The UK economy is taking strain, new research shows, with the number of listed companies issuing profit warnings hitting a two-year high in 2017.
According to the findings, in the final quarter of last year quoted companies issued 81 profit warnings. Support services took the biggest strain, with 42 of the 276 profit warnings issued by all listed companies during 2017, 11 coming in the final quarter. This was closely followed by retail businesses which also appeared to experience intense pressure, with six companies in the sector releasing profit alarms in the final quarter, and 24 across the full year.
A spokesperson for the report says: “Retailers are working hard, but the restructurings announced before Christmas underlined how hard it is to outrun this relentless margin squeeze. We may have hit the peak of inflation, but prices still look set to run ahead of wages for most of 2018, while other cost and competitive pressures remain.”
Commenting on the collapse of Carillion, which imploded last month after a string of profit warnings in 2017, putting 20,000 jobs at risk and leaving 30,000 suppliers facing losses totalling £1 billion, a spokesperson says: “When a major contractor like Carillion falls over, the domino effect is huge.
“I fear that the issues we’ve heard about so far may only be the tip of the iceberg.”
With this in mind, it is essential that business owners look at ways of improving profitability, working capital and cashflow, enabling their businesses to be more agile and flexible to respond positively to the changing economic landscape.
At Beavis Morgan, we work with a wide range of businesses of all sizes and across many different business sectors, helping them with strategic planning, system implementation, business turnaround and improving business performance for the future.
Our diverse team of tax professionals are also committed to ensuring that your tax reporting obligations are fully satisfied and that every opportunity to lawfully exploit tax savings is made known to you, restructuring your affairs in a tax effective and efficient way.
If you have any concerns about your personal financial situation or that of your business, our partners at BM Advisory are available to assist. As specialists in providing restructuring, recovery and insolvency solutions for businesses and individuals, we understand the issues that can impact on business performance and success, and find innovative solutions for businesses and individuals in distress.
To arrange a confidential discussion, contact Andy Pear or Mike Solomons at BM Advisory. Your initial consultation will be free of charge and without obligation. Together we will discuss your individual situation and advise on the best course of action.