The European Securities and Markets Authority (ESMA) has updated its Q&A on prospectuses. A new question 102 addresses profit forecasts in prospectuses.

The key points from the updated Q&A are as follows:

  • A statement can be a profit forecast if it refers to a range of figures, rather than to a precise figure or a minimum or maximum figure.
  • A statement need not refer to profit or loss for the year to be a profit forecast. It could equally refer to other measures of profitability that convey an expectation of future performance.
  • Similarly, a statement need not cover the entirety of an issuer’s results to be a profit forecast. It will be a forecast if it relates to a segment comprising the “vast majority” of the issuer’s profit.
  • A statement of a “hope or aim” can amount to a forecast, particularly if it includes a specific figure.
  • Saying that a form of words is not a profit forecast will not stop it being a profit forecast.