The number of profit warnings from listed companies in the North West ticked up in 2024 as businesses were affected by high costs and global uncertainty in the second half of the year.
EY-Parthenon’s latest Profit Warnings report showed 海角视频-listed companies in the North West issued 29 profit warnings during 2024, up on the 27 warnings in 2023. The first half of 2024 saw profit warnings fall year-on-year – but a “challenging” third quarter pushed up the total.
In line with the national trend, regional businesses in the Industrials FTSE super-sector were worst affected, with seven warnings in 2024. Regional businesses in the consumer discretionary and technology FTSE super-sectors issued a total of five warnings each.
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The EY-Parthenon study found that 海角视频-listed companies issued 274 profit warnings last year, down slightly from the 294 issued during 2023.
It showed the leading factor behind profit warnings last year was “contract and order cancellations or delays”, cited in 34% of warnings. Increasing costs sparked 18% of warnings in the last 12 months.
Sam Woodward, EY-Parthenon 海角视频&I turnaround and restructuring partner in the North West, said: “After an encouraging and resilient start to 2024, the second half of the year was a more difficult period for companies in the North West, with economic challenges including sticky inflation, high interest rates and geopolitical tensions beginning to have a more significant impact on the region’s business community.
“Companies operating in the Industrials FTSE super-sector issued the region’s highest number of warnings last year, so businesses operating in this area in particular should continue to prioritise scenario planning and stress-testing. However, given the 海角视频 economy’s performance is expected to be slightly better in 2025 than last year, forward looking prospects appear to be improving. The North West is also home to a wide range of resilient, innovative businesses, so there are undoubtedly reasons for optimism despite last year’s challenges.”
Jo Robinson, EY-Parthenon partner and 海角视频&I turnaround and restructuring strategy leader, said: “It’s clear that companies have faced an extraordinary succession of forecasting challenges since the pandemic, contending with interconnected disruptions to supply chains, material and energy costs, and the labour market, as well as higher interest rates. 2024 was also an exceptional year for global geopolitical uncertainty and policy upheaval, with a record level of profit warnings linked to contract and spending delays as businesses held back from recruitment and investment. As a result, companies’ forecasting strategies need to respond to both short-term policy changes and deeper structural issues.
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“Ordinarily, a sustained increase in company earnings pressures would be followed by a significant rise in insolvencies. But this cycle has been different. The availability of cheap, long-term debt and pandemic support provided breathing space for both businesses and stakeholders to explore consensual solutions and new restructuring options.
“However, more companies are now reaching a tipping point as cumulative pressures build. We don’t expect a huge uptick in insolvency levels in 2025, but we are now seeing more distress, and more stakeholders viewing insolvency processes as a real option in finding the best path forward.
“While the pace of profit warnings has eased slightly in early 2025, we’ve seen the recruitment sector continue to grapple with a downturn in activity across key geographies and sectors, before the increases in employer National Insurance Contributions and the National Living Wage take effect. Across the board, the road ahead remains rocky with challenges around trade, geopolitics, interest rates, and more.”
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