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Can I have some financial information about the company?

The vast majority of any profits that the business makes are ploughed back into the business for expansion. The shareholders vote to give themselves a minimal dividend each year. This philosophy is in keeping with the businesses strategy to double its size every 5 years.

Unlike some of the other companies in the Business Profiles section, Samworth Brothers were not keen to release their accounts data. The company has to file its accounts with Companies House and details can be gained from that body. However, as a private limited company, there is no obligation on the business to publish its accounts to the general public.

A reluctance to share accounts details may be for a variety of reasons. One of them is certainly not anything to do with fraud or dodgy dealing!! Remember the accounts still have to be lodged with Companies House and must be fully audited and scrutinised.

Think instead of what a set of accounts tells you. It gives information about the assets and liabilities of the firm, its financial structure as well as its performance. Such information can be very useful to competitors and customers and businesses want to try to maintain their competitive advantage in every way they can.

Not wildly publicising the accounts therefore may be one factor contributing to this.

Think also about how a rival business or the supplier might use that information. If a rival supplier to Tesco discovered that Kettleby Foods' profit margin on its Cottage Pie range was 30% it could go to Tesco and offer to supply it for a lower profit margin. In addition, Tesco could well turn round to Kettleby Foods and put pressure on the firm to cut its prices to Tesco if it thought the firm was making too much money from Tesco's business!

You might ask if the accounts are available for only £5.00 from Companies House, why doesn't Tesco check up on them anyway? In reality, they may well have done. Tesco might recognise though that a good, reliable and efficient supplier is important to them in managing their business. Tesco might recognise that they have a responsibility to their suppliers as stakeholders in allowing the supplier to make a decent living out of the relationship. It might also be that Tesco process in excess of 4 million invoices per month and simply do not have the time to check on the myriad of suppliers that they deal with in the course of the business!

There are, therefore, important competitive reasons why a firm may be guarded about publicising its results.

Unlike many businesses, Kettleby Foods have to ensure that they monitor the business performance far more regularly than may be the case in businesses where the market is not so fast moving. As a result, the company has software that generates a weekly set of accounts. These accounts show the fixed and variable costs, revenues, budget details and variances. The extent of the detail of the data allows the Directors and managers to maintain a high degree of flexibility in monitoring performance, identifying where problems might lie and comparing the current schedules with the yearly targets.

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