Finance
Profit warnings in the region hit historic high
Profit warnings issued by West Midlands-listed businesses reached a record- breaking high in the first three months of 2020, claims a new report. The number of warnings was higher than any previous quarter in the last
20 years, according to EY’s latest Profit Warnings report. Twenty-one profit warnings were recorded by EY between 1 January and 31
March 2020 in the region, compared to just nine for the same period in 2019, representing an increase of 133 per cent. Unsurprisingly the significant increase in warnings was attributed to the
Covid-19 crisis, which has temporarily paralysed many businesses, with very few sectors immune from its effects. Dan Hurd, EY’s head of Restructuring in the Midlands, said: “The sectors
issuing the highest number of profit warnings were those most exposed to the impact of national lockdowns and in many cases were already showing signs of stress. Covid-19 has created new problems, but it has also accelerated existing structural change and exacerbated existing weaknesses. When lockdown lifts, it will undoubtedly ease some pressures, but these underlying issues will remain.” According to the report, a years’ worth of UK profit warnings
issued in the first quarter of 2020. By percentage of companies warning, FTSE travel and leisure was the most dramatically affected, with 70 per cent of the sector issuing a profit warning, followed by industrial materials (63 per cent) and retailers (61 per cent). Mr Hurd said: “We know from previous crises that one of the
biggest tests comes when companies need to reflate balance sheets, restock inventory and depend on supply chains that have been similarly tested. It is wise for companies to take a slow and steady approach to restarting operations that allows for flexibility, so they can react to continued uncertainty.”
Dan Hurd:
Insolvencies set to rise because of the Covid-19 crisis
Sector Focus
Unity Trust names new regional director
Unity Trust Bank has appointed a new Midlands regional director, James Whitaker. James has joined Unity Trust
after 13 years at Barclays, where he held several top positions. Unity Trust Bank is headquartered in Birmingham, and is an independent bank that supports organisations across the UK that are socially responsible and share its philosophy of contributing positively to economic, community and social change. Mr Whitaker said: “I was
attracted to Unity Trust Bank because of its Midlands’ heritage, its dual focus on sustainable financial returns alongside social impact, and the opportunity to grow its footprint in the region. “It’s rare to find a bank where
social impact is truly embedded across the whole organisation, but Unity has a proven track record of delivering exactly that. “Having joined the bank against
the current backdrop of the Covid-19 pandemic, it’s encouraging to see how Unity is supporting its customers and the local economy through a range of measures such as providing advice on cash management and business continuity.”
June/July 2020 CHAMBERLINK 57
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