Some large high street retailers have issued profit warnings, according to a report by the Guardian today.
The news comes despite earlier reports of a three-year low in companies issuing warnings, as large high street brands such as Debenhams and Morrisons have cut their forecasts after a ‘worse-than-expected Christmas.’
Among the worst hit are Mothercare, BG Group, Mulberry and Rolls-Royce, with the Royal Bank of Scotland unveiling on 27 January an extra £2.9bn of costs to cover alleged bad conduct such as mis-selling of payment protection insurance and interest rate swaps.
Serco warned this year’s profits will be 10% to 20% lower than expected due to the ‘continued impact of its overcharging of the government’, the Guardian report said.
Hornby also issued warnings with a predicted annual loss of £1m. The model railway maker reportedly blamed recurring delays at its manufacturer in China, as well as the falling value of foreign currency set aside to pay for the trains.
The Guardian report said:
“Tate and Lyle issued a shock trading update on 13 February saying falling fizzy drink sales and price pressure from a market glut of Chinese sucralose would leave profits flat this year. Sucralose counts for a fifth of Tate & Lyle’s speciality food business.”
The new forecasts have sent shares into a sharp decline and there are fears this could effect the speed of the economic recovery.