Newest figures reveal how the coronavirus pandemic has hit listed companies in the region with profit warnings up 150% for the first half of this year.
EY’s latest Profit Warnings report showed that there were 40 profit warnings in the north west between January and the end of June, higher than any other previous first half in the past 20 years, comparable in 2019 to just 16 in the same period.
After this record-breaking first quarter, when quoted companies in the region issued 27 warnings, 13 were recorded in the second quarter, with 83% citing the impact of the coronavirus crisis. Warnings were spread over a wide range of sectors with organisations operating in the FTSE retailers (7) and leisure and travel (4) sectors most affected.
Sam Woodward, EY strategy and transactions partner in the North West, said: “Unsurprisingly, the most immediate and dramatic impact of COVID-19 has been acutely felt by companies whose existing structural challenges have been exacerbated by the pandemic. However, many businesses that were essentially sound before the virus struck, have also been forced to fundamentally reassess their expectations and business plans too. It’s vital that North West businesses don’t underestimate the depth and extent of both the immediate and long-term challenges ahead. It is still a highly uncertain time for businesses, who are adjusting to new ways of working and changing levels of demand, with potential cliff-edges to come in government support and further twists and turns likely in Brexit negotiations. The UK economy is opening up, but it’s early days.”
Across the country, almost 33% of listed companies, compared to 2019 only 18%, issued a profit warning in the first half of the year.
This year, EY recorded 466 profit warnings in H1– more than the total number issued in the whole of last year (313).
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