BRITISH firms issued 68 profit warnings between July and September, the worst third quarter since the peak of the financial crisis in 2008.
One of the wettest summers on record contributed to the struggles of listed companies but most of the blame lies with the “underlying weakness of the UK and global economy”, a report by Ernst & Young says today.
Twelve companies cited adverse weather in their profit warnings as the number of firms that were forced to restate their earnings expectations jumped by a third compared to last year.
The worst affected sector was support services, which includes facilities management, waste management, recruitment and consultancy. A slowdown here suggests that large firms may be revising their spending plans.
Manufacturing also suffered as industrial engineering and electronics firms also endured a torrid three months.
Unusually, just five firms blamed rising prices for their woes, although the report warns that even a slight increase in costs would affect many firms.
“While some profit warnings from consumer facing sectors blamed the poor weather, the underlying weakness of the UK economy and global growth concerns landed the heavier blows to profits and expectations,” said Ernst & Young’s Keith McGregor.
“In the UK, an exceptional series of one-off events has inevitably created dips in demand and productivity which has made it hard to get an accurate fix on the state of the economy.”