UK-listed companies issued 20 per cent fewer profit warnings in the third quarter but FTSE firms had their worst September since 2008, according to a new survey.
Quoted companies issued 56 profit warnings in the third quarter, compared with 68 a year earlier, according to accountants EY. But while this may suggest improving economic conditions, FTSE firms had a difficult September. A total of 26 warnings were issued in the month, the highest September figure since the height of the financial crisis.
Keith McGregor, EY’s head of restructuring for Europe, Middle East and Africa, said: “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 and the road back won’t be smooth.”
The research also revealed disparity between small and large firms. Profit warnings jumped 6 per cent among companies with a turnover of less than £200m, while warnings fell 34 per cent among larger firms.
Mr McGregor commented: “Whatever the reason, if the earnings of smaller companies are recovering less quickly than expected, they may be less able to drive economic and employment growth – and that has implications for the entire economy.”
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