Risk & Economy » Regulation » Profit warnings reach three-year high

UK PROFIT WARNINGS have hit a three-year high after more than 100 warnings were issued in the first half of 2014, according to a new report.

Figures from EY show 137 firms, such as retailers Mothercare and Mulberry, and outsourcing company Serco, have issued profit warnings this year, Investment Week reported.

Last week, supermarket giant Tesco issued a profit warning following poor sales which led to the departure of chief executive Philip Clarke.

The total figure is up 9% year-on-year and the highest figure since the first half of 2011.

Reasons given by firms included competitive pressures, strong sterling, and squeezed margins.

Consumer goods manufacturers were the most likely to struggle, the report found, with 16% of firms issuing warnings, almost double the amount in 2013.

This pressure on firms comes despite GDP figures showing the UK economy has returned to its pre-crisis strength, posting GDP growth of 0.8% for the second quarter of 2014.