Fewer NW profit warnings in 2013
THE North West saw a 25% drop in the number of profit warnings issued last year, down to 20 from 27.
But there was a year-on-year increase in the final quarter, up to four from two, according to the latest research from Ernst & Young.
The accountancy firm said of the four in the final quarter, three were classified as support services firms and one was general industrial.
Across the UK profit warnings fell to a three-year low in 2013 but 73 were issued in the final quarter, up 30%. In total, UK quoted companies listed on the main market and the Alternative Investment Market (AIM), issued 255 warnings in 2013, compared to 287 in 2012.
Tom Jack, EY’s restructuring partner in the North West, said: “The fall in the total number of warnings in 2013 compared with 2012 is significant, and suggests that conditions may finally be improving for North West businesses.
“The 30% quarterly rise in UK profit warnings in the final quarter of last year seems incongruous next to the improving economic data, but global growth anxieties reduced profit expectations in late summer, with earnings downgrades continuing into the final quarter of 2013.
“An improving economic outlook should see profit warnings fall in 2014, although perhaps by less than the pace of recovery might suggest. The year has started with a faster pace of alerts than 2013, with companies still feeling the impact of slower global markets, with the added complication of weaker currency translation as sterling strengthens in anticipation of higher UK interest rates.”
