You are here: Home - Investing - Experienced Investor - News -

UK-listed firms post weakest performance in three years

Written by:
UK plc posted its weakest set of results in three years during the second quarter of 2019 – and the figures would have been worse had it not been for the weak pound.

Revenues of companies listed on the UK main market grew by 1.6 per cent in the three months to June, while profits rose by 3.1 per cent, according to the latest Profit Watch UK report from investment firm, The Share Centre.

The report blamed the weak performance on a slowdown in the world economy, compounded by a deteriorating picture at home, and said growth was only made possible by a lower exchange rate, which boosted the sterling value of revenue and profit earned overseas.

There was a notable divide between the big multinational companies, which generate most of their earnings abroad, and more domestically exposed firms.

While the biggest 40 listed companies managed to grow slightly, firms outside this group – which tend to have a greater exposure to the UK economy – saw revenues fall for the first time in five years.

The biggest 40 stocks posted profits of 13.3 per cent, while firms outside the top 40 saw profits slump by almost a third, the fifth consecutive quarter of declines.

Richard Stone, chief executive of The Share Centre, said: “Profit growth has become increasingly dependent on a narrower group of companies over the last year. The increasingly sharp divergence between the multinationals and those more dependent on the domestic UK market is part of this picture.”

He added: “UK plc has endured a painful margin squeeze. Part of this reflects the structurally tougher economic conditions experienced since the pre-crash boom years ended in 2007 but it also reflects regulatory change, particularly in the financial sector. Another contributing factor is disruption in a number of industries from new competitors or new technologies.”

Over the last 12 months, companies have made £2.04trn in sales and generated profit of £192.5bn on those sales – a margin of 9.5 per cent. This is in line with the average for the last 18 months but below the seven-year high reached just under a year ago, and well below profit generated in 2007.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week