Warnings about future profits made by South West companies listed on the London Stock Exchange have soared by 75% compared to this time last year – with most of them blaming the coronavirus pandemic.
The latest analysis from international accountancy group EY shows there have been 14 profit warnings issued in the region so far this year against eight during the first quarter of 2019. 
Eleven of these specifically mentioned coronavirus as the reason for a material downgrade to their profit expectations.
EY, which has been tracking UK profit warnings for more than 20 years, described the increase unprecedented.
Across the UK as a whole, 167 Covid-19 related profit warnings were made between January 1 and March 27, equivalent to around 13% of the whole of the Stock Exchange’s Main Market and AIM.
Almost a quarter of those blaming the pandemic were from companies in the FTSE travel & leisure sector. Other hardest hit were firms in sectors such retail, housebuilding and media which have been impacted by social distancing measures, event cancellations and falls in advertising spending.
EY South West & Wales managing partner Andrew Perkins, pictured, said: “Many regional economies are dominated by particular sectors and we know that when economic activity is concentrated in such a way the impact locally can be all too real.
“For instance, the impact on hospitality and tourism is being felt particularly hard in the South West. 
“Beyond the implementation of immediate stabilisation measures, which will be of course the prime focus, it will be important to turn to the geographic impact of Covid-19 and to identify what additional schemes are required to protect and then restore local economies.”
However, the South West appears to have escaped lightly compared to other parts of the UK. The Midlands is the most affected region so far with a 209% increase against the same quarter last year, followed by the South East (up 188%), the North West (up 150%) and Yorkshire & the North East (up 100%).
EY restructuring partner Lucy Winterborne said Covid-19 had already profoundly affected boards’ ability to plan and forecast and, unsurprisingly, was driving a significant rise in profit warnings.
“The impact is being felt throughout the economy, but most notably in sectors closely connected to consumer spending, including travel and leisure,” she said.
“With a partial lockdown set by the government last week, we are likely to see an increasing impact on other sectors that require ‘employee proximity’ such as construction and manufacturing.”
