Totally plc, a provider of frontline healthcare services alongside corporate fitness and wellbeing services, has slipped to a pre-tax loss while revenues have fallen. According to preliminary results for the 12-month period ended 31 March 2024, revenue at the Derby-based firm dipped by 21% to £106.7 million, from £135.7 million in the year prior. Meanwhile, in a year where Totally let go some of its team, as it right sized structures, the company slid to a loss before tax of £3.9 million, from a profit of £1.8 million for the year prior. Looking ahead, the business expects revenues for the year ending 31 March 2025 to decline further, to £85 million.

Simon Stilwell, Chairman, said: “It was undoubtedly a difficult year for the Group but the actions on costs, structure, internal process and financial controls taken in the second half of the year have seen a stabilisation in the business.

“As we look to the year ahead, we are a stronger organisation with clear accountability and improving performance.”

Pre-tax profits have fallen while revenue has risen at Breedon Group, the construction materials group. According to unaudited results for the six months ended 30 June 2024, revenue increased by 3% in comparison to the same period of last year to reach £764.6m. This was supported by Breedon’s entry into the US. Pre-tax profits, however, were down by 18%, at £46.5m, as the macroeconomic and political landscape in Great Britain continued to present significant headwinds, exacerbated by challenging operating conditions created by wet weather.

Looking ahead, Breedon expects growth in all its markets from 2025 as the economic and political landscape stabilises.

Rob Wood, Chief Executive Officer, said: “For the team to deliver such a resilient performance given the challenging GB market conditions we have faced is an incredible achievement.

“We achieved a major strategic objective in March, entering the US and establishing our third platform with the transformative acquisition of BMC, creating the foundation from which we will build out our US business.

“We expanded our routes to market, delivering two bolt-on transactions in GB, and growing organically through our downstream businesses, pulling through more of our own material. 

“We moved our sustainable growth strategy forward on all fronts in the first half of 2024 and were pleased to see this recognised by CDP with our first ratings placing us at the forefront of our sector for Climate Change and Water Security.

“During this time the quality and flexibility of the Breedon team, of whom I am incredibly proud, have kept us close to our customers, accelerated our drive for efficiencies, and strengthened our operations. As the economic and political clouds clear in GB, our markets will return to growth in time and we will be well placed to grow and succeed.”

The number of monthly company insolvencies in England and Wales has soared in June, after a surprise fall in May, but it may not be all bad news for struggling Midlands businesses as new government figures highlight a growing quantity able to be rescued rather than wound up. This is according to the Midlands branch of insolvency and restructuring body R3 and follows monthly statistics published by the Insolvency Service which show that corporate insolvencies increased by 15.7% in June 2024 to a total of 2,361 compared to the previous month’s total of 2,040, and by 17.1% against June 2023’s figure of 2,016. The research also shows that monthly corporate insolvencies increased by 49.5% from June 2022’s total of 1,579, and by 61.1% compared to the pre-pandemic level of 1,466 in June 2019. R3 Midlands Chair Stephen Rome, a partner at law firm Penningtons Manches Cooper in the region, said: “The rise in corporate insolvencies is driven by an increase in Creditors’ Voluntary Liquidations, which is a process usually used by smaller businesses and can be driven by cashflow problems or difficulties with access to finance. “These latest statistics also show that compulsory liquidation numbers have risen to their second-highest level since January 2021, suggesting that creditors are taking a much tougher stance this financial year. “But there are some positive signs in these figures for local businesses. Company Voluntary Arrangement and Administration numbers have increased compared to last month, and Administration numbers are higher than this time last year and in June 2019, indicating a growing number of businesses for which this is an option, and which have secured creditors willing to support rescue proposals. “The reality, however, is that businesses are still trading amid high costs and cautious consumer spending. Despite recent data pointing to economic growth and falling inflation, it seems that the improvement has come too late for some. “While retail sales rebounded in May, they are still down year-on-year, and restaurant spending fell again last month as consumers continued to be cautious with discretionary spending. “These sectors have struggled since the start of the year and have yet to bounce back from a disappointing pre-Christmas trading period, so we may see insolvency numbers increase in the Autumn if trading conditions don’t improve. “There was positive news, however, for the construction sector, which saw growth in May after a disappointing start to 2024 and a delay in new work at the end of last year. While the uncertainty the General Election will have brought this sector is likely to impact firms and output in the short-term, the new Government’s pledges to invest in infrastructure and encourage housebuilding could reinvigorate two key markets for this industry if they come to fruition. “It’s also worth noting that many local businesses continue to be positive about the future, with lower inflation and the prospect of higher sales and profits boosting their confidence about the coming months, but we’ve yet to see the full impact of the General Election on the economy and purchasing decisions, and, despite their optimism about the future, organisations remain concerned about customer demand, staff turnover and meeting their regulatory requirements.”

