According to EY’s latest Profit Warnings Report, it was another tough year for quoted companies in the West Midlands, with 18 profit warnings issued in total in 2018 – the highest since 2014.
The West Midlands saw the number of profit warnings triple in the fourth quarter of 2018, with nine listed businesses issuing warnings between October and December, compared with three in the previous quarter.
Last year, the Electronic and Electrical Equipment sector (6) recorded the highest number of warnings in the West Midlands. Other sectors included: General Retailers; Industrial Engineering; Support Services; Travel & Leisure; Technology Hardware and Equipment; Real Estate Investment and Services; and Personal Goods.
Across the UK, 2018 saw the second highest level of profit warnings issued by UK plc since 2008, with 287 profit warnings, a rise of 4% year-on-year. The General Retailers sector across the UK recorded the highest percentage of profit warnings in a decade, with 38% of the sector issuing profit warnings in 2018.
Dan Hurd, EY’s Head of Restructuring in the Midlands, comments: “Following events last week, there is a further political and economic uncertainty to contend with and no let-up in the pace of change. But rising uncertainty wasn’t the only reason why profit warnings spread in 2018.
“In the retail sector, a combination of a relentless margin squeeze, the continuous need for reinvention and falling consumer confidence made 2018 an exceptionally tough year for the retail sector across the whole of the UK.
“What happens next depends on how much more unpredictable 2019 becomes. Markets adjust quickly to new realities, however, in this fast-moving world companies need to keep moving forward or risk finding themselves on the wrong side of sector trends, potentially triggering a new cycle of profit warnings in years to come.”