Profit warnings focus on sectors Q1 2021: FTSE Aerospace and Defense

4 May 2021
Dan Hurd
By Dan Hurd

EY-Parthenon Partner, Turnaround and Restructuring Strategy, Ernst & Young LLP

Experienced restructuring leader focused on getting the best outcome from difficult situations. Shares a passion with his family and friends for travelling, the outdoors and most forms of great music.

Contributors

Alan Hudson,

 

Jon Morris,

 

Kirsten Tompkins,

 

Lisa Ashe,

 

Taylor Dewar

4 May 2021
Related topics Strategy and Transactions
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An unprecedented challenge

Since the start of 2020, FTSE Aerospace and Defense companies have issued 16 profit warnings – more than the previous four years combined. This exceptional number reflects the impact of COVID-19 on the civil aviation sector, but ongoing structural challenges mean that the sector’s problems won’t end when travel restrictions are lifted. 

ey infographics for ftse aerospace and defense

Supplier concerns grow

Customers and investors have increased concern about the civil aerospace supplier base in the wake of complex and growing challenges. Demand will come back, but in different areas as airlines increase their focus on narrow-bodied, fuel efficient aircraft.

Working capital requirements will increase as markets recover, requiring cash and supportive lenders. Moreover, whilst governments have sustained defence spending during the pandemic, budget pressures may change priorities in the medium term. In terms of supplier risk, companies often supply both civil and defence markets, with pressure on one side enough to threaten financial stability, especially in smaller suppliers.

Register to download our Profit Warnings Q1 2021 report

Summary

Every quarter, we provide the latest sector insights from our Profit Warnings analysis, delving deep into two specific sectors and the challenges facing companies and stakeholders alike.  

For Q1 2021, we look at the FTSE Aerospace and Defense sector as well as the FTSE Travel and Leisure sector, analysing the headwinds facing both.

About this article

Dan Hurd
By Dan Hurd

EY-Parthenon Partner, Turnaround and Restructuring Strategy, Ernst & Young LLP

Experienced restructuring leader focused on getting the best outcome from difficult situations. Shares a passion with his family and friends for travelling, the outdoors and most forms of great music.

Contributors

Alan Hudson,

 

Jon Morris,

 

Kirsten Tompkins,

 

Lisa Ashe,

 

Taylor Dewar

Related topics Strategy and Transactions
Upvote
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