The number of listed companies making profit warnings has risen to four in the past quarter – despite a falling trend across the year.
EY’s latest Profit Warnings report shows a big hike from the solitary warning made in the second quarter – with US fiscal battles and emerging market volatility being blamed.
However, the total profit warnings issued so far this year in the region is 11 and compared to the same period last year, warnings are down 31 per cent. Nationally, UK quoted companies issued nearly 20 per cent fewer profit warnings in the third quarter of 2013 compared to the same period last year.
Tom Lukic, EY’s restructuring partner in the Midlands, said: “In the UK, the economic outlook is still improving, as the overall fall in warnings suggests, but expectations have dipped. US fiscal battles, taper concerns and emerging market volatility all provided reminders this summer that we’re a long way from any kind of economic, financial or monetary normality.”
The rise in activity across most parts of the UK economy helped profit warnings to fall in almost all FTSE sectors. Those with the highest number of profit warnings in the third quarter were support services, general financial and software and computer services.
Research suggests the recovery is leaving one critical group of companies behind. Smaller companies – with a turnover under £200 million – have issued more profit warnings in the first three quarters than the same period in 2012 – 118 compared to 111.