Analysis of UK Profit Warnings

In Strategy and Transactions

We have tracked profit warnings from UK registered companies listed on the UK’s Main Market or AIM for 20 years, giving us powerful insight into business, capital and the UK economy. 

What is a profit warning?

A profit warning is an official statement to the stock exchange from a publicly listed company that says that it will report full-year profits materially below management or market expectations.

Our analysis:

Our analysis provides you with insights into profit warning trends and key economic, sector and market issues facing UK businesses. You can delve into the latest quarter’s findings, access twelve years’ worth of data at the click of a button using our console or understand the trends of the past 20 years to identify the forces affecting your market and shape your path ahead.

Q4 2020 Headlines

UK quoted companies issued 583 profit warnings in 2020. Over a third of companies materially downgraded their profit forecasts, the highest in over two decades of EY analysis.

It was a profit warning year of two-halves. COVID-19 dealt a huge blow to earnings expectations in the first half of 2020, triggering record levels of warnings. By the second half, expectations adjusted, demand recovered, and profit warnings fell below average – even as COVID-19 restrictions increased in the final quarter.

But 2020 has left many companies bruised, existing on life support, and vulnerable to further shocks and withdrawal of government support. We start 2021 with new hopes, but also renewed challenges. Vaccines will eventually open the economy, but the UK will spend most of the first quarter in lockdown. A Brexit deal supplies certainty, but also new trade frictions.

Businesses that lack capital to restart and transform will struggle to thrive in a reshaped economy. The recovery is coming, but we expect many more businesses to fail in 2021. 

UK companies issued

583

profit warnings in 2020, more than double the 10-year average

In 2020, a record

35%

of UK quoted companies issued a profit warning

In 2020,

4 in 5

FTSE Travel & Leisure companies issued a profit warning

COVID-19 triggered

86%

of profit warnings in 2020

Download our Profit Warnings Q4 2020 Report

Sector insights

Profit warnings focus on sectors Q4 2020: FTSE Retailers

FTSE Retailers companies issued 53 profit warnings in 2020, a record number and 66% more than 2019

1 Feb 2021 Mona Bitar

Profit warnings focus on sectors Q4 2020: FTSE Real Estate

FTSE Real Estate companies issued 30 profit warnings in 2020, a record number and up five-fold on 2019

1 Feb 2021 Fraser Greenshields

What can 20 years of profit warning data tell us?

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