A leading accountancy firm has warned of “a long hot summer” for many media companies following an increase in profit warnings.
According to Ernst & Young, the number of profit warnings issued by media companies increased from four in the first quarter of this year to nine in the second quarter.
It also revealed that the media sector was third from top in its profit warnings league table.
Guy Di Piazza, media and entertainment director at Ernst & Young, said: “There is no distinctive pattern to the spate of warnings. The issues that have arisen are mostly company specific.
“Although the slowing advertising market is an easy target to blame, this is not the case in the majority of these particular results. This is because the slowdown in the advertising market hasn’t yet worked its way into the numbers. Any such impact is likely to be felt in the next quarter’s results.
“Given this year’s announcements on advertising spending – there has been a slowdown on advertising spending on traditional media – it is likely to be a long, hot summer for those media companies heavily reliant on advertising revenues. The more defensive, subscription-based, media companies are likely to continue to out-perform their peer group”.
Picture: 1 Canada Square which houses UK media giants Trinity Mirror and Telegraph Group.