Profit warnings increase but remain low
THE number of profit warnings issued by North West public companies doubled in the the third quarter but remain low.
Just four warnings were issued by companies in the region from July to September according to a report by accountancy firm Ernst & Young.
It said quarterly profit warnings have remained low in the region – under four – in the last nine months, well below the region’s four-year average of seven.
One warning was issued by a media company, two by non-life insurance firms and one by a company operating in the travel and leisure sector. Nine profit warnings have been issued in 2010 so far, almost two thirds less than the 27 recorded in the same period last year.
UK quoted companies issued 46 profit warnings in the third quarter, compared to 45 in the previous quarter. The UK sectors with the highest number of warnings were: support services with seven; software & computer services on six; travel and leisure with five; and media, also with five.
Tom Jack, restructuring partner at Ernst & Young in Manchester, said: “At first glance, the third quarter of 2010 was much like the second. The number of UK profit warnings remained almost static and well below average for the sixth quarter in a row.
“However, look below the surface and there are some very telling changes. In particular, the number of UK companies citing fiscal retrenchment doubled quarter-on-quarter, from six to 12, and the proportion of UK companies reporting difficult trading conditions rose significantly for the first time this year to 50%.”
