Latest quarterly figures show fall in North West profit warnings
The amount of profit warnings issued by listed companies in the North West has fallen in the third quarter of 2023.
New figures show that six profit warnings were issued during the period, down from eight the same time last year, according to EY-Parthenon’s latest Profit Warnings report.
Half of the warnings were from companies operating in industrial sectors. Similarly, industrial companies issued the second highest number of warnings across the UK (20), with only consumer discretionary companies (21) issuing more.
The number of profit warnings issued by listed companies based in the North West during Q3 2023 represented a quarter-on-quarter increase, with five warnings issued by companies in the region in Q2 2023.
However, the number of warnings issued over the first three quarters of 2023 in the North West (20) is 31% down on last year, when there were 29 warnings issued between Q1 and Q3.
Nationally, UK-listed companies issued 76 profit warnings between July and September 2023, marking the first time the quarterly total has fallen year-on-year since 2021.
Sam Woodward, EY-Parthenon UK&I Turnaround and Restructuring Partner in the North West, said: “Profit warnings from industrial FTSE sectors rose across the UK during Q3 2023, so it’s unsurprising to see that reflected in the North West, where companies in this sector are particularly prevalent.
“While it is positive to see the total number of warnings issued in the North West and nationally has fallen compared to this time last year, the levels for both remain higher than normal.
“Going forward, the lagged effect of high interest rates will likely have a significant bearing on how businesses perform, and consequently the level of warnings we expect to see going forward. Scenario planning and stress testing should, therefore, continue to be a priority for businesses in the North West amid a challenging economic backdrop.”
The report reveals that persistent inflation and rising interest rates continue to put significant pressure on UK businesses. A third (33%) of all the warnings in Q3 2023 cited tougher credit conditions as a factor – the highest level recorded by EY-Parthenon since 2008.
Broader economic uncertainty also played a role across many of this quarter’s warnings, with 21% citing delayed or cancelled contracts and 18% citing weaker consumer confidence. One-in-five (20%) of Q3 warnings cited the slowing housing market as a factor, while the same number (20%) referenced cost pressures.
In the past 12 months, 18% of UK-listed companies have issued a profit warning.
