Listed companies in the Midlands issued 31 profit warnings in 2023, a decrease of 21% on the previous year, according to the latest EY-Parthenon Profit Warnings report.
In Q4 2023, nine warnings were issued by companies in the region, the same as Q3 and the highest quarterly total since Q4 2022. The number of warnings issued during this quarter is down by over a third (9) on the same period (October – December) in 2022.
Companies within the Midlands operating in Industrial and Consumer Discretionary FTSE sectors continued to issue the highest number of profit warnings (eight) in Q4 2023.
This is comparable to the broader national trend, with FTSE Consumer Discretionary sectors issuing the most profit warnings in the UK during Q4, accounting for 35% of all warnings during this period.
Dan Hurd, a partner at EY-Parthenon in the Midlands, said: “Pressures caused by high inflation rates continued to effect businesses in the region and while this will ease as we navigate 2024, growth is likely to remain slow. Many companies will also continue to face challenges with high debt service costs and ability to refinance.
“Traditional funders will be cautious in investing in sectors with high consumer discretionary exposure and businesses may need to look for new avenues for capital, such as sourcing alternative lenders or seeking equity injections.
“The volatility of global events, including the forthcoming US and UK elections will create an element of uncertainty which will inevitably affect the economy, however, regardless of the outcome of these events, businesses will need to focus on the fundamentals and plan ahead if they are to remain resilient.”
