Treasury News Network

Learn & Share the latest News & Analysis in Corporate Treasury

  1. Home
  2. Cash & Liquidity Management
  3. Cash & Liquidity Mngm in Europe

One in five UK-listed companies issued a profit warning in 2024

One in five (19%) UK-listed companies issued a profit warning in 2024, the third highest annual proportion in 25 years, behind only the 2020 pandemic (35%) and the impact of the dot-com bubble burst and 9/11 in 2001 (23%).

EY-Parthenon’s latest Profit Warnings report found that UK-listed companies issued 274 profit warnings last year – including 71 in Q4 – down slightly from the 294 issued during 2023. 

The leading factor behind profit warnings in 2024 was contract and order cancellations or delays, cited in 34% of warnings, including 39% in Q4 – the highest quarterly percentage for this reason in more than 15 years. Increasing costs triggered nearly one in five (18%) warnings in the last 12 months.  

“It’s clear that companies have faced an extraordinary succession of forecasting challenges since the pandemic, contending with interconnected disruptions to supply chains, material and energy costs, and the labour market, as well as higher interest rates,” commented Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader. “2024 was also an exceptional year for global geopolitical uncertainty and policy upheaval, with a record level of profit warnings linked to contract and spending delays as businesses held back from recruitment and investment. As a result, companies’ forecasting strategies need to respond to both short-term policy changes and deeper structural issues.”

In a typical cycle, rising earnings pressures would trigger a wave of corporate insolvencies. Not this time, however, as access to cheap, long-term debt, combined with unprecedented pandemic support, gave businesses the breathing room to rethink strategy, negotiate with creditors, and explore new restructuring options.

But that buffer is eroding. Pressures are building, and more companies are reaching a tipping point. While a surge in insolvencies is unlikely this year, distress signals are flashing across the market. Stakeholders who once sought to avoid formal insolvency processes are now eyeing them as a practical solution to chart the best course forward.

“While the pace of profit warnings has eased slightly in early 2025, we’ve seen the recruitment sector continue to grapple with a downturn in activity across key geographies and sectors, before the increases in employer National Insurance Contributions and the National Living Wage take effect,” added Robinson. “Across the board, the road ahead remains rocky with challenges around trade, geopolitics, interest rates, and more.” 

Industrials and retail see high number of warnings 

The FTSE sectors with the highest number of profit warnings in 2024 were Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – with 37 warnings issued, and Software and Computer Services, with 22. 

FTSE Retailers issued 20 profit warnings in 2024, including seven in Q4, a small decrease from the 24 issued in 2023. However, the proportion of listed companies in the retail sector to warn only fell very slightly, to 38% from 39% in 2023. Three-quarters (75%) of FTSE Personal Goods companies (10 warnings issued) and over half (52%) of FTSE Household Goods and Home Construction companies (19 warnings issued) also warned in 2024, underlining the ongoing pressure on discretionary spending. 

Along with FTSE Household Goods and Home Construction, a high number of 2024 warnings were also seen across FTSE Technology Hardware and Equipment (18), with technology companies registering one of the highest levels of warning in 25 years of EY’s analysis. 

“Profit warnings in the retail sector remained prevalent in 2024,” noted Silvia Rindone, EY Partner and UK&I Retail Lead. “Whilst festive trading reports were broadly positive, they highlight that demand is only part of the story. Higher employment costs and the investment needed to adapt to changing consumer behaviour will challenge every retailer during 2025.”

Shoppers are still willing to spend – when the price is right and the value is clear. But for retailers, uncertainty is the name of the game. Rising costs loom large, and there’s hesitation over how much can realistically be offset through automation or efficiency gains. Passing these costs on through price hikes is no straightforward solution either. As a result, caution is the prevailing mood across the sector as they navigate the challenges of the year ahead.

Like this item? Get our Weekly Update newsletter. Subscribe today

Also see

Add a comment

New comment submissions are moderated.