Profit warnings at a three-year high in 2014
UK- listed companies issued the highest number of profit warnings since 2011 in this year’s first half.
Despite strong signs of recovery in the economy, companies say pricing pressures and currency headwinds are denting expectations.
Quoted companies issued 137 warnings in the first six months of 2014, up nine per cent on the same period of last year and the highest first-half total for three years, according to EY’s latest Profit Warnings report.
In the first half of the year, 19 per cent of profit warnings cited competitive or pricing pressures, compared with seven per cent in 2013.
Adverse currency movements triggered over a fifth of profit warnings in the first half of 2014, compared with just three per cent last year.
Consumer goods manufacturers were hard-hit by pressures, with warnings in that sector almost doubling from nine per cent in the first half of 2013 to 16 per cent this year.
FTSE sectors issuing the highest number of profit warnings in the second quarter were support services and software and computer services, each with seven warnings, and household goods and electronical and electrical equipment, both accounting for four warnings.