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Avoid calamity - read the results

A man carefully reads through company results
With the UK’s results season in full swing, it’s a good time to think about what to look for in company numbers.

This time last year we commented on a poor set of results from drinks wholesaler, Conviviality. The share price had fallen after disappointing numbers, but we were more concerned that management had made no mention of the challenges facing many of the restaurants and bars it supplied. Some digging through the results statement uncovered major red flags. Within two months, the company had gone into administration.

The saga of Conviviality is prime evidence of the importance in reading financial results - carefully. Investors who took management at their word when they said things would come good were badly burned. Those…

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