Poor sales and difficult trading conditions saw profits warnings increase 23 per cent last year as consumer confidence fell, according to research from Ernst & Young, the accountant.
A study found that there were 381 profits warnings last year — the highest number since 2001 — compared with 294 the year before, with retailers in particular suffering from rising levels of debt and the slowdown in the housing market.
In the fourth quarter of last year, sales short of forecasts were blamed for 45 per cent of the profits warnings, while 42 per cent of companies cited difficult market conditions.
Overheads were also of concern, with 12 companies blaming rising energy costs.
Andrew Wollaston, a partner at Ernst & Young, said: “While there appears to be the beginnings of a recovery in the housing market and more positive news of Christmas trading from retailers, it is clear that companies are still finding it difficult to forecast in the current benign economic climate.”