Total net profits reported during the three months to the end of March dropped 9.8% to £64.3bn, the lowest total since 2008.
Of the 30 sectors included in the report, 21 saw an overall fall in profits with only 9 recording a rise. This ratio is the worst reported since 2007.
A big factor behind the weaker numbers is of course the fall in the oil price which has hit some of the UK’s biggest companies. Oil sector profits fell £63bn.
Mining companies have also continued to struggle against low global commodities prices, losing £23bn.
Banks were the other big struggler with total profits down £24bn.
The rising pound has also been a major factor, hitting exporters by making their products and services more expensive to foreign buyers.
Mid-caps have been the strongest performers as they have been less affected by wider global trend and have benefitted from a stronger domestic economy in the UK.
“The goliaths in the FTSE 100 came under intense pressure from a potent cocktail of negative currency effects, falling oil prices and spluttering global growth in 2014,” said Helal Miah, investment research analyst at The Share Centre.
“This has taken its toll on results across the UK stock market, with company profits at their lowest level in six years,” she added.
“The worst should now be behind us. Oil prices will continue to challenge the sector, and the eurozone remains a concern. However, the pound has now fallen sharply against the dollar, which will boost the results of the UK’s largest companies and the financial sector should continue to strengthen. With the domestic economy recovering healthily, alongside real household incomes now rising, we believe profits should increase strongly, especially for mid-caps in more domestically orientated sectors.”
