The number of profit warnings issued by listed businesses headquartered in Scotland has reached a record level.
EY’s Profit Warnings report, published today, shows the number of warnings increased by 45% year-on-year in the first half of 2020.
Almost all of the 16 warnings (94%) cited the impact of the Covid-19 pandemic behind the hit to the bottom line.
Colin Dempster, head of turnaround and restructuring strategy at EY in Scotland, said: “Scotland’s performance compared with other UK locations in terms of profit warnings, reflects the types of listed companies based here.
“A large proportion of the Scottish economy has been able to adapt to lockdown conditions.
“For example, the services industry has been able to shift to virtual ways of working easier than other sectors where social distancing poses much more challenging conditions for operations.
“However, the oil and gas sector is also a key component of Scotland’s economy and has experienced a particularly challenging time across the supply chain due to a significant fall in both demand and the oil price. This is likely to have a subsequent impact on the wider business landscape.
“It’s vital that businesses in Scotland don’t underestimate the depth and extent of the immediate and long-term challenges ahead.”