Farm virus triggers profit warnings

30 July 2001



Farm virus triggers profit warnings

By Alistair Driver

FOOT-AND-MOUTH disease forced seven companies to issue profit warnings in the second quarter of this year, a survey reveals.

The impact of the crisis on tourism is illustrated by the fact that five of them operate in the tourist sector.

Two un-named businesses operating in the food sector were forced to warn shareholders about the damage the epidemic will do to their bottom line.

But the latest quarterly analysis of profit warnings by accountants Ernst and Young does, however, show an improvement on the first quarter.

Eleven foot-and-mouth-related profit warnings were issued between the end of February when the outbreak started and the end of March.

The picture remains bleak for the tourist industry, the report warns.

It says all five tourist companies affected believe the epidemic continue to have a negative impact on tourism, especially numbers of overseas visitors.

“A key question will be how foot-and-mouth has affected overseas tourism, especially from the USA. At the time industry sources are pessimistic.”

Among the companies issuing warnings in the second quarter was car rental company Avis, which suffered from the lack of visitors to the UK.

The report points out that the Confederation of British Industry is predicting more job losses.

A University of Exeter study conducted in June estimated the eventual loss of 450 million and 40,000 jobs in south-west England alone.

Similar predictions have been made for Scotland and the north-west of England.

But the situation could have been worse.

Early predictions of meltdown in the tourist industry appear to have been avoided thanks to the decline of the outbreak during the second quarter.