‘Encouraging’ signs as profit warnings for Yorkshire companies fall 35% for first half of the year

Listed companies in Yorkshire issued a total of four warnings in the second quarter 2024, less than half of last year’s second quarter total of nine for the region. This marked Yorkshire’s lowest quarterly number of profit warnings since the fourth quarter of 2021. Profit warnings in the region also fell by 50 per cent quarter-on-quarter, down from eight in the first quarter of 2024.

Tim Vance, EY-Parthenon UK&I turnaround and restructuring partner in Yorkshire, said: “The significant fall in profit warnings seen in Yorkshire across the first half of 2024 is encouraging and reflects the resilience of businesses in the region.

“While the UK has seen a stronger start to the year from an economic perspective in comparison to last year, growth remains modest, which continues to pose challenges for businesses throughout the UK, including in Yorkshire.

“Inflation is now at a much lower level than it has been in the recent past and, given interest rates are expected to fall later in the year, a brighter, more buoyant period of economic activity and growth could be ahead for businesses in the region.

"However, as always, the possibility of a range of external, volatile factors impacting the UK economy remains”

Yorkshire’s declining profit warning figures were in line with the national trend, with a total of 49 profit warnings issued in the second quarter of 2024 across the UK – representing the smallest number of quarterly warnings since quarter two of 2021.

Despite a decrease in the number of quarterly profit warnings, the proportion of UK listed companies issuing a warning over the past year stands at 18.4 per cent, exceeding the peak level observed immediately after the 2008 global financial crisis.

This high level can be attributed to a significant number of new companies issuing warnings for the first time within a 12-month period. During quarter one 2024, 61 per cent of profit warnings came from companies that had not issued one for the past 12 months, and during quarter two of 2024 this figure stood at 50 per cent.

Leading factors behind many second quarter profit warnings included contract issues, which were cited in 29 per cent of warnings.

Jo Robinson, EY-Parthenon partner and UK&I turnaround and restructuring strategy deader, said: “An unprecedented rollcall of global elections and geopolitical risks means that an element of uncertainty remains, potentially exerting further pressure on spending and growth.

"We can expect the economy to continue to recover, but slowly and unevenly.”