Link Group’s quarterly profit monitor said UK plcs are entering the coronavirus crisis in an “unusually weak” state, as fewer companies reported rising profits than at any time since 2009.
The group forecasts a 75 per cent decline in UK company profits by autumn this year, before a bounce-back occurs into 2021.
Results reported during the three months to March – before any Covid-19 effect hit companies – show that the UK’s listed companies saw revenues fall for the second quarter in a row.
Combined revenues fell by 2.4 per cent with the greatest impact coming from the oil sector, which suffered from lower oil prices even before the price war began, as well as banks and utilities.
Pre-tax profits plunged 29.8 per cent year-on-year as a result, intensifying the UK’s earnings recession in the run-up to Covid-19’s impact hit, according to Link.
Susan Ring, chief executive of global corporate markets, author of the Link report, said: “The pandemic has huge social and economic consequences. It is impossible to value companies accurately until investors can nail down with greater certainty the severity and duration of the disruption, and work out how effective the policy response will be from governments and central banks.”
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