Following the historic UK referendum on June 23, some analysts indicated that, up to that point, only a handful of companies had provided risk factors related to the potential consequences of a “Brexit”. Since then, the volume of such disclosures has picked up, albeit only slightly. We were able to identify 37 filings1 from 34 companies that mention Brexit. Most of the disclosures are to be found in the risk factors section.
Just yesterday, however, we saw our first disclosure to provide an estimate of the impact of Brexit on a company’s financial results. In its recent quarterly release, Merus Labs (NASDAQ: MSLI), a pharmaceutical company that mainly operates in Europe and Canada, stated that Brexit is expected to affect EBITDA by approximately 1%, “as less than 10% of Merus’ total sales are in the UK”.
We expect many more companies to provide Brexit-related disclosures as we move into earnings season. For additional information, contact us at email@example.com.
1. Filings analyzed include 6-K, 8-K, 10-K, 10-Q, 20-F, and 40-F.↩