One in five UK-listed companies issued a profit warning in 2024

• Proportion of UK-listed businesses to issue a profit warning in 2024 is the third highest in a quarter of a century, behind only the 2020 pandemic (35%) and the impact of the dot-com bust and 9/11 in 2001 (23%)
• EY-Parthenon report reveals 274 profit warnings were issued by UK-listed companies during 2024
• Contract and order cancellations or delays were cited by a third (34%) of listed companies as a key driver behind warnings
• Industrial Support Services (37), Software and Computer Services (22) and Retail (20) were the FTSE sectors with the highest number of profit warnings last year

One in five (19%) UK-listed companies issued a profit warning in 2024, the third highest annual proportion in 25 years, behind only the 2020 pandemic (35%) and the impact of the dot-com bubble burst and 9/11 in 2001 (23%).

EY-Parthenon’s latest Profit Warnings report found that UK-listed companies issued 274 profit warnings last year – including 71 in Q4 – down slightly from the 294 issued during 2023. 

The leading factor behind profit warnings in 2024 was contract and order cancellations or delays, cited in 34% of warnings, including 39% in Q4 – the highest quarterly percentage for this reason in more than 15 years. Increasing costs triggered nearly one in five (18%) warnings in the last 12 months.  

Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader, said: “It’s clear that companies have faced an extraordinary succession of forecasting challenges since the pandemic, contending with interconnected disruptions to supply chains, material and energy costs, and the labour market, as well as higher interest rates. 2024 was also an exceptional year for global geopolitical uncertainty and policy upheaval, with a record level of profit warnings linked to contract and spending delays as businesses held back from recruitment and investment. As a result, companies’ forecasting strategies need to respond to both short-term policy changes and deeper structural issues. 

“Ordinarily, a sustained increase in company earnings pressures would be followed by a significant rise in insolvencies. But this cycle has been different. The availability of cheap, long-term debt and pandemic support provided breathing space for both businesses and stakeholders to explore consensual solutions and new restructuring options. However, more companies are now reaching a tipping point as cumulative pressures build. We don’t expect a huge uptick in insolvency levels in 2025, but we are now seeing more distress, and more stakeholders viewing insolvency processes as a real option in finding the best path forward. 

“While the pace of profit warnings has eased slightly in early 2025, we’ve seen the recruitment sector continue to grapple with a downturn in activity across key geographies and sectors, before the increases in employer National Insurance Contributions and the National Living Wage take effect. Across the board, the road ahead remains rocky with challenges around trade, geopolitics, interest rates, and more.” 

Industrials and retail see high number of warnings 

The FTSE sectors with the highest number of profit warnings in 2024 were Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – with 37 warnings issued, and Software and Computer Services, with 22. 

FTSE Retailers issued 20 profit warnings in 2024, including seven in Q4, a small decrease from the 24 issued in 2023. However, the proportion of listed companies in the retail sector to warn only fell very slightly, to 38% from 39% in 2023. Three-quarters (75%) of FTSE Personal Goods companies (10 warnings issued) and over half (52%) of FTSE Household Goods and Home Construction companies (19 warnings issued) also warned in 2024, underlining the ongoing pressure on discretionary spending. 

Along with FTSE Household Goods and Home Construction, a high number of 2024 warnings were also seen across FTSE Technology Hardware and Equipment (18), with technology companies registering one of the highest levels of warning in 25 years of EY’s analysis. 

Silvia Rindone, EY Partner and UK&I Retail Lead, added: "Profit warnings in the retail sector remained prevalent in 2024. Whilst festive trading reports were broadly positive, they highlight that demand is only part of the story. Higher employment costs and the investment needed to adapt to changing consumer behaviour will challenge every retailer during 2025. 

“It’s clear that shoppers are willing to spend if the price is right and the proposition is strong. However, retailers’ uncertainty over how much rising costs can be offset through automation and efficiency savings, or passed on in price increases, is making them almost universally cautious about the year ahead.”