The London share market has seen a sharp rise in company profit warnings since President Trump’s threat to impose wide-ranging tariffs on imports into the United States.
The number of companies listed in the UK warning investors that their profits would be lower than expected rose to 26 last month, an increase of 24 per cent compared with April 2024. Half blamed their financial difficulties on tariff threats and US economic disruption, according to research from EY.
The surge in profit alerts last month came after a fall in the previous three months, which was just before Trump’s “liberation day” shock on April 2.
Trump’s brinkmanship created substantial disruption in April as companies delayed public listings and put off plans for buying and selling corporate assets. The London-listed groups that warned on profits in April saw the price of their shares fall by an average of 19 per cent on the day of the announcement.
TT Electronics, a manufacturer of high-performance electronic products, and Clarksons, the FTSE 250 ship-broker, were among companies warning on profits in recent weeks. TT said it faced “increased market uncertainty” from the White House’s plan to increase trade costs, while Clarksons estimated its profits could be reduced by about £9.5 million.
Jo Robinson, the restructuring strategy leader at EY, said: “The first quarter of 2025 may now feel like a different era for many businesses, but the latest profit warnings data reveals underlying weaknesses that will be magnified by recent tariff disruptions and the resulting economic fallout.
“UK businesses have faced unprecedented challenges in recent years and have developed admirable levels of resilience in response, which should serve many well as the global economy navigates the coming months of uncertainty.”
The research found the number of profit warnings over the first quarter as a whole declined by 11 per cent to 62. Investors were told contract and order cancellations, or delays, were the cause of unexpected pressures on profits in 40 per cent of cases during the three-month period. Over the past ten years, the number of companies warning on profits in April has averaged 19, excluding the year of the pandemic.
Claire Gambles, a restructuring partner at EY, said: “UK companies have faced many challenges in recent years, but ongoing global trade disruption has the potential to bring even more substantial and far-reaching repercussions.
“Demand and supply shocks from the pandemic and geopolitical events were significant but primarily cyclical disruptions, whereas major changes to international trade policy may have more enduring effects.”
