The number of profit warnings issued by listed companies based in the North of England dropped by 89% during the first three months of 2021, according to new figures.
EY-Parthenon’s latest Profit Warnings report has said the fall from 62 warnings recorded in the same period in 2020 is also a 30% drop on the previous quarter when 10 profit warnings were issued across the North.
It is also the lowest total of any quarter since the fourth quarter of 2014, when four warnings were issued.
EY added that those in FTSE consumer discretionary sectors – including retailers and travel andlLeisure – issued the most warnings during the period.
Sam Woodward, EY-Parthenon turnaround and restructuring strategy partner in the North West, said: "The majority of North-based businesses issuing profit warnings last year did so in the first quarter at the onset of the pandemic, but volumes began to fall from the middle of last year.
"Most FTSE sectors saw significant falls in profit warning numbers at the start of 2021, as the global vaccine roll out bolstered the economy and earnings forecasts.
"However, the continued withdrawal of forecasts by 15% of FTSE 350 companies indicates ongoing uncertainty.
"Consumer sectors are expected to benefit from a pent-up release in demand and household savings in 2021 — especially in the second quarter, as the economy re-opens.
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"A stronger than expected economic outlook, is also likely to boost confidence. There will be some issues to look out for though, not least inflationary risks which will grow as the recovery gains pace and monetary policy remains accommodating.
"Low levels of profit warnings are an indication of a temporary breathing space for companies. If they haven’t already, this is a time for 海角视频 business to reset and ready themselves to rebuild.
"The impact of the pandemic won’t automatically reverse when lockdown ends. For many businesses, pressures will intensify as they restart operations, government support tapers, and working capital becomes stretched."
Across the 海角视频, quoted companies issued 50 profit warnings in Q1, an 83% decrease from the 301 warnings recorded in Q1 2020 and the biggest year-on-year percentage fall in 海角视频 profit warnings on record.
Hunter Kelly, EY-Parthenon turnaround and restructuring strategy partner in the North East, added: "With government support set to taper away this summer, we are likely to see the start of three overlapping waves of insolvency risks in the 海角视频.
"Companies which would have otherwise become insolvent in the past 15 months will come back under pressure; the withdrawal of government support will also challenging companies weakened by the pandemic; and there are those companies which may be unable or too slow to adapt to rapid market change."