Profit warnings issued by UK-based companies increasingly connected to import tariffs and trade disruptions Readjustment in trade policies and customs duties influencing substantial income declares among U.K. stocks
UK-based firms have been hit hard by global trade disruptions, as evidenced by the spike in profit warnings last month. EY analysis shows that there were 26 profit warnings from UK-listed firms in April, up from 21 in the same month the previous year. And get this, 13 of those warnings directly cited tariffs as a major factor.
When these profit warnings drop, a company's share price tends to plummet, with affected companies seeing an average drop of 19%. In the first quarter of 2025 alone, 62 profit warnings were issued - though that number was 11% lower than the same period in 2024.
But here's the kicker - before Donald Trump's so-called "Liberation Day" tariffs were announced at the start of April, that number was lower. Companies like TT Electronics and ship broking giant Clarkson have already issued profit warnings in relation to tariffs. Others, like Peppa Pig toy maker Character Group, have withdrawn profit guidance altogether due to the uncertainty.
So, if you're invested in UK-listed companies, it might be time to start sweating the small stuff - or in this case, the big tariffs. Yikes!
- The rise in profit warnings from UK-listed firms in April, which spiked from 21 in the same month the previous year to 26, has been attributed to global trade disruptions, with 13 of those warnings citing tariffs as a major factor.
- With tariffs potentially causing a drop in a company's share price by an average of 19%, the increasing number of profit warnings could be a red flag for investors involved in UK business and finance.
- The first quarter of 2025 saw a higher number of profit warnings compared to the same period in 2024, but it's notable that the number was lower before the announcement of President Trump's "Liberation Day" tariffs at the start of April.
- Companies like TT Electronics and Clarkson have issued profit warnings in relation to tariffs, while others, such as Peppa Pig toy maker Character Group, have withdrawn profit guidance altogether due to the uncertainty brought by the tariffs in accountancy matters.
