Listed companies in the Midlands issued 14 profit warnings in the first half of 2025, one fewer than the same period last year, according to the latest EY-Parthenon Profit Warnings Report.
Companies in the region issued seven warnings in the second quarter, the same as Q1 and one more than Q2 2024, when six warnings were issued.
Nationally, the number of profit warnings issued by UK-listed companies in Q2 2025 rose by 20% to 59 compared to the 49 issued during the same period last year. Over the last 12 months, nearly a fifth (19%) of UK-listed businesses have issued at least one profit warning.
Industrials and Construction sectors lead Q2 warnings
The FTSE sectors with the highest number of profit warnings in the Midlands during Q2 2025 were Industrial Support Services – which includes business service providers, industrial suppliers, and recruitment companies – and Construction and Materials, with two warnings each.
Construction and Materials also had the highest number of warnings in the Midlands for the first half of the year, with three in total.
Dan Hurd, EY-Parthenon turnaround and restructuring strategy partner in the Midlands, said: “While the region experienced a slight decrease in total warnings in the first half of 2025 compared to last year, the consistency of seven warnings in Q2 signals persistent volatility.
“The fact that the Construction and Materials sector led the warnings in the Midlands, with three in total, highlights the specific challenges facing these industries. This trend reflects a broader national narrative, where a significant rise in profit warnings indicates that many UK-listed companies are navigating turbulent waters.
“The concentration of warnings in sectors such as Industrial Support Services and Construction underscores the diverse pressures businesses are facing. This mix of performance suggests that while some companies are adapting to the current economic conditions, others are still struggling to find their footing.
“Emphasizing strategic flexibility will be vital for those seeking to maintain growth and manage risks in an increasingly challenging market environment.”
The leading factor behind profit warnings during the second quarter was policy change and geopolitical uncertainty, cited in nearly half (46%) of warnings. This marked a significant increase from just 4% in Q2 2024, and the highest percentage recorded for this cause in more than 25 years of EY’s analysis.
The proportion of profit warnings to cite contract and order cancellations or delays in Q2 remained at a record 40%. One in three warnings (34%) cited tariff-related impacts, including weaker demand, supply chain disruption, and exchange-rate volatility.
Jo Robinson, EY-Parthenon partner and UK&I turnaround and restructuring strategy leader, added: “The latest profit warnings data reflects the scale of persistent uncertainty and how heavy it continues to weigh on UK businesses. While this uncertainty has been a recurring theme since mid-2024, it has intensified so far this year – driven largely by geopolitical tensions and policy shifts – compounding pressure on both earnings and forecasts.
“While the announcement of global tariffs has clearly played a part in amplifying uncertainty, they are just one factor among broader geopolitical and policy upheaval. These pressures are often interlinked and, combined, they are having a significant effect on companies’ confidence, decision-making and spending.
“Whether the rise in profit warnings is cyclical or structural remains to be seen, and we still expect earnings pressure to ebb and flow with the macroeconomic backdrop. As companies operate in a risk and forecasting environment that is challenging to navigate, they must adopt a measured, scenario-based approach that balances both agility and strategic clarity.”
