MAJOR UK-listed companies achieved an overall surge in annual profits to a fresh record amid strong global growth and firmer commodity prices, with overseas revenues boosted by sterling’s weakness, a survey has shown.
However, within this group, companies with a greater focus on the UK market posted a far less spectacular overall rise in profits than players with big overseas operations.
The Profit Watch survey, published by The Share Centre, shows the profits of “UK plc” surged by 158 per cent to a record £153.8 billion. The Share Centre noted this was 0.2 per cent ahead of the previous high back in 2011, flagging a “strong improvement” at Royal Bank of Scotland as well as sharp rises in the profits of oil and mining companies.
The Share Centre analyses raw data from the financial reports of the UK’s largest 350 listed companies, excluding equity investment trusts. Its latest report analyses financial data for companies with year-ends up to December 31 2017, and which reported annual results up to March 31 this year.
Half of the top 350 UK-listed companies posted annual results during the first quarter, including the largest multinationals, The Share Centre noted. It pointed out the first quarter was “the most important reporting season by far” for annual results.
Companies’ sales showed an overall rise of 20.8% to £1.33 trillion, a three-year high which took them within touching distance of a record set in 2012.
The Share Centre said that multinationals’ revenues rose 30.1% year-on-year in sterling terms, equivalent to 21.9% on a constant-currency basis. It cited sterling’s weakness against the dollar during 2017.
By contrast, companies reporting in sterling, most of which have a “much greater dependence on the domestic market”, saw a 3.6% increase in sales, it noted.
The Share Centre added that mid-caps, which overall have a greater domestic emphasis, saw revenue growth of 13.3%, compared with 22.3% for companies in the top 100.
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