BusinessCompany NewsProfit warnings jump 20%

Profit warnings jump 20%

21% jump recorded by E&Y in first quarter compared to same period in 2006

In the first quarter of 2007, 103 profit warnings were issued by UK quoted
companies, a 21% rise on quarter one of 2006 and an increase of 17% on quarter
four 2006, according to research by
Ernst & Young.

The firm revealed that profit warnings increased dramatically in the first
quarter of 2007 to 103 from 88.
Profit
warnings
last exceeded 100 in a single quarter in the third quarter of 2005,
when rapid oil price inflation was the main cause of the increase. The last time
they rose above 100 in the first quarter was in 2001.

The highest warning sectors were general retailers with 18, software &
computer services with 17, support services and general financial both with 11
and media companies with ten profit warnings.

Keith
McGregor, corporate restructuring partner
at Ernst & Young said: The
retail sector has become polarised. Just 11 companies have been responsible for
over 70% of sector profit warnings issued in the last 12 months.

Further reading:

Insolvency specialist’s shares recover after profit
warning

Profit warnings down 10% for 2006

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