Home > SME News > Small firms issue profits warning

Small firms issue profits warning

Published On 15 January 2007 at 17:30:25

An increasingly large percentage of profit warnings are being received from small businesses, it has emerged.

According to figures from Ernst & Young (E&Y), 75 per cent of the London Stock Exchange firms that issued profit warnings in the last year had a turnover of under £200 million.

This is down from a 70 per cent figure in 2005 and a 67 per cent mark in 2004.

Members of the junior stock market, AIM, accounted for over half of the warnings.

Andrew Wollaston. a corporate restructuring partner at the firm, said: "The high incidence of profit warnings from AIM companies, especially in their first year of flotation, has placed increased scrutiny on the junior market.

"With AIM becoming increasingly popular, there will be more competition for investment and therefore a greater need for companies to adopt better forecasting and investor relations."

However, the overall number of firms that issued warnings last year was down from 381 in 2005 to 342, although the firm puts this down to the easier economic conditions experienced in 2006.

 

Related SME News:

• Postal strike 'would hit SMEs hard'
  7 June 2007 at 16:23:50
  Any strike by Royal Mail staff could be disastrous for small and medium-sized enterprises in the UK, a business group has warned.
• SMEs 'encouraged to focus on emerging markets'
  7 June 2007 at 08:56:14
  Business groups have welcomed the findings of the Trade & Industry Select Committee's report on UK trade and investment (UKTI).
• Government acts to protect SME workers
  6 June 2007 at 09:00:30
  The government has launched a pilot scheme to try and crack down on the bosses of small and medium-sized enterprises (SMEs) who treat their staff poorly.
• Bosses 'can say no' to flexible work requests
  30 May 2007 at 16:12:02
  The bosses at the UK's small and medium-sized enterprises should not be afraid to refuse their staff's requests for more flexible working arrangements if they believe they will harm business.
• Manchester SMEs 'oppose road pricing'
  30 May 2007 at 08:51:09
  The vast majority of small business owners in the Manchester area are opposed to the proposed road pricing scheme which could be introduced in the city.
• Paternity rules 'will harm SMEs'
  29 May 2007 at 14:36:30
  New paternity regulation will harm the productivity of the UK's small and medium-sized enterprises (SMEs), a leading industry group has warned.
• Workers 'want to quit if they can't progress'
  25 May 2007 at 09:02:52
  The bosses of the nation's small and medium-sized enterprises need to do more to make sure their staff benefit from day-to-day training opportunities, industry experts have claimed.