Faced with an array of obvious and imminent pressures, from higher costs to slumping demand, UK-listed companies have struck remarkably positive tones in their half-year results – but analysts are torn over how reliable those noises will ultimately prove.
The number of companies forced to issue profit warnings rose by 66 per cent in the first half of 2022, according to EY-Parthenon data released last month. Cost and supply chain issues were blamed for the increase, and the consultancy predicted that “more underlying stresses” would soon be exposed.
So far, however, many of these pressures have yet to surface. Throughout the summer results season, management teams from a broad range of industries have boasted of their ability to pass on higher costs to their customers, while demand has also proved relatively robust, in spite of consumer confidence gauges sitting at record lows.