Profit warnings reach record high in wake of 11 September

More
UK companies issued profit warnings than ever before in the aftermath of 11
September.

A
total of 520 profit warnings were made last year, a 177 per cent increase on
the previous year and the highest since records began.

According
to Ernst & Young, the warnings reached a high during October with 40 per
cent of firms blaming the 11 September attacks or its knock-on effect on other
industries.

The
bulk of warnings came from software and computer services companies although
profit warnings from engineering, manufacturing, household goods and textile
firms also increased.

Ernst
& Young said the market is now reacting more sympathetically, with share
prices falling at an average rate of 14 per cent following a warning, compared
to around 25 per cent in the past.

By Ross Wigham

 

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