Rise in third quarter profit warnings
THERE was a sharp year-on-year increase in the number of North West companies issuing profit warnings in the third quarter.
According to accountancy group Ernst & Young’s Profit Warnings report eight companies warned on profits, compared to two during the same period last year. It followed seven in the second quarter.
The warnings were issued across a range of sectors: Construction and materials (1); electronic and electrical equipment (2); general retailers (1); industrial engineering (1); support services (2); and the oil equipment, services and distribution (1).
Sam Woodward, North West restructuring partner, said: “While some profit warnings from consumer facing sectors blamed the poor weather, the underlying weakness of the UK economy and global growth concerns landed the heavier blows to profits and expectations.
“In the UK, an exceptional series of one-off events has inevitably created dips in demand and productivity which has made it hard to get an accurate fix on the state of the economy. Across Europe, the outlook still appears weak and economic growth will remain slow.”
Nationally, UK quoted companies issued 68 warnings, up by a third on the same quarter in 2011, and eight more than the previous quarter.
Twelve companies blamed adverse weather for issuing a profit warning – the highest number since the winter freeze of 2010-11.
However, bad weather was an exacerbating factor in most profit warnings. E&Y said most of these companies had warned before citing weak UK demand, a slowdown in global markets and the growing risks to the economic outlook.
