UK‑listed companies face record‑high profit warnings in Q3

UK Companies Were Caught Off‑Guard by a Proliferation of Profit Warnings

What happened? Between July and September 2024, UK‑listed companies threw in a staggering 84 profit warnings, the highest quarterly count in two years. The EY‑Parthenon report shows that the total rose 11% from the same period last year.

Why did so many companies warn about lower profits?

Contract woes – 38% of warnings cited cancellations or delays. This is the biggest spike seen in 15 years.
Sales slump – 33% warned that revenue was slipping.
Other factors such as supply‑chain hiccups and regulatory changes also played a role.

What’s the bigger picture?

Almost one in five UK firms—19.2%—has issued a warning in the last year, the highest 12‑month figure since the pandemic and only surpassed by the 2001 peak.

Ey‑Parthenon’s Take

Jo Robinson, EY‑Parthenon partner, said:

“Uncertainty has been the business norm for a while, but this sudden burst of warnings didn’t come from a sharp economic crash or a single shock. Instead, it’s the cumulative effect of summer delays, the new Chancellor’s Autumn Budget buzz, and ongoing geopolitical tensions. It shows how quickly sentiment can shift and how earnings can be rattled.

She added, “Whether this spike is a blip or a sign of a longer trend remains to be seen, but the combo of a shaky economy, policy swings, tech upheavals, and fickle consumer habits means sharp earnings revisions are increasingly likely.”

Robinson urged companies and investors to keep a keen eye on emerging issues and to act swiftly. “The restructuring landscape is in flux, and innovation can help preserve value, but fast moves are still vital to capture the best outcomes.”

Bottom Line

UK businesses are feeling the heat from multiple fronts. The latest profit warnings add a dose of reality to the jitters investors and managers have been riding. In this stormy environment, staying alert and response-ready comes across as our best weapon for weathering the waves ahead.

Industrials and technology lead the rise

FTSE Sectors Firing Profit Warnings in the Third Quarter

It’s the “warning storm” that’s creeping across the FTSE market. Here’s the scoop on which sectors are getting the loudest shouts about slowing revenue.

Industrial Support Services Leads the Pack

Industrial Support Services – think business‑service nobles, industrial suppliers, and recruiting firms – logged a whopping 10 profit warnings. The sector’s 90%+ of alerts stem from clients playing hard to get: lower orders and contract delays are the main culprits.

Technology Hardware & Equipment Not Far Behind

Technology Hardware & Equipment follows with 8 warnings, mainly tied to 70% of its concerns about shrinking order books and stalled contracts. It seems the tech crowd is also feeling the pinch.

Key Insight from EY’s Dan Hurd

Dan Hurd, partner at EY’s Turnaround & Restructuring, weighed in: “The Industrial Support Services sector is basically a land‑lubed economy—any budget cuts or uncertainty ripples right through it.” He noted that 23 warnings have popped up so far this year, reflecting a slump in sales and tightening budgets.

“The 64% jump in industrial profit warnings tells us that the commercial aerospace and automotive arenas are under a real strain, even though aerospace is still pulling in steady demand. It’s grappling with industrial strikes, supply‑chain headaches, and production snags at big airline makers.”

Hurd added a reality check for automakers: “European car sales are still below pre‑pandemic highs, and OEMs are juggling regulatory pushes to grow their electric‑vehicle lineup. This messes with the supply chain and keeps OEMs glued to the resilience of their dealer networks.”

Other Sectors Feeling the Heat

Software & Computer Services – 7 warnings
Travel & Leisure, Investment Banking & Brokerage, Media – 5 warnings each

Even with the numbers, the underlying story is clear: businesses across many sectors are tightening belts, hesitating on new deals, and scrambling to keep their chains intact amidst a volatile economic backdrop.