North West bucks national trend with a sharp fall in profits warnings

There were just four profits warnings among firms in the region in the third quarter of this year compared to 10 in the first quarter and 11 in the second quarter, according to EY.

There has been a fall in profit warnings among quoted North West companies, says EY

 

Just four North West companies issued profit warnings in the third quarter of 2017, down from 10 in Q1 and 11 in Q2.

That’s half of the number of profit warnings issued in the same quarter last year, according to EY’s latest Profit Warnings report.

However, this is not consistent with the national trend. Across the UK, quoted companies issued 75 warnings in Q3 2017 – a 67% increase on the previous quarter (45) and significantly above the average levels of warnings (62) for a third quarter – taking the total for the year so far to 195.

The FTSE sectors issuing the most profit warnings in Q3 2017 were: Support Services (13), General Retailers (8), Software & Computer Services (5), and Travel & Leisure (5).

Sam Woodward, EY’s head of restructuring in the North West, said: “The low level of profit warnings in Q3 across the North West should not lead to complacency.

“For UK plc generally, summer brought more mixed fortunes, with the contrast between accelerating overseas markets and the slowing UK economy increasing. 

“Many businesses besieged by pricing pressures before Brexit are also now feeling the brunt of rising domestic uncertainty and rising costs.”

Sam Woodward, EY’s head of restructuring in the North West

 

Pricing and cost pressures feature in 25% of all profit warnings so far in 2017, compared with 18% in 2016.

According to the report, these pressures are especially apparent on consumer businesses.

In 2017, 39% of FTSE general retailers and 59% of FTSE travel & leisure warnings have cited rising costs or price pressures.

Keeping up in competitive and fast moving markets is compounding margin pressures, with 13% of warnings this quarter also citing unexpected investment costs.

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