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A company life map - the rise and fall of a hot stock

Introduction| Course| 621

13. Preliminary results announced

In November 1999, a month after the end of its financial year, Country Bumpkin announces its preliminary results to the Stock Exchange, and they are reported in the press the next day.

The "prelims", as they are sometimes called, summarise the company's performance over the previous year, with details of turnover, profits, taxation and dividends. Even though they are not full results, they can have an impact on the stock price as they are the first concrete evidence of trading performance for the whole year.

The City analysts who follow the stock are expecting a post-tax profit of £3.2m. In fact, CB exceeds the forecasts, with net earnings of £3.5m, equivalent to 21.8p per share. It pays a gross dividend of 8.6p per share which, on the pre-results share price of 300p, is equivalent to a dividend yield of 2.9%.

The company could have paid a higher dividend, but it is going for growth and investors understand that it wants to retain cash resources to pay for expansion.

1. Country Bumpkin - the early days 2. The decision to go public 3. AIM flotation by a placing of new shares 4. AIM flotation by an offer for sale 5. AIM flotation by tender offer 6. AIM flotation by introduction 7. First day of public trading on AIM 8. A growth strategy 9. End of lock-in period 10. The acquisition trail 11. Rights issue 12. Scrip issue 13. Preliminary results announced 14. Full results announced 15. Rumours of a deal - clarifying announcement 16. Takeover of rival - cash and shares deal 17. Convertible loan stock 18. Preparation for the main market 19. Admission to the main market 20. Move into FTSE 250 21. Share split 22. Share buyback 23. Director sells shares 24. New York-led collapse of tech stocks 25. Suspension of shares 26. Hostile bid for Country Bumpkin 27. Liquidation

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