QUOTED COMPANIES issued the most profit warnings since the height of the financial crisis last year, a report by Ernst & Young found.
According to E&Y's latest quarterly Profit Warnings report, main market- and AIM listed- companies issued 86 profit warnings in the final quarter of 2012, taking the year's total to 287- the highest since 2008.
Mounting risks across the eurozone and US, and a slowdown of growth in China, contributed to over 15% of UK quoted companies issued profit warnings in 2012, the highest annual proportion of companies warning since 2008.
Business service companies issued the highest number of warnings in 2012 as a whole, hit by falling activity, widespread corporate cost cutting and contract delays, the survey found.
"Profit expectations dropped sharply in 2012 as economic forecasts fell and escalating risks in key global economies unnerved businesses, leading to delayed investment and purchasing decisions," said Keith McGregor, E&Y's head of restructuring for Europe, Middle East and Africa.
Industrial companies saw the largest increase in the number of profit warnings in 2012, with customers reacting to a volatile economic landscape by delaying orders and destocking, while the transport sector also suffered from falling expectations. Almost 40% of FTSE industrial transportation companies issued a profit warning in 2012, compared with 16% in 2011, E&Y said.
Barring further economic shocks, the number of UK profit warnings is likely to fall in 2013, the survey found.
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