Insider Media Limited

The number of profit warnings issued by West Midlands listed businesses in 2010 is the lowest it has been for four years. According to research by Ernst & Young, just 16 warnings were given last year, compared with 20 in the previous year.

In 2010 across the West Midlands, warnings came from businesses operating in aerospace and defence (1), electrical and electronic equipment (1), general retailers (1), health care equipment and services (1), industrial engineering (4), software and computer services (1), support services (3), travel and leisure (2) and financial services (2).

UK quoted companies issued just 196 profit warnings in 2010, the lowest number ever recorded. In 2009, a collective 282 warnings were given.

The sectors with the highest number of warnings for the year were: support services (38), software and computer services (22), media (16) and general retailers (16).

Ian Best, partner and head of restructuring at Ernst & Young in the Midlands, 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 12 months.

“However, there are already signs that 2011 could be more testing for some parts of the UK economy. Market conditions in several service sectors are already tightening, even though the full impact of the Chancellor’s austerity measures have yet to arrive in earnest.

"Substantial changes to levels and patterns of public sector spending, both here and abroad, make some long-term losers and short-term pain inevitable.”