Profit warnings among UK-listed companies have reached their highest quarterly level in three years as interest rate hikes continue to cut into the bottom line.
UK-listed companies issued 66 profit warnings between April and June this year, according to an EY-Parthenon report.
The report also found that warnings have risen year on year for the seventh consecutive quarter, marking the longest run since 2008.
Last quarter’s warnings were the highest since the second quarter of 2020 when 166 profit warnings were issued.
Nearly a fifth of all UK-listed companies have issued a profit warning in the past 12 months, with persistent inflation and rising interest rates playing a significant role in the second quarter.
The number of companies issuing multiple warnings was also on the rise, with 29% of companies that issued a profit warning last quarter having done so for at least the third time in the last year.
“The sustained rise in profit warnings over the last two years reflects the extraordinary mix of challenges faced by UK businesses over that timeframe,” said Jo Robinson, EY-Parthenon partner and UK&I turnaround and restructuring strategy leader.
“It’s now clear that the effects of these low-growth conditions are spreading to nearly all corners of the UK economy, and this quarter we’ve seen earnings pressure extend up the value chain into the mid-market,” Robinson added.