Since the start of 2020, 54 UK companies have issued profit warnings citing a potential hit to their results from coronavirus pandemic, according to analysis released today.
Accountancy firm EY said there had been 25 profit warnings related to the coronavirus this week up until 5pm yesterday.
Eighty-seven per cent of all profit warnings issued by UK listed companies in the last three weeks cited coronavirus.
More than 40 per cent (23) of the total number of Covid-19 related profit warnings issued in the UK in 2020 so far, have come from companies in the travel and leisure sector.
Airlines, tour operators, pubs, hotels, restaurants and cinemas are amongst those most affected by travel and social restrictions, which have also had a knock-on effect on betting and gaming companies due to the cancellation of sporting events, EY said.
Cineworld warned it may not survive the crisis, while airlines such as Virgin and British Airways-owned IAG have warned of the impact of coronavirus on their businesses.
Companies such as retailer WH Smith, training provider Mind Gym, aviation services company John Menzies and plumbing group Ferguson have all warned on profits, blaming coronavirus.
EY said it recorded an “exceptionally high” level of profit warnings in 2019 (313) – equal to 2008 levels at the height of the financial crisis.
This year had begun in the same way, before the added pressure of coronavirus which has created “an unparalleled challenge for UK plc,” EY said.
EY restructuring partner Mona Bitar said: “Covid-19 has generated an exceptional list of challenges in supply, demand, operations, planning and liquidity, alongside high levels of uncertainty and an ongoing backdrop of existing volatility and weak demand.
“In this rapidly moving environment, companies should be focused on four actions: putting peoples’ safety first; focusing on business continuity; building and securing liquidity; and engaging stakeholders.”