Profit warnings fall in Q1

FEWER North West companies issued profits warnings in the first quarter.

Eight warnings were put out by quoted companies in the first three months compared to 10 in the final quarter of 2010, according to Ernst & Young’s latest Profit Warnings report.

But this figure is still high compared to the same period in 2010 when there were just three warnings.

The national figures show a sharp 50% quarter-on-quarter increase with 75 profit warnings.

Ernst & Young said North West companines issuing profit warnings were working in construction, the media, retail, industrial engineering, support services, and travel and leisure. A quarter of the companies blamed increasing costs and pricing pressures.

Tom Jack, restructuring partner at Ernst & Young said, “Although a third of companies cited last December’s cold snap as a significant factor affecting their trading performance, the snow was a contributing, rather than lead factor, in many of these profit warnings. By the end of the quarter, squeezed consumer spending and rising commodity price concerns had moved to the fore.”
 
He added: “Overall, the UK’s recovery looks just about strong enough to withstand these tests, but growth in many sections of the economy will remain subdued and, against a trickier domestic backdrop, consumer-facing companies in particular are finding 2011 much tougher going than 2010.”