Regional profit warnings highest since 2009
The first three months of 2013 saw nine profit warnings, the worst reading since the first quarter of 2009, when 19 were issued.
At the same time, the UK as a whole reported a 16 per cent fall in profit warnings, highlighting a worrying North-South divide.
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Hide AdErnst & Young, the Big Four accountancy firm which compiled the research, said the last quarter’s showing for Yorkshire and the North East was more than double the previous period and up 29 per cent on the same period in 2012.
Hunter Kelly, restructuring partner, said: “The support services sector is feeling the effects of cut backs from cancelled or delayed contracts and cash-strapped governments.
“Falling growth expectations at home and in growth markets continue to create issues for industrial companies.”
Sectors to issue warnings in the region included support services with five, industrial engineering with two and one apiece for software and computer services and alternative energy.
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Hide AdAcross the UK, 72 warnings were issued by UK quoted companies, 14 fewer than the previous quarter and one less than the same quarter of 2012.
Ernst & Young claims that some parts of the economy look set for recovery.
It points out that housebuilders have not issued a profit warning since late 2009, which it attributes to a slowly expanding mortgage market and the new Funding for Lending scheme. This trend is expected to continue and benefit the housing market and home construction in particular, said Ernst & Young.
The retail sector is still heavily polarised with weak companies struggling against structural changes and low sales. Despite obvious distress shown by some retailers, Christmas met most expectations with just five general retailers warning in the first quarter, the same as the first three months of 2012.
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Hide AdThe tough environment of the last few years has also created leaner operators that are more able to withstand the anticipated economic fluctuations.
Mr Kelly said: “Of course, there are exceptions in any sector and one off incidents and structural changes will continue to catch out companies.”