EY research

Record number of firms issue warnings on profit

JD Sports in St James
JD Sports was among the companies lowering profit expectations (pic: Terry Murden)

Listed UK companies have issued more warnings of missed profits expectations than was reached during the 2008 financial ­crisis, according to new research.

It reveals that 18.2% of stock market quoted companies issued a profit warning last year, compared with the 17.7% peak 15 years ago.

Higher interest rates and energy costs, ­weak ­demand and higher wages have all put pressure on balance sheets, according to EY-Parthenon, the consultancy service.

Delays to spending decisions were the cause of a quarter of profit warnings, with a fifth blamed on higher ­expenditure and borrowing costs.

Over the past 12 months, 39 companies published their third or more profit warning, 13% of which went on to delist.

Among those that have issued warnings in the past six months are Burberry, Diageo, JD Sports, Hays and Watches of Switzerland. Dr Martens, the bootmaker, issued its fourth profit warning in 12 months in November.

The most warnings (25) were issued by industrial support companies, followed by retailers at 24 and software and computer services providers at 21.

See Week Ahead: Diageo CEO to update after profit warning

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