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British firms have been plagued by profit warnings and sliding output — and many aren’t hopeful for an imminent recovery

British businesses are expecting more price rises, further hiring cutbacks and continued output declines to weigh on profits in 2025, despite assurances from the government that it is aggressively pursuing growth-friendly policies.

Profit warnings from companies listed in the U.K. were rife last year, new data showed on Monday.

One in five U.K.-listed companies issued a profit warning in 2024, according to research from accounting giant EY's consulting arm. It marked the highest proportion of London-listed firms issuing profit warnings in one year since the height of the Covid-19 pandemic in 2020 — and the third highest in 25 years.

Over the past quarter century, only 2020 and 2001, when the Sept. 11 terrorist attacks and the dotcom bubble weighed on markets, saw bigger percentages of FTSE-listed firms issuing profit warnings, EY-Parthenon said.

Last year, 274 profit warnings were issued, according to the report, with 71 issued in the fourth quarter. Contract and order delays or cancellations — cited in 34% of 2024's profit warnings — were the biggest source of pressure on corporate profits, the data showed. Meanwhile, increasing costs were behind one in five of the profit warnings issued throughout the year, according to EY researchers.

Luxury car maker Aston Martin, fashion house Burberry and home builder Vistry were among the London-listed companies to issue profit warnings last year. But certain industries saw a particularly high influx of profit warnings in 2024, EY-Parthenon said on Monday. Thirty-eight percent of FTSE-listed retailers cut their profit guidance last year, while 75% of companies in the personal goods sector cautioned investors about their profit outlook.

Jo Robinson, EY-Parthenon Partner and UK&I

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