E&Y: UK profit warnings at record low in 2010
2011 will be a crunch year for UK economy, warns Big Four firm
UK QUOTED companies issued just 196 profit warnings last year, the lowest number recorded and down by 44% from 2009, according to a report by Ernst & Young (E&Y).
The industry sectors with the highest number of warnings in 2010 were support services (38), software and computer services (22), media (16) and general retailers (16), the Big Four accounting firm said.
Keith McGregor, restructuring partner at E&Y, said: “A stronger than expected start to the recovery has provided many UK companies with the opportunity to leverage efficiency savings and exceed earnings expectations in the last twelve months”
But he cautioned that there were are already signs that 2011 could be more testing for some parts of the UK economy, even before the full impact of the government’s spending cuts has been felt.
Companies supplying the public sector are particularly vulnerable to contract cancellations and spending cuts and are likely to make more profit warnings this year, McGregor said.