Actions speak louder than words

A study of last week’s financial announcements in the sector brought home how little some companies have learned about self-promotion. 


The more experienced operators like Chime and Cello made measured announcements about acquisitions.  Chime made no audacious claims about buying Maidstone Road Holdings (parent of the Icon group that provides marketing support for sports sponsors and the like).  The most positive statements included phrases like “the acquisition…significantly increases Chime’s sports marketing business in the football arena” and “Chime sees significant growth opportunities for Icon resulting from the Olympic Games in London in 2012 and in Rio in 2016”.  Or as Lord Bell – someone who is not unaware of the power of publicity – put it calmly: “Icon is an attractive business at an attractive price.” 


The Cello acquisition of Red Kite Consulting Group was a modest one by any standards notwithstanding its quality client base and apparent strategic fit.  And Cello described it accordingly: “Red Kite is a well established brand in the pharmaceutical space and this acquisition further reinforces our strong position in the healthcare market”. 


Compare those announcements with the outburst from the acquirer of loss-making Burst Media, the historically loss-making Blinkx:  “We are extremely excited about the acquisition…by fusing Blinkx’s unique patented technology and large video index with Burst’s massive reach, we have the potential to create personalised, online television that is watched by hundreds of millions of users.”   The key word in that announcement was “potential”. 


Closer examination of Blinkx’s past announcements reveals several further doses of hyperbole:   “Founded in 2004 by Suranga Chandratillake, the company completed a tremendously successful IPO on the London Stock Exchange (AIM) in May 2007 rising in the first week of trading to a market capitalisation of US$350m…”   


This was followed by: “I am pleased to report another exceptional performance this year. While the full year financial results were excellent, our second half was nothing short of transformational as the business moved into EBITDA positive territory, ahead of expectations.” 


A few months later we read: “The six months ending September 30, 2010 have been game-changing.”  


Words like “game-changing” and “transformational” should be used with great care as they have a knack of returning later in the opposite context.  Admittedly Blinkx achieved a profit of $2 million in the latest half year for the first time and has been growing fast.  Nevertheless its losses to date amount to $33 million and, while it may well prove to be a massively profitable business over time, wouldn’t it be better to have achieved at least some of that success before trumpeting its prowess with such certainty? 


But there again, perhaps loss-making Asia Digital Holdings has really found Utopia somewhere in the Far East where its chief executive tells us: “The digital revolution taking place in the Asia Pacific region is extremely promising…The incredible rates of economic growth, urbanisation and internet adoption being seen there provide an ideal platform for our ambitious growth strategy.” 


Bob Willott is editor of “Marketing Services Financial Intelligence” at


  • Shunil Roy-Chaudhuri

    In a lecture from an MSc Finance class several years ago, some research was cited showing that the use of positive vocabulary in company statements was negatively correlated with company performance. Nuff said.