UK QUOTED COMPANIES issued a ‘remarkably high’ number of profit warnings in the first three months of the year as corporate warnings hit their highest rate since the financial crisis, according to research by accountants EY.
In total, 76 companies issued profit warnings in the first quarter of 2016, while 17.2% of UK public companies issued profit warnings in the 12 months to the end of March – the highest level since 2008.
Almost half of the companies warning in the first quarter had also issued at least one warning in the last year, while 20 of the UK’s largest public companies were forced to revise down market expectation in the first quarter.
“Weak oil prices once again featured highly, but it’s not the only factor denting expectations. The volatile start to 2016 created uncertain and difficult conditions for companies reliant on contract renewals. Central bank action has soothed market concerns, but the global economy is still struggling to build momentum,” the report said.
The FTSE sectors leading profit warnings in the first quarter were support services, general retailers and media. The FTSE sectors with the highest percentage of companies warning in the year-to-date are oil equipment, services & distribution, mobile telecommunications and electronic & electrical equipment.