Rise in number of profit warnings across North East
Listed companies in Yorkshire and North East issued 37 profit warnings in 2018, up by almost a third on the previous year, according to EY’s latest Profit Warnings report.
It comes on the back of a fourth quarter that saw ten companies in the region issue profit warnings, an increase on the previous quarter and on the same period last year.
Nationally, one in six quoted companies issued profit warnings in 2018, the second highest level since 2008. In 2018, UK quoted companies issued 287 profit warnings, a rise of four per cent year-on-year.
Hunter Kelly, EY’s head of restructuring for Yorkshire and the North East, said a number of factors were affecting business: “It is particularly significant that we have seen more ‘new’ companies warning in 2018. It demonstrates that there are more wide-reaching pressures and that the rising uncertainty on confidence and demand is having an impact.
“The average fall in share price indicates that investors, like many businesses, are positioning for the worst.
“Recent events have created further uncertainty and with no obvious end in sight for some of them there is no let-up in the factors that could derail a business plan.
“Rising uncertainty wasn’t the only reason why profit warnings spread in 2018. The weather and regulatory issues were to the fore, such as the changes to diesel regulation in the automotive sector and increasing gaming regulation.
“China’s slowdown also particularly hit automotive and technology sales.
“But rising uncertainty has exacerbated these.”