NW profit warnings rise again after Q2 ‘blip’
PROFIT warnings in the North West rose dramatically in the third quarter of 2009, new figures show.
Ten profit warnings were issued in the region in the three months to September, up from three in the previous quarter, according to Ernst & Young research out today.
Indeed, the North West region recorded the second highest number of warnings in the UK after London, which issued 15 warnings.
But Tom Jack, restructuring partner at Ernst & Young in Manchester, said profit warnings in the region have just returned to an expected level after what he called a “blip” in the previous quarter.
Across the UK, quoted companies issued 52 profits warnings in the quarter . This is a six-year low, which represents a year-on-year drop of 53% and a 17% drop on the second quarter of 2009.
Mr Jack said: “Whilst the UK as a whole records a six-year low – it is unclear whether this is only a temporary respite – the evidence supports that the North West is still very much in the thick of it. Many businesses are still suffering from low demand and pricing pressures, coupled with continuing strain on working capital facilities.”
The general financial and support services sector were the worst hit in the region, with each issuing multiple warnings. Other sectors to issue a profit warning in the North West were construction, food producers, industrial engineering, oil equipment, services and distribution, and personal goods.
Mr Jack added: “While today’s challenges may appear less pressing than those faced in 2008, they are equally stern. A long period of weak growth will weigh heavily on results and confidence and chip away already dented balance sheets.”
