this, we found that ASX20 members continue to provide qualitative guidance at an above average rate – 38% of their guidance was qualitative, compared to the ASX300 average of 30% – and often provided information on key segments, rather than giving a group-wide outlook. This is consistent with previous investigations.

The rate of companies providing guidance is around Pre-COVID levels

We found 70% of reporting companies provided guidance in their results announcement, which was broadly in line with our findings in the February 2019 reporting season (71%) and marginally below February 2018 (73%).

The rapid re-emergence of guidance may in part reflect the recent changes to Guidance Note 8, which we wrote about last month. Entities are now required to “consider notifying the market of a potential earnings surprise if any when it expects there to be a 15% or greater difference between its actual or projected earnings for the period and its best estimate of the market’s expectations for its earnings…”.

Guidance is mostly positive

Our analysis suggests 68% of companies provided guidance that was positive or optimistic about FY21. This observation is consistent with recent findings of Morgan Stanley that, in the lead up to February, there were two profit updates for every downgrade (www.afr.com).

Healthcare, which provided the lowest concentration of total guidance and the highest proportion of qualitative guidance, was the most optimistic about the future with 88% of companies expecting an improved FY21 result. This may in part reflect the fact that companies who are proportionally more affected by the health crisis, and therefore less optimistic, were unable (or unwilling) to restate guidance after withdrawing it.

The next most optimistic sectors were Financials (86% had a positive outlook), Communication Services (82%) and Materials and Real Estate (71% each). Utilities and Industrials were the most cautious about the future.

There was no discernable difference when breaking down the optimism of outlook by Index.

31 January 2021

ASX introduces new ‘15% Rule’

Ben Rebbeck, Founding Director Recently, the ASX announced updates to Guidance Note 8 on continuous disclosure requirements in relation to earnings guidance. While the ASX retained the framework of its existing guidance in the update, its changes to Guidance Note 8 include a new ‘15% Rule’ regarding the impact of broker consensus earnings on guidance and earnings […]

Read More
11 December 2020

2020! A year like no other

2020 was a year filled with extreme and extraordinary events. All of which played out in the context of the extraordinary global health crisis that is the Coronavirus pandemic. A year of extremes Here in Australia we endured bush fire disasters, the death of the Holden car brand and the tragedy of SAS war crimes […]

Read More
28 September 2020


VICTORIA GEDDES, Executive Director. As the market braces for an avalanche of IPOs to hit the market in the December quarter, it is time to review our playbook for IPO investor relations, to highlight just what it takes to maximise the chances of a successful life after listing. Here are our top 10 Investor Relations tips […]

Read More
30 March 2020

Guidance in Uncertain Times

VICTORIA GEDDES, Executive Director Guidance and outlook statements, freshly minted from the February reporting season, are already being consigned to the waste paper basket. This makes sense when every week brings a new development that has the potential to threaten the very survival of many businesses. So what do you say to your shareholders when […]

Read More
3 September 2019

FIRST Advisers Annual Guidance Report – FY20

DAN JONES, MANAGER SHAREHOLDER ANALYTICS During August we monitored companies in the S&P/ASX300 Index that reported for the period ending 30 June 2019, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook for FY20. Victoria Geddes, Co-founding Executive Director at FIRST Advisers said “If […]

Read More
29 March 2019

Feb 2019 Guidance Review

DAN JONES, MANAGER SHAREHOLDER ANALYTICS During February we monitored companies in the S&P/ASX300 Index that reported for the period ending 31 December 2018, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook for FY19. Around three quarters of companies within the S&P/ASX 300 index […]

Read More
31 January 2019

February reporting preview

We entered the last reporting season in August 2018 with a high degree of optimism. That optimism was very short-lived as markets experienced a sharp sell-off in August, with actual results falling short of previous forecasts. Subsequently, news headlines have kept investors in a pessimistic mood, examples being the ongoing Brexit uncertainty and the ever-present […]

Read More
31 January 2019

Timing Matters When Releasing Results

It is important for a company to select an appropriate day when presenting its financial results.  With so many companies competing for attention from buy-side, sell-side and financial media, the correct timing of a result can be very important, especially for smaller companies. Understanding where the peaks and troughs are during a reporting season can help […]

Read More
3 September 2018

Who, What & How Much? What FY19 Guidance is Telling Us

Dan Jones, Manager Shareholder Analytics During August we monitored all companies in the S&P/ASX300 Index that reported for the period ending 30 June 2018, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook. Almost 250 companies within the S&P/ASX 300 index gave their results […]

Read More
27 July 2018


Ben Rebbeck, Executive Director As we enter the 2018 results reporting season, earnings and operational guidance again becomes a topic of significant concern. Recently in the US, industry leaders including Warren Buffett and Jamie Dimon joined the debate arguing that public companies should reduce or eliminate the practice of estimating quarterly earnings (EPS), as this […]

Read More
5 March 2018

Analysing Guidance – February 2018

Dan Jones, Shareholder Analytics and IR During February we monitored all companies in the S&P/ASX300 Index that reported for the period ending 31 December 2017, building a picture of the approach to guidance in this market and what that guidance is telling us about the outlook for FY2018. There were 214 companies within the S&P/ASX […]

Read More
2 August 2017

Trading Updates for FY17 Reported in July

As a precursor to monitoring how companies provide guidance for FY18, we have been tracking Trading Updates for FY17 that were released during July by ASX300 companies (only 4%). The take-outs are as follows: 42% provided an upgrade from their previous guidance with the price performance experiencing a similar upward trend 33% of the companies […]

Read More
9 June 2017

The Importance of Non-Financial Information

NIRI Annual Conference 2017 Ben Rebbeck, Executive Director On 4 June 2017, the National Investor Relations Institute (NIRI) Annual Conference got underway in Orlando, Florida. This Conference brings together over one thousand of the world’s thought leaders and senior professionals in Investor Relations and it is one that we have been attending religiously for the past […]

Read More
5 July 2016

Surviving Brexit: Disclosure and guidance in uncertain times

Ben Rebbeck, Executive Director If there is one consistent thing the financial markets are saying about Brexit, it’s that there are uncertain times ahead for every major economy – and by extension, for the prospects and financial performance of every major company. When uncertainty reigns, we often hear management or Boards describe disclosure and guidance […]

Read More
1 July 2015

ASX’s New Continuous Disclosure Guidelines Apply From Today

Philippa Ellis, Corporate Governance & Company Secretarial ASX Guidance Note 8 Continuous Disclosure (GN8), which expands the guidance on earnings surprises, publication of analyst forecasts and consensus estimates, and investor briefings, comes into force today (July 1). The ASX released its consultation paper outlining its proposed changes to GN8 in March 2015. On June 22 […]

Read More
18 May 2015

Guidance to go out of fashion?

The new ASX guidelines may discourage companies from making earnings predictions public The proposed changes to the guidelines for listed companies on their continuous disclosure obligations (ASX Guidance Note 8) will provide greater clarity and a more pragmatic approach for companies that find themselves facing a sudden change in their profit expectations and want to […]

Read More
18 February 2015

ASIC Revisits Guidelines on Collective Action by Investors

The Australian Securities and Investments Commission is revisiting its guidelines around collective action by institutional investors and calling for public comment. This has become a hotter topic in the past few years with the increasing assertiveness of activist shareholders and recognition that collective action by investors can be good for financial markets.

Read More