The pandemic caused a record decline in UK plc revenues, down £349bn or 19% in the first 12 months covering the outbreak (April 2020 to March 2021).
The impact was deeper and more widespread than any downturn in recent history, as more than half of all listed UK companies saw sales fall.
Lower sales meant a substantial fall in profits – down 61% in the first 12 months of the pandemic.
The most recent company results show the bounce-back began even as lockdowns continued.
Active investment manager J O Hambro Capital Management anticipates that the next set of results will show a dramatic recovery. It believes that UK plc profits will double by spring 2022.
Alexandra Altinger, CEO (UK, Europe and Asia) for J O Hambro, said: “After the shock of the pandemic the change of mood in Britain’s boardrooms is palpable. The recovery is now very strong indeed: high government spending, low interest rates, strong consumer demand, resurgent employment and a buoyant housing market mean that profits are now growing very fast, much faster than market expectations.
“Surging profits are complemented by enticing valuations. All four J O Hambro UK equities teams agree that UK shares are attractively priced at present, both compared to historic levels and international peers. Valuations across the stock market appear cheap, and in some segments very cheap. Our fund managers are not simply interested in the cyclical upswing, however. They are looking for the companies that are honing themselves an edge for the long term, too. And they are finding them.”