BusinessCompany NewsQuoted companies hit by spike in profit warnings

Quoted companies hit by spike in profit warnings

Profit warnings issued by UK quoted companies reach highest level since 2008

Quoted companies hit by spike in profit warnings

PROFIT WARNINGS last month rose to their highest level since the financial crisis as a more unsettled economy appeared to shake confidence in the recovery.

According to a report from EY, UK quoted companies issued nearly 20% fewer profit warnings in the third quarter of 2013, compared to the same period last year, but were hit by a spike in warnings during September.

In total, there were 56 profit warnings in the third quarter of 2013, down from 68 in the same period of 2012, with a spike of 26 warnings in September.

“US fiscal battles, taper concerns and emerging market volatility all provided reminders this summer that we’re long way from any kind of economic, financial or monetary normality and the road back won’t be smooth,” said Keith McGregor, EY’s head of restructuring for Europe, Middle East and Africa.

“There is also a sense that we’re moving onto the next stage of the recovery, where growth will be more vital to profits.”

Smaller companies – those with a turnover under £200m – issued more profit warnings in the first three quarters of 2013 than over the same period in 2012, which compares with a 34% fall in profit warnings from companies in the £201m to £1bn turnover band.

Alan Hudson, EY’s UK & Ireland head of restructuring, said: “Smaller companies are inherently more vulnerable to profit warnings since they are more likely to find a squeeze on sales or change in pricing material to profit expectations, although this doesn’t entirely explain why their fortunes are diverging now.”

Related Articles

Top ten firm pinches partner from EY

Administration Top ten firm pinches partner from EY

1y Fraser Simpson, Reporter
PwC to take on Weir Group audit

Accounting Firms PwC to take on Weir Group audit

2y Calum Fuller, Reporter
KPMG to deliver Royal Mail audit

Audit KPMG to deliver Royal Mail audit

3y Richard Crump, Writer
888 plays it safe with EY audit appointment

Accounting Firms 888 plays it safe with EY audit appointment

3y Naomi Rainey, Writer
Weir Group expects to tender audit in 2017

Audit Weir Group expects to tender audit in 2017

4y Richard Crump, Writer
EY issues emphasis of matter note on Co-op Bank

Audit EY issues emphasis of matter note on Co-op Bank

3y Kevin Reed, Writer
EY wins £2m Sage audit contract

Accounting Firms EY wins £2m Sage audit contract

3y Naomi Rainey, Writer
Smith & Nephew ends 77-year audit relationship with EY

Accounting Firms Smith & Nephew ends 77-year audit relationship with EY

3y Richard Crump, Writer