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Profit warnings jump but East fares better than other regions

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Seven profit warnings were issued by East of England publicly quoted businesses in the first quarter, more than double the number recorded in the period last year (three) and the highest since 2005 but still the joint-fewest number of any UK region.

Stuart Wilkinson, office managing partner at EY in the East of England, said: "The sectors issuing the highest number of profit warnings were those most exposed to the impact of national lockdowns and in many cases were already showing signs of stress. COVID-19 has created new problems, but it has also accelerated existing structural change and exacerbated existing weaknesses. When lockdown lifts, it will undoubtedly ease some pressures, but these underlying issues will remain.” Over three quarters of firms in region issuing warnings cited coronovirus as a reason.

He added: “These latest profit warning figures are not a surprise, and we expected to see a significant increase in the number of listed businesses issuing profit warnings, impacted by COVID-19, and the resulting lock-down measures introduced by the UK Government. No sector has escaped the impact of COVID-19 and across the UK businesses operating in the travel & leisure and retailers have understandably been the hardest hit due to a lack of consumer spend."

“The fact the East of England reported one of the lowest numbers of profit warnings in the UK during the first quarter of the year, reflects the business environment of the region, which features a larger concentration of businesses operating in the private middle market and SMEs. Some of the measures implemented by the government, including the Coronavirus Large Business Interruption Loan Scheme and the COVID-19 Corporate Financing Facility, may go some way to supporting larger businesses through this current. However, regardless of size, businesses will still have had to content with the same challenges, including cashflow and managing employees.”

Nationally, 301 profit warnings were issued by UK-listed businesses in the first quarter, almost equal to the total issued in the whole of 2019 and over three quarters of firms cited coronovirus as a reason.The number of profit warnings in the East was on a par with the North East, which also reported seven.

Last Updated ( Tuesday, 05 May 2020 06:57 )