North East profit warnings still high as Brexit uncertainty drags on

Hunter Kelly
Hunter Kelly

North East and Yorkshire quoted companies issued ten profit warnings in the first quarter of 2019 – the same as in the previous quarter – according to the latest Profit Warnings Report from business support specialist EY.

The number of warnings issued by plcs in the region has remained steady in the last 12 months – between nine and ten issued in each quarter – but is still at a relatively high level.

Protracted uncertainty is taking its toll on the UK and has impacted on consumer, investor and business confidence for a good while now.

Hunter Kelly

The ten profit warnings recorded in the North East and Yorkshire in the first three months of the year were spread across six sectors, including Support Services, Travel & Leisure, and Personal Goods.

Hunter Kelly, EY’s Head of Restructuring for the North East and Yorkshire, said: “Protracted uncertainty is taking its toll on the UK and has impacted on consumer, investor and business confidence for a good while now.

“The ‘no deal Brexit’ countdown was especially disruptive for businesses as they focused on how to deal with the likely supply chain and regulation issues that would arise.

“However, it is hard to split out the impact of Brexit stresses from mounting global trade and growth concerns, including the recent weakening of the global economic outlook, and rising concerns over China’s trade relations with the rest of the world.”

UK picture

Across the UK, quoted companies issued the highest number of first quarter profit warnings since the global financial crisis a decade ago.

In the three months to the end of March, EY recorded 89 profit warnings – 22% higher than 2018 and up by one compared to the final quarter of 2018.

The rise in warnings came across a broad range of sectors, with profit alerts spreading beyond previously dominant consumer sectors. The sectors issuing the most profit warnings in were General Retailers, Financial Services and Travel and Leisure.