BRITAIN'S LARGEST quoted companies issued more profit warnings in the final quarter of 2013 than in any three-month period since the height of the financial crisis as tensions in global markets hit company earnings.
According to research by EY, UK-quoted companies issued 73 warnings in the fourth quarter - a rise of 30% on the previous three months - despite warnings for the year as whole reaching a three-year low.
In total, UK quoted companies - Main Market and AIM-listed - issued 255 warnings in 2013, compared to 287 in 2012, while the FTSE 350 felt the brunt of the headwinds, issuing 31 warnings in the final quarter of 2013.
"The 30% quarterly rise in UK profit warnings in the final quarter of last year seems incongruous next to improving economic data, but global growth anxieties reduced profit expectations in late summer, with earnings downgrades continuing into the final quarter of 2013," said Keith McGregor, EY's capital transformation leader for Europe, Middle East, India and Africa.
The sectors with the highest number of companies issuing profit warnings in the last quarter were FTSE support services, while profit warnings from business services, industrial sectors and companies exposed to volatile natural resources markets and the US shutdown led the way in 2013 as a whole.
Alan Hudson, EY's head of restructuring for UK & Ireland, said: "The FTSE support services sector continues to issue a high number of warnings, despite a rapid improvement in industry surveys. Volumes may be increasing, but public and private sector alike are keeping a tight control on costs, resulting in tight margins, intense competition and little room for error for many in the sector."
In contrast, the consumer and housing revival kept profit warnings low across consumer-facing sectors in 2013.
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