There are some interesting findings in this Bloomberg article following a 20-year study by Ernst & Young. The study, which covers the period including the bursting of the dot-com bubble and the 2008 global financial crisis, suggests that nearly a fifth of UK companies will face a restructuring event within a year of issuing a third profit warning.
A run of three profit warnings is frequently followed by boardroom firings and the arrival of administrators at U.K. firms, according to a 20-year study by EY. Within a year of issuing three or more profit warnings, 18% of U.K. companies will face a restructuring event such as insolvency proceedings, EY said. It also found that by the morning of a third warning, a quarter of chief executive officers have left the firm. “The third profit warning is very often a bruising or even a knock-out blow,” the consultancy said in the analysis that’s based on a study of 6,000 warnings by 2,000 companies since 1999.