EY: Profit warnings static, but difficult times ahead
The number of profit warnings has remained static in the West Midlands during the third quarter with only three issued by quoted companies, according to a report by Ernst & Young (EY).
This is down from the five issued in the same quarter in 2009.
The sectors from which profit warnings were issued were aerospace and defence, general retail and financial services.
Despite the relative lack of profit warnings, companies interviewed by the business consultancy said trading conditions were worsening.
Ian Best, partner and head of restructuring at EY in Birmingham, said: “At first glance, the third quarter of 2010 was much like the second. The number of profit warnings remained almost static and well below average for the sixth quarter in a row, with business-to-business service companies well represented once again.
“However, look below the surface and there are some very telling changes. In particular, the number of companies citing fiscal retrenchment doubled quarter-on-quarter, from six to 12, and the proportion of companies reporting difficult trading conditions rose significantly for the first time this year to 50 per cent.”
