Profit warnings jump in first quarter
THE number of profit alerts sounded by North West listed companies increased in the first three months of 2015, despite UK economic conditions continuing to improve, according to EY’s latest Profit Warnings report.
Warnings from retailers AO World and N Brown were among eight issued in the first quarter of 2015, representing the highest quarterly total since Q1 2013. There were five profit warnings in the North West in Q1 2014 and seven in the final quarter of 2014.
In total UK quoted companies issued 77 profit warnings in the first quarter of 2015, three more than the same period of 2014, but 16 less than the previous quarter.
Tom Jack, restructuring partner at EY in the North West, said: “Following a year in which profit warnings fell by 15% in the North West – bucking a national increase – the first set of results for 2015 remind us that it’s still a tough environment in which to plan and forecast.
“The recovery hasn’t increased predictability and companies still have little room for manoeuvre when things don’t go according to plan, such as lost contracts, adverse currency movements or price drops.
“New entrants add to the competitive tension – as does the accumulated pressure to invest. Companies need to work hard to create a distinctive and adaptable business that can translate an improving outlook into stronger earnings growth.”
Despite the uptick in Q1 EY expect the number of UK profit warnings to fall.
