British companies have issued more than 100 profit warnings for the second consecutive quarter, according to figures from Ernst & Young, with retail the hardest hit.
According to research by the accountancy firm yesterday, UK PLCs have seen “no respite” in the first quarter of 2008. Profit warnings reached 114, the highest figure since 2001 and an 11 per cent increase on the first quarter in 2007.

General retail was the hardest-hit sector, with 18 high street names cutting their profit forecasts, including Moss Bros, Blacks and Land of Leather.

According to Ernst & Young, retail profit warnings usually peak during the first quarter, after Christmas and January Sales, but it said it was clear that this year “the sector is in more distress” than last year.
In the year to the end of March 2007, 26 per cent of the sector issued a warning, compared with 42 per cent of FTSE general retailers that did so in the year to date ending March 2008.

Ernst & Young likened the financial situation to that of the end of the dot-com boom in 2001 and warned that worse could be yet to come as the general credit crunch and downturn in consumer demand, particularly for big ticket purchases, continue to take effect.

“There have already been ten notable retail administrations in this quarter and the outlook looks bleak for the second quarter and beyond. The early Easter and far chillier Spring than we enjoyed in 2007 will hit like-for-like figures,” said the report.