Profits at listed British companies surged in the last 12 months as the UK’s biggest firms boosted revenues, according to data published today.
UK firms listed on the main market of the London Stock Exchange earned £210.8bn in the 12 months to the end of June, the analysis by the Share Centre shows – an 86 per cent jump year-on-year.
Revenues across all main market-listed firms rose by 13.6 per cent to £1.97 trillion, in spite of a somewhat stronger pound reducing the sterling value of revenues in other currencies, which account for a large proportion of the earnings of the UK’s multinationals.
Profits have nearly tripled in the last two years, as rising commodity prices have boosted the FTSE 100’s large mining contingent and British banks have returned to reporting big earnings following years of massive regulatory fines. Bank and financial profits in the year to the end of June were £18bn, on revenues of £175.2bn.
The latest figures were distorted by the large profit boost from British American Tobacco’s acquisition of US rival Reynolds, but even stripping out that factor profits still rose by 66 per cent year-on-year.
No single sector reported lower sales year-on-year, although the Share Centre noted the retail sector had weighed on profits outside the top 40 biggest firms in the last quarter.
Second-quarter earnings rose by 12.4 per cent year-on-year, with revenues 5.5 per cent higher, the Share Centre found.
Despite the strong growth in the last year, Helal Miah, investment analyst at the Share Centre, said the picture since the financial crisis is “sobering”. An extra £703bn in revenue growth since 2007 has only given British firms an extra £31bn in profits.
However, July results, which are not included in the data, “look encouraging” for future earnings, Miah said.
“The outlook is positive, and the slowdown in expected earnings growth is only natural after such break-neck expansion,” he added.