Firms that reported annual results between January and March of this year – the most important reporting season of the year – saw their combined revenues climbed 4.2 per cent on a like-for-like basis to just over £1.1 trillion, according to the latest Profit Watch UK study from The Share Centre.
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The report shows that sterling’s weakness after last June’s Brexit vote provided support, with multinationals and exporters benefiting.
Margins expanded, pushing operating profits up 23.4 per cent – the fastest rate since 2010. Pre-tax profits rebound 21.5 per cent, boosted by the weaker pound, improvements from oil and mining companies and lower asset write-downs.
Miners and banks are the second and third largest sectors in the UK, after oil, and these saw sales grow. In the mining sector, most companies reported higher revenues, up 5.9 per cent collectively to £174 billion, though this was thanks to an exchange rate boost of some £18bn.
Banks’ revenues also rose, climbing 9.6 per cent to a combined £168bn, with Lloyds Banking Group supported by fair value adjustments on investments held, and HSBC and Standard Chartered boosted by the devalued pound, the report notes.
Helal Miah, investment research analyst at The Share Centre, said: “The picture of UK plc’s health was heavily airbrushed by the positive effects of a weaker pound.”