Profit warnings soar to highest level since the financial crisis

Profit warnings from UK companies have hit their highest level since the financial crisis, according to EY. 

A total of 86 statements downgrading profit forecasts were issued by companies over the third quarter of 2022 – the largest number for July to September since 2008. 

This is up from 51 over the same time last year, and 64 in the second quarter of this year. 

It comes as companies are battling with rising costs, especially energy bills, driven by the aftermath of Covid and the war in Ukraine. At the same time, the cost-of-living crisis is causing consumers to cut back on spending. 

The acceleration of profit warnings was particularly notable among consumer-facing businesses such as shops, travel firms and food producers, EY said. 

Jo Robinson, a partner at the firm’s consultancy arm EY-Parthenon, said: ‘Businesses are facing an unprecedented combination of headwinds including rising costs, slowing demand and excess supply.’ 

Companies including Next, Primark-owner Associated British Foods and The Hut Group have all shaved down their profit guidance in recent weeks.