West Mids profit warnings up 70 per cent
Profit warnings for West Midlands businesses doubled in the final quarter of 2011, according to Ernst & Young.
The accountancy company's Profit Warnings report revealed a 70 per cent increase of warnings by listed businesses.
UK quoted companies, Main Market and AIM listed, issued 88 profit warnings in the final quarter of 2011, an increase from 51 in the third quarter – the highest quarterly jump since the first quarter of 2001.
In the West Midlands there were eight profit warnings issued in the fourth quarter last year, more than twice as many as were issued in the three previous months.
The warnings came from a spread of sectors, with support services and financial services contributing two each.
During the whole of 2011, there were 16 warnings issued in the West Midlands – the same as the previous year.
Tom Lukic, restructuring partner at Ernst & Young in Birmingham, said: "Once again 2011 was a tough year for businesses in the West Midlands and the fourth quarter was particularly difficult, contributing half of the profit warnings for the whole year.
"Many businesses are still expanding profitably, but others – the zombie companies – remain moribund by debt or defunct business models, unable to build value or gain momentum in these challenging economic conditions.
"Creditor patience cannot last forever and as growth becomes increasingly elusive, we expect further rounds of restructuring in the year ahead."
