Profit warnings hit five-year high

PROFIT warnings from North West stock market companies hit a five-year high in the first quarter.

According to a report from accountancy firm Ernst & Young this regional increase is in contrast with a nationwide decline.

The data shows there were 10 North West warnings, up 43% on the seven in the last three months of 2012 and double the number a year ago. There have not been so many since the first quarter of 2008 when there were 11.

The national figure was 72, down 16% on 86 at the end of 2013, and one less than the same quarter of 2012.

Tom Jack, North West restructuring partner at Ernst & Young said: “North West profit warnings have risen sharply, contrary to an improving UK picture. This is a sign of the continuing challenges businesses are facing in a stagnant market with low levels of investment and growth.

“2013 started with the UK economy punch-drunk from last year’s rapid downgrade of global growth prospects. Uncertainties in the US, eurozone and China hampered the UK’s weak recovery in the second half of 2012, with companies still feeling the effects in 2013 – not least because many concerns remained unresolved.

“But conditions for the year ahead look set to improve, as seen by the rise in gross domestic product for the first quarter of this year. The concerted actions of central banks, improving business confidence and rising consumer spending could provide the UK economy with greater resilience in 2013.”

The sectors that issued the most warnings in the North West were: Support services (2), general industrials (2), and software and computer services (2).