HARD COMMERCIAL EDGE OF PR 1997: Clients warned against needless profit warnings

Clients are coming under increasing pressure from corporate brokers to issue unnecessary profit warnings, putting their share price at risk, according to Chris Birks, director of investor relations specialist Frew Macmaster.

Clients are coming under increasing pressure from corporate brokers

to issue unnecessary profit warnings, putting their share price at risk,

according to Chris Birks, director of investor relations specialist Frew

Macmaster.



With the market trading at a high, Birks warned companies against caving

into pressure from corporate brokers, keen to protect their own

reputations, by routinely issuing profit warnings when a shortfall is

expected to be less than 10 per cent. Where permitted by City

restrictions, companies should use more informal briefings to update

analysts.



’A profit warning will hit the share price harder than downgrading

earnings for the period because it raises question about a company’s

strategy and management credibility,’ said Birks.



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