Analysis of UK Profit Warnings

In Strategy and Transactions

We have tracked profit warnings from UK-registered companies for over 20 years, giving us powerful insight into business, capital, and the 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 of UK-registered companies listed on the the UK’s Main Market or AIM 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 and access over 14 years’ worth of data at the click of a button using our console. Use our profit warning data to understand trends and identify the forces affecting your market and reshaping your path ahead.

Q3 2021 Headlines

Economic recoveries are rarely predictable, but this one has more than its share of twists. After months of exceptionally low levels, profit warnings moved above average levels in September 2021, as supply chain and labour market stresses cascaded through the economy.

The burning question now is how much of this pressure is temporary, how much is due to structural change, and what is yet to come. For the last 18 months, government support has cushioned much of the impact of the pandemic, the UK’s EU-Exit, and other relentless forces of change, such as digitisation and the transition to Net Zero. We expect to see more profit warnings and restructuring now that government support is ending and companies will feel the full impact of this economic reshaping.

Companies need to think about how they will adapt to these changes and contribute to building a sustainable recovery. The trade-off between value and values is fast diminishing as attitudes and behaviours change and Environmental, Social, and Governance [ESG] measurements move into the mainstream capital markets. Companies need to demonstrate their commitment to building long-term value for all their stakeholders.

UK companies issued

51

profit warnings in Q3 2021

In Q3 2021,

43%

of profit warnings cited rising costs or supply chain issues

In Q3 2021,

70%

Companies issued a profit warning for the first time in 12 months

In Q3 2021, the average share price fall was

13.6%

on the day of warning, the highest since Q4 2019

Download our Profit Warnings Q3 2021 report

Sector insights

Profit Warnings focus on sectors Q3 2021: FTSE Retailers

FTSE Retailers have issued 14 profit warnings so far in 2021, the lowest number at the end of a third quarter since 2015.

18 Oct 2021 Silvia Rindone

Profit Warnings focus on sectors Q3 2021: Energy

A huge ramp up in post-pandemic demand and supply disruptions have pushed gas prices to record levels.

18 Oct 2021 Rob Doepel

What can 20 years of profit warning data tell us?

Find out more

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