UK Software Sector Remains Steady

By Sara Driscoll  |  Print this article Print


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The UK software sector has stabalized, but it has been warned against reliance on the United States.

Software companies in the UK have been warned to exercise caution if they have a high exposure to the United States and the dollar rate.

The UK software sector has stabilized for the third quarter 2007, according to research from Ernst & Young. Profit warnings in the sector remained at the same level as the second quarter, however the research revealed that more than a quarter of the companies within the sector have issued a profit warning in the last 12 months.

John Hughman, senior technology analyst at Ernst & Young, said in a statement that some companies have invested heavily, expecting growth which has not materialized. "It could be an indication that the business outlook has soured somewhat in recent months. Companies should be exercising prudence in the current climate, particularly those with higher exposure to the U.S. and the dollar."

In the past twelve months, there have been 62 profit warnings from 47 different companies, representing 28 percent of the FTSE Software and Computer Services sector. Compared to the same time last year, quarter-on-quarter figures show a 50 percent increase in warnings issued in the sector.

"We'll always see a high proportion of warnings from software companies as they represent a large proportion of the overall index, and are generally smaller players with more concentrated exposure to order delays. The UK's leading software and service companies continue to perform well," Hughman said.

Sara Driscoll began her journalism career at 16 years old on her local newspaper, The Watford Observer. Working part time, she covered a range of beats. Leaving to complete her Journalism Degree at Bournemouth University, UK, Sara then went on to graduate and work for Emap. She began as a reporter on APR, Emap's construction title, being promoted to senior reporter with a year.Sara then joined VNU Business Publications as Deputy News Editor on CRN, the weekly trade title for channel players. She covered industry/business news from vendors, distributors and resellers, product announcements, partner announcements as well as market and trend analysis, research and in depth articles to predict up and coming trends in the sector. She was promoted within a year to News Editor, a year later to Deputy Editor and the following year became Editor. Sara remained editor of CRN for three years, launching the magazine on new platforms including CRN TV and eBooks, as well as several magazine and web site redesigns. She was called on for expert industry comment from various publications including appearing on live BBC news programs. Sara joined Ziff Davis Enterprise as Editor of eWeek Channel Insider. She runs the title in all formats – online up to the minute news, newsletters, emails alerts and events. She also manages the brand of Channel Insider in all formats - events, shows, awards, panel debates and roundtables.Sara can be reached at:sara.driscoll@ziffdavisenterprise.com

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