UK-listed companies in the North West issued more profit warnings last year than in 2023 due to a challenging second half of the year, says EY-Parthenon.
According to its latest Profit Warnings report, listed companies in the region issued a total of 29 profit warnings during 2024, up marginally from the 27 warnings issued in 2023.
The increase came despite a resilient first half of 2024, which saw warnings from North West companies fall by 21% year-on-year compared to the opening six months of 2023.
North West companies operating in the Industrials FTSE super-sector issued the most warnings last year with a total of seven, similar to the national trend. Meanwhile, companies in the region operating in the consumer discretionary and technology FTSE super-sectors issued a total of five warnings each.
Nationally, one in five (19%) UK-listed companies issued a profit warning in 2024, the third highest annual proportion in 25 years, behind only the 2020 pandemic (35%) and the impact of the dot-com bubble burst and 9/11 in 2001 (23%).
EY-Parthenon’s report found that UK-listed companies issued 274 profit warnings last year – including 71 in Q4 – down slightly from the 294 issued during 2023.
The leading factor behind profit warnings in 2024 was contract and order cancellations or delays, cited in 34% of warnings, including 39% in Q4 – the highest quarterly percentage for this reason in more than 15 years. Increasing costs triggered nearly one in five (18%) warnings in the last 12 months.
Sam Woodward (pictured), EY-Parthenon UK&I turnaround and restructuring partner in the North West, said: “After an encouraging and resilient start to 2024, the second half of the year was a more difficult period for companies in the North West, with economic challenges including sticky inflation, high interest rates and geopolitical tensions beginning to have a more significant impact on the region’s business community.
“Companies operating in the Industrials FTSE super-sector issued the region’s highest number of warnings last year, so businesses operating in this area in particular should continue to prioritise scenario planning and stress-testing. However, given the UK economy’s performance is expected to be slightly better in 2025 than last year, forward looking prospects appear to be improving. The North West is also home to a wide range of resilient, innovative businesses, so there are undoubtedly reasons for optimism despite last year’s challenges.”
Nationally, the FTSE sectors with the highest number of profit warnings in 2024 were Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – with 37 warnings issued, and Software and Computer Services, with 22.
