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How to Avoid Profit Warnings

13:55, 29th January 2024
Justin Waite
Taking Stock

How to Avoid Profit Warnings

Taking Stock on Monday 29th January 2024

Profit warnings from UK-listed companies exceed those issued in 2008

High interest rates and weakening confidence have been blamed for pushing more UK companies into issuing profit warnings.

New data from EY-Parthenon this morning show that over 18% of public firms issued warnings in 2023, which is a higher proportion than at the peak of the financial crisis in 2008

In total, 294 profit warnings were issued by businesses in 2023, which is a slight drop on the 305 in 2022 – highlighting how tough the last two years have been for companies.

- 26% in 2023 were attributed to delayed contracts or decisions.

- 19% were due to increased costs

- 19% cited the impact of higher interest rates.

The survey showed that profit warnings blamed on rising costs fell through the year, but there was an increase in warnings blamed on corporate spending delays and higher borrowing costs.

During 2023, 39 listed companies issued their third or more consecutive profit warning in 12 months.

Companies mentioned on, "Taking Stock" today:

03:25 & 32:55 Team Internet #TIG 
03:50 08:57 19:34 Supreme #SUP 
03:55 Chill Brands #CHLL
12:56 Helium One #HE1 
13:50 DG Innovate #DGI
15:06 Blencowe Resources #BRES 
15:55 Superdry #SDRY 
17:25 Union Jack Oil #UJO 
21:35 Surgical Innovations #SUN 
24:25 25:10 Inspecs #SPEC 
24:30 Bacon Energy #BCE 
32:55 Team Internet Group #TIG 


UK inflation expectations fall as BoE readies rates message

The British public's expectations for inflation, especially in the short term, have fallen, according to a survey that will feed into this week's debate at the Bank of England about whether to signal a move towards cutting interest rates.

Public expectations for inflation for the 12 months ahead fell to 3.9% in November and to 3.5% in December from 4.2% in October, the survey by U.S. bank Citi and market research company YouGov showed.

The BoE is expected to take a tentative first step towards cutting interest rates from their highest level in nearly 16 years on Thursday after other signs that the inflation crisis is easing off. But while the central bank might soften its message about the possibility of future cuts, investors expect no actual reduction in borrowing costs for several more months.

(Click here to read more)


UK government to ban disposable vapes to prevent use by children

British Prime Minister Rishi Sunak will announce plans on Monday to ban the sale of disposable vapes to prevent their use by children, and reiterate the government's intention to introduce a law preventing younger generations from buying tobacco.

Under the new powers, there would be restrictions on vape flavours, a requirement for plain packaging, and changes to how vapes, or e-cigarettes, are displayed to make them less attractive to children.

Smoking is Britain's biggest preventable killer, causing one out of four cancer-related deaths, or some 80,000 a year, the government says. In October, Sunak announced plans to pass a law which would mean that anyone born on or after Jan. 1, 2009, would be unable to buy tobacco in their lifetime.

(Click here to read more)


Evergrande: Crisis-hit Chinese property giant ordered to liquidate

Debt-laden Chinese property giant Evergrande has been ordered to liquidate by a court in Hong Kong.

Judge Linda Chan said "enough is enough" after the troubled developer repeatedly failed to come up with a plan to restructure its debts.

The firm has been the poster child of China's real estate crisis with more than $300bn (£236bn) of debt.

(Click here to read more)



Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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