UK-listed companies issuing profit warnings at its highest in a decade

Having said this, the number of profit warnings issued by UK listed companies fell by seven percent year-on-year in the first quarter of 2024 and dropped slightly when compared to the final quarter of last year, when 77 warnings were issued.  

Despite the fall, the number of companies warning for the first time in 12 months reached its highest level since the first quarter of 2022 – with 61% issuing a new warning in the first quarter of 2024.  

In addition to this, by the end of the first quarter of 2024, 39 companies had issued three or more warnings over the past 12 months – with just over a fifth of these either delisting or are in the process of doing so due to insolvency or acquisition.  

Meanwhile, contract cancellations and delays were cited as the main reason for warnings by 29% of companies, while higher costs and weaker consumer confidence each accounted for 17% of the warnings for the first three months of 2024.  

Reflecting on these findings, EY-Parthenon partner and its turnaround and restructuring strategy leader in the UK and Ireland said: “Macro-economic pressures, while less intense, have not relented in 2024 and the full impact of interest rate increases is yet to be felt by many businesses.  

“Larger companies and sectors such as luxury goods, which typically show resilience in economic downturns, are now starting to feel these pressures build. The data in EY’s latest Profit Warnings report underlines how integral swift action is to preserve value.  

“Whilst the green shoots of recovery can be seen, companies cannot afford to ignore the warning signs and rely on economic resurgence, particularly as we continue to navigate through an unprecedented period of uncertainty with forthcoming global elections and geopolitical risks still high on the agenda.

“Although this looks like an economically easier year on paper, companies still need to be scenario planning as the macro-economic pressures we have seen over recent years are far from over.”