Profit warnings buck optimistic outlook

Link: Middle market shows confidence in economy

Seventy-one listed companies issued profit warnings between January and March 2004, up from 52 for the last three months of 2003, a rise of 37%.

The figure was, however, down on last year’s warnings for the same period, which totalled 81, a report by Ernst & Young has found.

The highest number of profit warnings came from the software and computer services sector and from general retailers.

Richard Coates, corporate restructuring partner at E&Y, said that while the figures were ‘hardly good news’ there was ‘no need to hit the panic button’.

‘The recovery is still under way, but it remains patchy, selective, stuttering, hard to read and beset by nervousness. Amid such uncertainty, it is the smaller players that feel the bumps on the road,’ he added.

A survey by KPMG earlier this week found that the vast majority of companies with turnovers in excess of £500m believe the economy is on an upward curve.

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