Listed companies in the South East of England issued 16 profit warnings in Q1 2025 – the same number as the previous quarter, according to the latest EY-Parthenon Profit Warnings report.
Nationally, UK-listed companies issued 62 profit warnings between January and March 2025, an 11% year-on-year fall. However, the proportion of listed firms to warn in the last 12 months remains high (18%).
Listed companies in the South East in the FTSE industrials sectors issued the most warnings (7), three more than Q4 2024. Other sectors that reported warnings include the FTSE technology, healthcare and consumer discretionary sectors.
Gareth Anderson, office managing partner at EY in Reading, said: “Companies across the UK, including those in the South East, have faced significant challenges over the last few years and have had to become adept at navigating ongoing uncertainty.
“However, recent global trade disruption could bring more lasting effects compared to the cyclical disruptions we’ve seen previously from the pandemic and recent geopolitical events.
“Over the coming months, companies will need to balance immediate responses, like strengthening financial resilience, with strategy shifts such as reassessing supply chains, pricing models or exploring new global partnerships in order to address upcoming uncertainties.”
The leading factor behind profit warnings in Q1 was contract and order cancellations or delays, cited in 40% of warnings – the highest percentage recorded for this cause in 25 years of EY’s analysis. Policy change and geopolitical uncertainty (26%) and labour market issues (18%) were cited as the other main drivers for warnings during Q1.
So far in Q2, half (50%) of the profit warnings issued by UK-listed businesses in April cited the direct or indirect impact of tariffs and resulting recent global trade disruption. The average share price fall on the day of warning also climbed, up from 13% in Q4 2024 to 17% in Q1 2025 and almost a fifth (19%) in April 2025.
Jo Robinson, EY-Parthenon partner and UK&I turnaround and restructuring strategy leader, said: “The first quarter of 2025 may now feel like a different era for many businesses, but the latest profit warnings data reveals underlying weaknesses that will be magnified by recent tariff disruptions and the resulting economic fallout.
“Nearly one in five listed firms issued a warning in the last 12 months – that’s a level typically associated with a period of economic shock.
“UK businesses have faced unprecedented challenges in recent years and have developed admirable levels of resilience in response, which should serve many well as the global economy navigates the coming months of uncertainty.
“At times like these, businesses must focus on staying nimble by planning for a range of different scenarios and continuing to build operational and financial resilience.”
