Profit warnings among UK listed Midlands companies almost double, report reveals

The West Midlands recorded six warnings, marking its highest quarterly total this year. While in the East Midlands, seven warnings were issued — the region’s highest total since Q4 2022. 

The FTSE sector with the most profit warnings from Midlands based companies during Q3 2025 was construction and materials, with three warnings — equalling its total for the entire first half of the year. Other sectors issuing warnings included automobiles and parts and household goods and home construction.

Claire Gambles, EY-Parthenon partner in the Midlands, said: “Companies across the Midlands region have seen a notable uptick in profit warnings this quarter, with volumes approaching levels indicative of systemic stress across key sectors. The concentration of warnings in construction and materials reflects ongoing margin compression and project pipeline volatility, while warnings in consumer-facing sectors point to deteriorating sentiment and pressure on discretionary spend.

“The regional data aligns with broader macroeconomic headwinds — including policy uncertainty and geopolitical risk — that are amplifying forecasting challenges and liquidity constraints. As we look ahead, Midlands businesses will need to remain agile, balancing resilience with proactive restructuring to manage risks and seize emerging opportunities.”

Nationally, UK-listed companies issued 64 profit warnings between July and September 2025, with one in five (19 per cent) citing weaker consumer confidence, the highest proportion recorded for this cause since 2022.

While 19 per cent of all profit warnings referenced falling consumer sentiment, this figure rises to more than half (56 per cent) for listed retailers. The leading factor behind profit warnings during the third quarter was policy change and geopolitical uncertainty, cited in nearly half (47 per cent) of warnings. This marked the highest percentage recorded for this cause in more than 25 years of EY’s analysis, and a significant increase from 17 per cent in Q3 2024.  

A third (34 per cent) of profit warnings issued in the third quarter cited contract and order cancellations or delays, while 22 per cent referenced tariff-related impacts, including weaker demand and supply chain disruption. 

Jo Robinson, partner and UK&I financial restructuring leader at EY-Parthenon which has a regional office in Birmingham, added: “The latest profit warnings data shows the persistent uncertainty which has weighed heavily on UK businesses has spread to households. The standout trend in Q3 was the knock-on effect of weakening consumer confidence, at its highest since late 2022 when rising energy prices and the wider cost-of-living crisis were having an acute impact on consumer behaviour. 

“Companies are still clearly seeing ripples from earlier geopolitical tensions and policy shifts, and the proportion of firms to have issued a warning in the last 12 months has consistently been at a level typically associated with a period of economic shock for the past two years. As the Government faces difficult decisions ahead of the Autumn Budget, businesses are continuing to navigate market shifts and external threats, adapting their operations and supply chains to ongoing uncertainty and growing risks like cyberattacks.  

“While buoyant equity markets over the summer sustained a narrative of corporate resilience, resilience is not immunity. Forecasting confidence is being disrupted by near-constant change, and restructuring activity continues to rise as persistent pressures leave many companies with tighter liquidity and reduced flexibility. In this environment, firms must adopt a measured, scenario-based approach that balances both agility and strategic clarity.”