Number of profit warnings edges up as Brexit uncertainty bites

Hunter Kelly - corporate restructuring partner at EY in Yorkshire and the North East

Hunter Kelly - corporate restructuring partner at EY in Yorkshire and the North East

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Quoted companies in the North of England issued 16 profit warnings in the third quarter of 2016 – the highest third quarter total since the 2008 recession, according to EY’s latest Profit Warnings report.

Yorkshire issued six profit warnings, with a further eight in the North West and two in the North East.

In London and the South East companies issued 38 warnings in the third quarter of 2016 – more than half the total number of warnings issued across the UK.

In the UK, the number of profit warnings jumped to 68 – two more than the previous quarter, but 11 fewer than the same period in 2015 – with almost a third of companies citing Brexit as a contributing factor. The initial Brexit impact has been mixed and the negative effects have been focused on sectors most exposed to business uncertainty and the weaker pound, including support services, travel and leisure, and real estate investment and services, the report said.

Most companies also blamed other factors, including falling sales and difficult sector conditions. Overall, the sectors leading profit warnings in the third quarter of 2016 were support services, general retailers, travel and leisure, household goods and industrial engineering.

Hunter Kelly, restructuring partner at EY in Yorkshire and the North East, said: “The warnings covered a number of sectors indicating there is no one factor behind the warnings – but sluggish, disrupted and competitive markets don’t provide companies with the luxury of standing still.”

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