Latest Profit Warnings report from accountancy firm EY show that during April, May and June four companies issued warnings, a fall from 12 in the previous quarter. Tony McDonough reports
There was a significant fall in the number of North West quoted companies issuing profit warnings in the second quarter of 2018, new data shows.
The latest Profit Warnings report from accountancy firm EY show that during April, May and June four companies issued warnings, a fall from 12 in the previous quarter. It takes the total issued during the first half of 2018 to 16 – a 24% drop on the 21 warnings issued in the North West for the first half of last year.
However, across the whole of the UK, profit warnings rose substantially year-on-year to 58 in Q2 2018, with quoted companies issuing 13 (29%) more warnings than the same period in 2017.
The FTSE sectors with the highest number of warnings in Q2 2018 are: general retailers (7), software & computer services (6), and travel & leisure (5).
A further tough quarter for the UK’s high street means that almost a quarter of FTSE general retailers have now warned in 2018. The sector has issued 20 warnings in 2018 (13 in Q1 and 7 in Q2), double the figure in H1 2017 and a seven-year high.
Sam Woodward, EY’s restructuring partner for the North West, said: “Exceptional summer weather has boosted consumer spending – but growing downside risks at home and abroad look more enduring. At the same time the retail revolution continues, leaving more companies in its wake.
“Beyond the consumer sphere, profit warnings could rise if uncertainty delays decision making. The proportion of profit warnings citing delayed or cancelled contracts reached a six-year high in 2018.
“Many companies cannot say with any certainty what trading and regulatory regimes they’ll be operating under this time next year.
“At a local level, it’s heartening to see North West listed companies showing resilience in this second quarter and indeed the half year improvement on last year is marked. This partly reflects the spread of industries and sectors we have across this region.”