The number of profit warnings issued by U.K.-listed companies in 2022 increased by 50 percent year-on-year, with record levels of these warnings citing rising costs, according to EY-Parthenon’s latest Profit Warnings report (member firm of Ernst & Young).
In total, 305 profit warnings were issued in 2022, an increase of 102 from 2021, when 203 warnings were issued. Half of the warnings issued in 2022 (152) were due to rising costs – double the share in 2021. During the year, 17.7 percent of the U.K.’s 1,193 listed businesses issued a profit warning, equal to the proportion of companies that issued warnings during the global financial crisis in 2008.
FTSE retailers issued the highest number of warnings (36), followed by FTSE travel and leisure (25).
Jo Robinson, EY-Parthenon partner and U.K. and Ireland turnaround and restructuring strategy leader, said: “Forecasting and planning will remain challenging in 2023, with the latest EY ITEM Club Winter Forecast warning the UK is set for a deeper recession than previously thought.”
Meanwhile Reuters reports that company insolvencies in England and Wales have hit a 13-year high, reflecting the end of the coronavirus-pandemic support that helped many small businesses stay afloat.
Total insolvencies rose to 22,109 in 2022, the highest since the global financial crisis and up by 57 percent from a year earlier, according to data released by the British government’s Insolvency Service agency, although part of the increase in the number of companies in difficulty reflects the higher number of companies overall.
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