In contrast, the report shows that the number of profit warnings across the UK has jumped to 321 in the period July 2015 to June 2016, from 296 in the same period the year before. The UK has seen a sharp rise in the most recent quarter (April to June 2016), jumping to 66 profit warnings in that period, making it the highest level of second quarter profit warnings since 2008.
Quoted companies in the South East of England saw the biggest increase, with the number of warnings issued in the region more than doubling. 21 warnings were issued in the second quarter of 2016 up from 10 in the same quarter last year.
Slower than expected sales continues to trigger most UK profit warnings. However, 11% of the profit warnings in Q2 relate to the EU referendum, with companies primarily citing the impact of uncertainty on demand and the weaker pound.
Nick Gomer, EY’s Managing Partner in Cambridge, said: “The uncertainty created in the lead up to the EU referendum has already impacted profit warnings nationally. Whilst East Anglia seems to have weathered the storm, the third quarter will be a key test for the resilience of companies in the region and their ability to manage the Brexit challenge whilst positioning themselves to capture the opportunities which may arise.”
Upheaval and transformation become the norm
“Brexit will disrupt company operations and business models; but this is part of a bigger disrupted picture and the need to adapt, innovate and capture limited growth in constantly changing markets continues unabated.
“Companies will need an integrated response to help them navigate their way through this period of immense change. The winners will be those that demonstrate clear thinking about their priorities, build in resilience to cushion the knocks and ensure that they can take advantage of opportunities. It’s all change again, but upheaval and transformation are becoming the norm.”
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Julia Ruane, EY Media Relations, 07392 106023, jruane@uk.ey.com
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Number of profit warnings in East Anglia remain low despite EU referendum uncertainty
25 July 2016
Quoted companies in East Anglia have issued nine profit warnings in 12 months leading up to the EU referendum, one less than in the 12 months previous to that, according to EY’s latest Profit Warnings report.