THE NUMBER of Yorkshire companies issuing profit warnings increased last year, as many firms faced rising costs.
A total of 28 Yorkshire and North East companies issued profit warnings in 2017, a 17 per cent increase on the previous year, according to a study by professional services firm EY.
The full-year figure follows a fourth quarter that saw seven companies in the region issue profit warnings, according to EY’s latest Profit Warnings report.
A spokesman said: “Across the UK, 2017 was a year of two halves, with both the number of profit warnings and investor reaction increasing significantly in the final two quarters. Notably, the median share price drop on the day of warning rose from 12 per cent in the first half of 2017 to 14.9 per cent in the second and 15.2 per cent in Q4 – the highest since the Brexit vote quarter of Q2 2016.”
Charles King, associate partner in EY’s restructuring team, said: “The number of profit warnings issued by companies in Yorkshire and the North East have fluctuated from quarter to quarter in the last year.
“Companies that issue profit warnings are now under greater scrutiny and investors are reacting with less patience, especially in sectors where shareholders view warnings as a sign of deeper issues rather than a one-off event.
“In 2018, inflationary pressures may ease, but new challenges are emerging and some existing concerns – most notably Brexit – are likely to come to a head.
“There are still many opportunities to capture growth; but the cumulative impact of rising costs, slowing growth and increasing competition will continue to expose weaknesses in any company struggling to understand this changing economy.”