UK companies are keeping a tight rein on annual report costs, with budgets flat or down in most cases.
The pressure on budgets has been in place for the last few years following the economic downturn that began in 2008, say design agencies.
‘Certainly since 2007/2008, budgets have got a little bit smaller,’ says Adrian Parker, client partner at SAS Design in London. ‘Companies are facing tough times, all costs across the board in every aspect of the business are being looked at carefully, and the functions that run annual reports are expected to do their bit too.
‘Recent legislative changes that have enabled print runs to be reduced have helped in this cost-saving drive,’ Parker continues. ‘At one end of the scale, some have kept all of that cash back, and at the other some have a kept a bit back but reinvested the rest into their online versions.’
As an example of reduced print runs, Parker says one client has gone from 30,000 copies to just 3,000 over the course of the last two or three years.
‘If I compare the figures to five years ago, budgets are reduced, but there is an opportunity in that,’ says Nick Smith, managing director of Living Reporting.
‘What we are saying to clients is, Let’s help you do what you can afford to do extremely well. If you have a budget for a Mini, let’s not try to build a Rolls-Royce Silver Shadow.‘
The size of the annual report budget can vary dramatically from company to company, depending on market cap, production values, the number of shareholders, foreign language requirements and many other factors.
In some cases, large FTSE 100 constituents will fork out several hundred thousand pounds for the project. Smaller FTSE 250 companies, on the other hand, may only pay low five-figure sums for a basic report and website.
Within the overall budget, the amount allocated to the print product has fallen due to lower print runs – the result of legislation requiring shareholders to ‘opt in’ to receive a print report – and increased focus on the online environment.
[Article by Tim Human, Inside Investor Relations]