Listed companies in the Midlands issued 15 profit warnings in the first half of 2024, an increase of 15% on the same period in 2023, according to the latest EY-Parthenon Profit Warnings Report. Companies in the Midlands issued six warnings in Q2 2024, down by a quarter on Q2 2023 when eight warnings were issued. This is the region’s lowest quarterly total since Q1 2023, when five warnings were issued. Nationally, in Q2 2024, the number of profit warnings issued by UK listed companies fell 26% compared with Q2 2023, with 49 warnings issued – the lowest quarterly total since 2021. Despite a decrease in the number of quarterly profit warnings, the proportion of UK listed companies issuing a warning over the past year stands at 18.4%, exceeding the peak level observed immediately after the 2008 global financial crisis. This high level can be attributed to a significant number of ‘new’ companies issuing warnings for the first time within a 12-month period. During Q1 2024, 61% of profit warnings came from companies that had not issued one for the past 12 months, and during Q2 2024 this figure stood at 50%. Leading factors behind many Q2 profit warnings included contract issues which were cited in 29% of warnings. As companies contended with increasing labour and supply expenditure, cost pressures rose as a key factor in profit warnings for the first time in more than 12 months and were cited in more than a quarter (27%) of Q2 profit warnings. Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader, said: “An unprecedented rollcall of global elections and geopolitical risks means that an element of uncertainty remains, potentially exerting further pressure on spending and growth. We can expect the economy to continue to recover, but slowly and unevenly. “We have started to see more companies coming back to the restructuring table because they haven’t made the fundamental changes needed to adapt their operations and balance sheets to new demand, cost and competitive realities. Refinancing is a growing risk, with many companies surprised by the added levels of due diligence and time needed to refinance in this market. “We expect all of this to drive a slow uptick in restructuring, but without necessarily a big upsurge in administration appointments, as more companies tackle their issues through restructuring plans and consensual agreements with creditors. The profit warning cycle may have turned, but we are at the start of the restructuring one.” FTSE Industrial Support Services accounted for more than a fifth of all warnings in Q2 2024 While overall profit warnings fell in Q2 2024, there were a number of sectors where warnings remained high, revealing persistent and developing challenges. Companies within FTSE Industrial Support Services, which encompasses business service providers, industrial suppliers and recruitment companies, issued 10 warnings in Q2 2024, accounting for 20% of all UK profit warnings during the period. Of the 19 warnings issued by the sector in 2024, eight have come from business services providers, seven from recruitment and training companies and four from industrial suppliers. Warnings were also seen across FTSE Software and Computer Services (5), Retailers (4), Household Goods and Home Construction (4) and Finance and Credit Services (3). In the Midlands, companies operating in Consumer Discretionary FTSE sectors continued to issue the highest number of warnings (eight), making up 53% of the region’s total warnings in H1 2024. Dan Hurd, EY Partner, Turnaround and Restructuring Strategy based in Birmingham, said: “The FTSE Industrial Support Services sector is heavily reliant on business and public sector spending and is particularly vulnerable to economic fluctuations and cost-cutting measures. With 19 warnings so far in 2024, companies have cited decreased sales, challenging contract negotiations, and budgetary pressures as key concerns. “Cost increases in labour, equipment, and debt, alongside necessary investments in supply chain improvements and new technologies, have compounded the financial strain. Recruitment companies, as business confidence indicators, have notably issued 12 profit warnings in the last 12 months. “The sector’s challenges are exacerbated by complex outsourcing contracts and cost inflation, with nearly half of the warnings in H1 2024 mentioning higher costs. Companies are therefore having to actively manage the risks on existing contracts whilst learning from the past and trying to avoid the pitfalls of overly aggressive pricing strategies on new work.”