East Midlands profit warnings soar by 55%
The number of profit warnings issued by listed East Midlands companies increased by 55% in 2020, according to data from the latest EY Profit Warnings Report.
In total, 31 profit warnings were issued by the region’s listed businesses in 2020, compared to 20 in 2019.
The highest number of profit warnings from East Midlands’ listed companies were in the following FTSE sectors: retail (15); construction and materials (5) and industrial support services (4). The majority of profit warnings from East Midlands listed companies (81%) were attributed to COVID-19.
Dan Hurd, EY-Parthenon partner in UK&I turnaround and restructuring strategy in the Midlands, said: “The East Midlands mirrored the UK picture, with listed businesses operating in the retail sector facing considerable and continued challenges throughout 2020. It’s therefore not surprising this sector accounted for the highest proportion of profit warnings in the East Midlands.
“Similarly, businesses in the FTSE Construction and Materials sector needed to modify their operations to operate within COVID-19 guidelines. With several high-profile infrastructure projects in the Midlands continuing, alongside the government’s levelling up agenda, there is now greater confidence emerging from the sector.
“Many UK businesses have been treading on thin ice for months with government support propping them up. While there is speculation these measures could be extended until the summer, the countdown has started, and in the coming weeks or months we’ll find out how many of these companies can keep their head above water.”
A total of 583 profit warnings were issued by UK listed companies in 2020, this is the highest annual total in 21 years of the EY research – 15% higher than the previous record of 506 in 2001. This historic high contrasts with very low levels of corporate insolvency.
