Stable number of profit warnings mask major economic changes

 
Alys Key
Follow Alys
A red flag reading 'No Swimming' flies a
It's sink or swim for some travel firms as costs and uncertainty are on the rise (Source: Getty)

Publically listed companies in the UK issued 75 profit warnings in the first quarter of this year.

The number remained relatively flat, with just two more warnings than the previous quarter, and retail warnings hit a record low.

But a report from EY says this stability masks major changes in line with the shifting UK economy.

The proportion of companies citing rising costs in warnings nearly doubled to 28 per cent, up from 15 per cent last year.

Uncertainty hit a fiver-year high, with 28 per cent of firms referring to contract delays or cancellations.

Support services, travel and nonlife insurance were the three sectors which issued the most warnings in the quarter.

Alan Hudson, EY’s head of restructuring for UK & Ireland, commented: “Increased overheads, political and regulatory change, and digital disruption are piling pressure on sectors with long-standing structural issues, especially in consumer and business services.”

Related articles