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

One in five (19%) UK-listed companies issued a profit warning in 2024, the third highest annual proportion in 25 years, according to EY-Parthenon’s latest Profit Warnings report.

The 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.

The report also revealed that FTSE sectors with the highest number of profit warnings in 2024 were Industrial Support Services – which encompasses business service providers, industrial suppliers and recruitment companies – with 37 warnings issued, and Software and Computer Services, with 22.

FTSE Retailers issued 20 profit warnings in 2024, including seven in Q4, a small decrease from the 24 issued in 2023.

However, the proportion of listed companies in the retail sector to warn only fell very slightly, to 38% from 39% in 2023. Three-quarters (75%) of FTSE Personal Goods companies (10 warnings issued) and over half (52%) of FTSE Household Goods and Home Construction companies (19 warnings issued) also warned in 2024, underlining the ongoing pressure on discretionary spending.

Lastly, along with FTSE Household Goods and Home Construction, a high number of 2024 warnings were also seen across FTSE Technology Hardware and Equipment (18), with technology companies registering one of the highest levels of warning in 25 years of EY’s analysis.

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.

“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.”