Latest EY’s latest Profit Warnings report reveals North West listed companies in the retail and leisure sectors have been hardest hit by the coronavirus crisis. Tony McDonough reports

New figures show how the COVID-19 crisis has hit listed companies in the North West with profit warnings up 150% in the first half of 2020.

EY’s latest Profit Warnings report reveals there were 40 profit warnings in the region in from January to the end of June  – higher than any previous first half in the last 20 years. The number compares to just 16 in the same period in 2019.

After a record-breaking first quarter in 2020, when quoted companies in the North West issued 27 warnings, 13 were recorded in the second quarter, with 83% citing the impact of the COVID-19 pandemic. Warnings were spread across a wide range of sectors with businesses operating in the FTSE retailers (7) and travel and leisure (4) sectors most affected.

Sam Woodward, EY strategy and transactions partner in the North West, said: “Unsurprisingly, the most immediate and dramatic impact of COVID-19 has been acutely felt by companies whose existing structural challenges have been exacerbated by the pandemic.

“However, many businesses that were essentially sound before the virus struck, have also been forced to fundamentally reassess their expectations and business plans too. It’s vital that North West businesses don’t underestimate the depth and extent of both the immediate and long-term challenges ahead.

“It is still a highly uncertain time for businesses, who are adjusting to new ways of working and changing levels of demand, with potential cliff-edges to come in government support and further twists and turns likely in Brexit negotiations. The UK economy is opening up, but it’s early days.”

Across the UK, almost a third (33%) of listed companies – compared to 18% in 2019 – issued a profit warning in the first half of 2020. EY recorded 466 profit warnings in H1 2020 – more than the total number issued last year (313).