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.

Q3 2020 Headlines

UK quoted companies issued 58 profit warnings in Q3 2020. This is an average third quarter total, but it comes in the context of an extraordinary year. A year in which EY Parthenon has recorded the highest level of profit warnings in over two decades of its analysis.

Record-breaking levels of profit warnings in the first half of 2020 dealt a huge blow to earnings expectations. Against this lowered bar – and in a period of relative stability – more companies met, or even exceeded profit forecasts this summer.

But UK Plc isn’t out of the woods. Over a third of companies have materially lowered their profit forecasts at least once in 2020. And these weakened companies now face an exceptionally difficult autumn and winter, with further challenges from COVID-19, Brexit and the easing of government support to come.

Many companies are surviving, but do they have the agility to ride out protracted uncertainty and the capital to transform and thrive in a reshaped economy? The answer in many cases is no, unless they take radical action to reshape their business.

In Q3 2020

58

profit warnings were issued by UK companies

In the first 9 months of 2020

75%

of FTSE Travel & Leisure companies have issued a profit warning

In Q3 2020

24%

of profit warnings blamed increasing costs and overheads

In the first 9 months of 2020

34%

of UK quoted companies have issued a profit warning

Download our Profit Warnings Q3 2020 Report

Sector insights

Profit warnings focus on sectors Q3 2020: FTSE Construction and Materials

FTSE Construction and Materials companies have issued 28 profit warnings in 2020, with 57% of companies warning the first nine months of 2020.

30 Oct 2020 Alan Hudson

Profit warnings focus on sectors Q3 2020: FTSE Travel and Leisure

FTSE Travel & Leisure companies have issued 63 profit warnings in the first nine months of 2020, almost three times the number issued in 2019.

24 Oct 2020 Meg Wilson

What can 20 years of profit warning data tell us?

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