Profit warnings reach record high in wake of 11 September

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

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

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

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

& 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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