UK companies see increase in profit warnings
In the first quarter of 2024, the number of profit warnings issued by UK listed companies fell 7% year-on-year to 70 and dropped slightly from the final quarter of 2023, when 77 warnings were issued.
Despite the quarterly fall in warnings, the number of companies warning for the first time in 12 months reached its highest level since the beginning of 2022, with 61% of companies in the first quarter of 2024 issuing a ‘new’ warning.
Contract cancellations and delays were cited as the main reason for warnings by 29% of companies, while higher costs and weaker consumer confidence each accounted for 17% of warnings.
Jo Robinson, EY-Parthenon partner and UK and Ireland turnaround and restructuring strategy leader, said: “Macro-economic pressures, while less intense, have not relented in 2024 and the full impact of interest rate increases is yet to be felt by many businesses. Larger companies and sectors such as luxury goods, which typically show resilience in economic downturns, are now starting to feel these pressures build.
“While the green shoots of recovery can be seen, companies cannot afford to ignore the warning signs and rely on economic resurgence, particularly as we continue to navigate through an unprecedented period of uncertainty with forthcoming global elections and geopolitical risks still high on the agenda.”

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