Sharp fall in profit warnings

PROFIT warnings from listed businesses in the North West fell by 60% in the second quarter of this year, according to data from accountancy firm EY.

Four warnings were made in the region between April and June 2013, compared to 10 in the first quarter.

The firm said the drop reflected an upwards shift in economic activity and renewed confidence.

The region follows the UK trend, which saw a 25% quarter-on-quarter fall from 72 to 54 warnings – the largest in four years.

Tom Jack, North West restructuring partner at EY said: “The UK recovery certainly appears more entrenched and better placed to ride out the aftershocks that have triggered sobering second half dips in economic activity in recent years.

“That said, the economy still faces significant domestic challenges, especially from inflation. A stagnant eurozone and cooling emerging markets also look likely to place a speed limit on growth.

“A more benign economic climate should keep the number of profit warnings low, but below par growth will continue to create challenges. Companies should still be flexing their operating and financial structures to adapt and make the most of what is still a relatively modest recovery.”

Sectors to issue warnings in the North West in the second quarter included: general industrials (1), software and computer services (2), and general financial (1).