The one lesson corporates should have learned by now is the need for absolute transparency. If there's been problems within the business, a strategic review is normal practice. Announcing the results of such a review gives the group a chance to spell out how it will address problems. So why is it that Snoozebox (ZZZ:AIM), a portable hotels group with zero market credibility following a series of mishaps this year, has ruined its chance to regain market support with a flimsy strategic review announcement?

It is no wonder the shares have once again slumped. Today's announcement contains absolutely no detail on how problems will be fixed; merely saying that the company needs to raise more money. That's a sure-fire ticket to a falling share price, as why would anyone want to buy shares in a financially-distressed business? Hence the stock is today down 18.3% to 29p.

As we discussed earlier this month (click here for story), Snoozebox has suffered accounting problems linked with an Olympics contract where it was unable to recognise all the revenue in its accounts. It went from saying that 2012 results would beat expectations, to spectacularly missing them, costing the finance director his job and leading to the chief executive officer's demotion to a business development role.

Today it says: '(Following a review) the business requires some reorganisation, improved systems and a more rigorous approach to management. In addition, the Company will require further capital to support its 2013 trading programme and to fund and exploit its current pipeline of opportunities.'

So Snoozebox admits the business wasn't run properly and it needs cash. Also disturbing was news that it has withdrawn from two of 14 planned events in 2013 as the 'prospective return was likely to be inadequate'. It doesn't disclose the affected events.

The market likes nothing worse than a lack of detail. Snoozebox really needs to up its game in terms of communication and properly explain how much it will cost to achieve the ambitious growth plans that excited the market last year.

Executive chairman David Morrison came across as a decent chap and was eager to rebuild Snoozebox's credibility when he spoke to Shares earlier this month. He was open and transparent about the challenges ahead. It's a shame this openness hasn't extended into today's stockmarket announcement which once again leaves investors scratching their heads about the future of the business.

Issue Date: 17 May 2013