Market Data

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

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One in five (19%) UK-listed companies issued a profit warning in 2024, according to EY-Parthenon’s latest Profit Warnings report. This was 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.  

Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader, said:

“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. 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. 

“Ordinarily, a sustained increase in company earnings pressures would be followed by a significant rise in insolvencies. But this cycle has been different. The availability of cheap, long-term debt and pandemic support provided breathing space for both businesses and stakeholders to explore consensual solutions and new restructuring options. However, more companies are now reaching a tipping point as cumulative pressures build. We don’t expect a huge uptick in insolvency levels in 2025, but we are now seeing more distress, and more stakeholders viewing insolvency processes as a real option in finding the best path 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. Across the board, the road ahead remains rocky with challenges around trade, geopolitics, interest rates, and more.”