Forecasts on the Line

UK profit warnings rose substantially year-on-year to hit 58 in Q2 2018, 13 (29 percent) more warnings than the same period in 2017, finds this report by EY.

Key points include:

The year-on-year rise in profit warnings stems mostly from consumer sectors and increasing contract disruption, which is cited in 29% of warnings in Q2 2018 — a six year high

The FTSE sectors with the highest number of warnings in Q2 2018 were: General Retailers (7), Software & Computer Services (6), and Travel & Leisure (5).

Almost a quarter of FTSE General Retailers warned in the first half of 2018. The sector issued 20 warnings in in H1 2018, doubling the figure set in H1 2017.

Retail remains under relentless pressure, with options to meet falling spend, rising costs and intense competition limited as landlords toughen their stance on Company Voluntary Arrangements (CVAs).

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