- General retailers
Retail warnings hit seven-year high
In Q3 2018, FTSE General Retailers issued eight profit warnings, the joint-highest third quarter since the financial crisis. In the first nine months of 2018, the sector has already surpassed 2017’s total number of profit warnings, with a third of FTSE General Retailers warning in the year-to-date. Retailers have contended with a year of weather extremes. But, come rain or shine, we anticipate one of the most demanding ‘golden’ quarters in many years.
A tough ‘golden’ quarter ahead for retailers
Half of the sector’s profit warnings in the third quarter cited this summer’s heatwave. But, the retail sector has more fundamental issues. Disposable incomes are finally rising, but consumer confidence is falling. Retail sales fell back in September and it may be hard to drive volumes between now and Black Friday. Jessica Clayton discusses profit warnings in the Retail sector.
- Travel & Leisure
Cruel summer for the travel sector
FTSE Travel & Leisure companies issued seven profit warnings in Q3 2018, the highest third-quarter total for two years. In the last 12 months, a quarter of the FTSE sector has warned. This sector covers companies as diverse as airlines, bars and online gambling. What ties them together is an intense fight for disposal income in often oversupplied and highly competitive markets, where margins are accordingly tight. It’s this kind of structural vulnerability that leaves companies open to profit warnings when market conditions change.
A cruel summer in travel, whilst headwinds hit gambling
The heatwave and rising oil prices have triggered profit warnings in the Travel & Tourism and Airlines sub-sectors, which contributed seven out of the 17 sector warnings issued in the first nine months of 2018. But, even before the summer, overcapacity was limiting airlines’ ability to drive up profitability. Jon Morris discusses the profit warnings in the Travel & Leisure sector.
UK&I Head of Restructuring
Partner, UK&I Restructuring
Partner, UK&I Restructuring
Market Analyst and Author
Alan leads our UK & Ireland Restructuring practice. He joined EY in 1985 and has more than 30 years’ experience working across the restructuring, accelerated M&A, advisory and insolvency arena in a number of industries advising stakeholders (boards, corporates, investors, lenders, trustees and regulators) on how best to protect, improve and recover value. Alan was an appointment taker in relation to, amongst others, Mid Staffordshire NHS Foundation Trust, Focus DIY, Dreams, Orchid Pub Group, Battersea Power Station, White Tower, Dunedin Industrious, DTZ plc, Navan Mining and Luminar nightclubs. He is a member of the editorial board of the Association of Business Recovery Professionals’ (R3) Recovery magazine and is a former member of R3’s Council. He has worked across a variety of geographies and sectors with a particular focus on Consumer Products & Retail, Health / Government & Public Sector, Real Estate, Construction, Support Services and Transportation.
Jon leads EY’s Cash and Working Capital team in the UK and across EMEIA, bringing liquidity solutions to both corporate and private equity clients. Since 1995 he has specialised in helping businesses transform cash forecasting and working capital performance and sustainably build liquidity against urgent deadlines. Jon has extensive experience working with some of the world’s largest businesses across many sectors, including Industrials, Consumer Products and Telecoms.
Lee is a restructuring specialist with over 20 years’ experience advising both lenders and corporates through multi-stakeholder restructuring situations in both public and leveraged finance markets. He has worked across a wide range of sectors, including Banking & Capital Markets, Oil & Gas, Power & Utilities, Consumer Products & Retail, and Telecoms. He has extensive experience helping formulate and implement financial restructuring programmes.
Kirsten is the lead author in our UK&I Transaction Advisory Services practice. She has more than 20 years’ experience of originating and presenting market analysis and insight in a wide variety of formats, from thought leadership to blogs. Kirsten is the lead editor of EY’s Capital Agenda Blog and the lead data analyst and author of EY’s Quarterly Analysis of Profit Warnings.