UK profits hit fresh record high

UK-listed companies saw their profits hit new highs in the first quarter of 2018, according to the latest Profit Watch report from The Share Centre.

Profits hit a record £153.8 billion last year and UK plc sales climbed 20.8 per cent to a three year high of £1.33 trillion. 

-The pound’s ‘Brexit slump’ has failed to boost the UK economy

This high is the result of a strong global economic expansion together with positive exchange rate effects, which have boosted UK multinationals. 

The report states that companies enjoyed expanding profit margins, with a particularly strong contribution from the mining and oil sectors.  

But other industries have done well too. Four-fifths of sectors saw higher profits, including domestically sensitive ones, according to the report. 

Helal Miah, investment analyst at The Share Centre, says: ‘UK plc has delivered the strongest set of results in years, extending a period of growth not seen since the recovery in the immediate aftermath of the recession and financial crisis.’ 

Miah adds that while home-grown companies have not matched their international peers, they too have done well. But, he warns that looking ahead, profits are unlikely to hit another new record, due to the pound’s recovery over the past year or so. 

‘In the year ahead, the global economy will provide an even more supportive backdrop, though it may be hard to top the latest record profit. The pound is stronger now against the dollar, which will create a headwind for revenues and profits translated back into sterling.’ 

While the UK is experiencing sluggish growth, and falling confidence throughout Brexit negotiations,Miah concludes that UK companies continue to grow thanks to their opportunities to expand business abroad.

But domestically, the outlook is less rosy. The UK’s GDP only grew by 0.1 per cent in the first quarter of 2018, according to the latest figures from the Office of National Statistics. 

This GDP reading was below many forecasts, including the Bank of England’s own, of 0.3 per cent growth. 

Keep up to date with all the latest financial news and investment tips by signing up to our newsletter. Email subscribers will also receive a free print copy of Money Observer magazine.  


Subscribe to Money Observer magazine

 

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
By submitting this form, you accept the Mollom privacy policy.