Profit warnings at highest since height of financial crisis
Profit warnings issued by listed businesses in the East Midlands in 2019 reached their highest level in over a decade, according to EY’s latest quarterly Profit Warnings report.
In the region, 20 profit warnings were recorded by EY last year, almost double the number in 2018 (11), and the highest level since 2008 – the peak of the financial crisis – when 23 warnings were issued.
The bulk of profit warnings issued in the East Midlands were issued in quarter two and quarter three, accounting for 75% of the region’s total annual warnings in 2019. The year ended on a brighter note, with the number of warnings issued falling to three in the final quarter of 2019, one fewer than the same quarter of 2018.
The sectors that were hit the hardest in the region throughout the year, issuing the most profit warnings, were: FTSE Retailers (6); Construction & Materials (5); and Industrial Support Services (4).
Dan Hurd, EY’s head of restructuring in the Midlands, said: “2019 was a challenging year, full of twists and turns that undoubtedly contributed to the number of profit warnings rising and falling throughout the year. A toxic combination of protracted uncertainty and rapid sector change left many companies facing an uphill struggle to meet their earnings forecasts in 2019. However, profit warnings tailed off at the end of the year, perhaps as businesses in the region adjusted their earnings, which will certainly stand them in good stead for 2020.”
UK quoted companies issued 313 profit warnings in 2019, rising by 9% year-on-year (287 in 2018) to reach the highest annual total of warnings since 2015.
