Profits of UK's largest companies hit record high

UK-listed companies' profits broke a new record for the first time in seven years thanks to rising oil prices, a new report reveals.

According to a study by The Share Center, profits of British companies on the main stock market reached 217.9 billion pounds in the last 12 months.

This breaks the all-time record of all time in 2011.

For the first time, all publicly traded companies generated a turnover of just over £ 2 trillion.

Although the record is up, UK plc earnings growth this year should now be weaker than expected.

The market is experiencing a median or typical earnings growth of 5.4% this year, down from 6.7% three months ago.

Helal Miah, investment badyst at The Share Center, said: "Two warnings underscore the good news of the latest figures released by UK companies. First, much of the current earnings growth is of relatively low quality as it largely reflects the impact of rising oil prices, which are beyond the control of individual companies.

"Second, earnings growth has been concentrated on a reduced number of companies, indicating that many companies have difficult market conditions."

Among the big winners in the last 12 months is the oil sector, which generates the most revenue on the UK stock market.

Oil prices went from $ 50 a year ago to about $ 80 being negotiated, which has boosted the industry and companies such as BP and Royal Dutch Shell.

Consumer goods and housing construction also performed well, while utility revenues were pushed up by rising energy prices.

But the situation was less optimistic for the mining sector, which suffered from global trade tensions. The sector has recently been one of the main drivers of growth for the British company, but revenues have been stagnant in the most recent results.

At the same time, much-publicized high street pressure affected the retail sector, where profits fell by 35%.

Mr. Miah added that the uncertainty surrounding Brexit is holding back British listed companies.

"It is also clear that the UK stock market looks cheap compared to its global counterparts and its own medium-term average," he said.

"A key factor is the uncertainty caused by Brexit, which has resulted in a slowdown in economic growth and a reduction in the weighting of international investors relative to UK equities."

Press Association