U.K. listed companies have more than doubled their profit warnings for the third quarter, according to a report by the consultants EY-Parthenon.
Companies have issued 51 warnings for the quarter, up from 19 in the second quarter, the report said. The study found that 43% of the companies cited vulnerabilities to supply chains issues, rising energy costs, and labor shortages.
The consumer staples sector, which includes producers of food, drinks, and household products, issued six warnings -- the most for the third quarter since 2014. All but one blamed increasing costs or supply chain issues, the report found.
Read more: Supply Chain Chaos, Surging Costs Set to Plague Europe’s Profits
Some 39% of warnings cited the fallout from Covid-19, down sharply from 72% in the previous quarter.
While the direct impact of the pandemic may be waning, the increase in supply and cost pressures, and the end of government furlough support, will add to challenges ahead, the report found.
“There is nothing straightforward about this recovery,” said Alan Hudson, a partner at EY-Parthenon. “Whilst U.K. profit warning levels remained low during the summer, they jumped dramatically back to above-average levels in September, as supply chain and cost stresses cascaded through the economy.”
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