BusinessCompany NewsProfit warnings fall to two-year low

Profit warnings fall to two-year low

Profit warnings - and their accompanying share price falls - are both down, according to figures from Ernst & Young.

They fell from 91 in the first quarter of 2002 to 67 in the second quarter, their lowest level since the beginning of 2000. Company share prices fell an average 17.5% on the first day’s trading following a warning, compared with 21.9% in the first quarter.

Alan Bloom, head of corporate restructuring at Ernst & Young, identified two reasons for the decline.

‘Companies are getting better at forecasting market conditions in the current economic climate. There is much more realism in the UK marketplace and a better grasp of what profit figures can actually be achieved.

‘Secondly there were no major external shocks. If companies issued a warning this quarter it was due to internal difficulties, not external circumstances.’

Related Articles

M&S business rate liabilities based on £570m rateable value

Company News M&S business rate liabilities based on £570m rateable value

4m Emma Smith, Managing Editor
BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

8m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

1y Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

1y Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

1y Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

1y Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

1y Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

1y Emma Smith, Managing Editor