Insider Media Limited

The number of profit warnings issued by East Midlands listed businesses in 2010 is the lowest it has been for four years, with only nine announced. That's according to new figures from Ernst & Young.

In 2009, there were 11 warnings across the East Midlands, 23 in 2008 and 32 in 2007.

In 2010 across the East Midlands, warnings came from businesses operating in construction and materials (1), industrial engineering (2), software and computer services (1), support services (1), household goods & home construction (2), food and drug retailers (2).

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.”

National figures showed UK quoted companies issued 196 profit warnings in 2010, the lowest number recorded, compared to 282 warnings in 2009. 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).

Best added: “Forecasting will be more difficult and many companies have been rightly cautious in their recent statements. However, volatility in demand and prices in 2011 could still catch companies out and we expect profit warnings to rise back towards their average levels in the year ahead.”