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Highlights
- According to a new survey conducted by trade body Make UK, the manufacturing sector of Britain is facing a crisis.
- A request for payment holidays on loans has been made to the Government by the leading industry trade body to provide some relief to the manufacturers.
- The current supply chain meltdown is bound to create gaps on supermarket shelves ahead of the holiday season.
Amid a swift increase in prices and rising debts, manufacturers in the UK are being pushed over the brink, according to the results of a new survey conducted by Make UK. The trade body, along with the accountancy firm RSM, surveyed over 200 company finance directors, of which 48% were facing problems in delivering on their order commitments along with the escalating supply chain issues. The growth plans of 65% of the companies are obstructed due to shortage of cash.
Also, liquidity crunch has made around 38% companies to approach restructuring, turnaround, or insolvency professionals, as per the survey results.
A request for payment holidays on loans has been made to the Government by the leading industry trade body. This has given a signal that the business models of thousands of companies could become unviable as they are on a tipping point, as per the organisation’s senior economist James Brougham.
Why Britain’s manufacturers may be staring at a crisis
In addition to factors like supply chain disruption, soaring energy costs, and HGV drivers’ shortage, the manufacturing sector in the UK has been dealing with a combination of other factors, such as cost crunch, cash, and post-Covid credit, which have altogether created a lot of burden for the UK’s factories, according to Make UK. Firms have been facing a lot of troubles in repaying their debts, but they are still taking on huge debts to survive the ongoing crisis.
RELATED READ: How supply chain meltdown can affect your Christmas feast
With Brexit being a major reason, the current supply chain meltdown in the UK is bound to create gaps on shelves in supermarkets ahead of the festive season. Here are 5 UK stocks that may be impacted due to the ongoing crisis ahead of the holiday season.
Source: Copyright © 2021 Kalkine Media
WH Smith Plc (LON: SMWH)
WH Smith plc’s current market cap is £1,716.21 million. It has given a negative return of 3.87% to its shareholders in the last one year. WH Smith plc’s shares were trading at GBX 1,399.50 at 2:59 PM on 29 November 2021 (GMT).
JD Sports Fashion PLC (LON: JD)
JD Sports Fashion PLC’s current market cap is £11,368.53 million. It has given a return of 56.23% to its shareholders in the last one year. JD Sports Fashion PLC’s shares were trading at GBX 1,145.50 at 3:01 PM on 29 November 2021 (GMT).
Frasers Group PLC (LON: FRAS)
Frasers Group PLC is a UK-based retail and intellectual property group which sells sports and leisure clothing, footwear, equipment, and apparel. The current market cap of the FTSE250-listed company stands at £3,440.13 million. It has given a return of 56.75% to its shareholders in the last one year. Frasers Group PLC’s shares were trading at GBX 699.50 at 3:05 PM on 29 November 2021 (GMT).
RELATED READ: Is it the right time to buy Christmas stocks?
Dunelm Group plc (LON:DNLM)
Dunelm Group plc’s current market cap is at £2,763.16 million. It has given a return of 15.29% to its shareholders in the last one year. Dunelm Group plc’s shares were trading at GBX 1,365.00 at 3:05 PM on 29 November 2021 (GMT).
Card Factory PLC (LON: CARD)
Card Factory PLC’s current market cap of the company stands at £171.62 million. It has given a return of 15.38% to its shareholders in the last one year. Card Factory PLC’s shares were trading at GBX 50.90 at 3:08 PM on 29 November 2021 (GMT).
