A total of 34 North West companies issued profit warnings in 2017, a 21 per cent increase on the previous year, according to EY’s latest report.
The full year figure follows a fourth quarter that saw nine companies in the region issue warnings - two less than in the final quarter of 2016.
Across the UK, both the number of profit warnings and investor reaction increasing significantly in the final two quarters.
FTSE Support Services companies issued the most warnings in 2017 with 42.
Other sectors exposed to rising costs and business and consumer uncertainties complete the list: Software & Computer Services ( 27), General Retailers (24), and Travel & Leisure (22).
Sam Woodward, EY’s head of restructuring in the North West, said: “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 – will 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 get a handle on this changing economy.”
According to the report, 30 per cent of all profit warnings in 2017 cited cost and competitive pressures, compared to 16 per cent in 2016.
Contract uncertainties also continued in 2017, with 25 per cent of companies citing delays or cancellations, including 40 per cent of warnings from the FTSE Support sector and 60 per cent from FTSE Software & Computer Services.
