Private Companies’ Contracts

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Bim Afolami: Does my hon. Friend agree that it would be irresponsible of this Government to cancel private companies’ contracts simply on the basis of a single profit update?

Oliver Dowden: I thank my hon. Friend for that question, and this is an important point about profit warnings. A profit warning does not mean that a company is imminently going to collapse. A profit warning is a warning to the markets that its results will not be in line with what it had previously thought. If every time that a company issued a profit warning, we as a Government said that we would cease to contract with them, there would be very few companies we could contract with. I will not name leading companies, because I do not want to influence their market value, but I could name a huge list of FTSE 100 companies that routinely issue profit warnings. That does not mean that they are about to disappear.

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