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Warnings on profit show new sensitivity to investorsA SPATE of profit warnings over the past two months, far more than the market is used to, shows that SA management is at long last becoming more sensitive to the needs of investors. On Wednesday, personnel services group Technihire became the latest company to issue a warning, saying it could incur losses because debtors may not be able to repay money in full or within a reasonable period of time. Other companies that have recently cautioned shareholders include Sentrachem, Samancor, Afcol, Toco Holdings and IBM. The underlying reasons vary, but analysts say the trend points to improved disclosure by SA companies. One says: "With increased international participation in our market, SA companies are catching up with what happens in other parts of the world and are bringing their corporate relations in line with global standards. "SA investors put up with poor disclosure in the past, but international investors will just abandon the market if they get burnt." Some warnings highlight how difficult market conditions are for some companies. Afcol, which publishes its results on Thursday, recently told shareholders that earnings in the year to March would be well below expectations due to a sharp deterioration in demand for furniture in the fourth quarter. Samancor's cautionary that second half operating profits will slump appears to be tied to tough commodity cycles while market talk is that those from Toco and IBM could relate in part to clean sweeps being made by new management teams.
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