UK Company Profits Weaken in Final Months of 2011: ONS

British private, non-financial corporations posted a lower net rate of return in the fourth quarter of 2011, an indication of a relatively weak profit margins, the Office for National Statistics said Wednesday.

The net rate of return rose slightly to 10.9 percent from the estimate of 10.8 percent in the previous quarter.

However, the other financial position indicators in the UK National Accounts suggest that non-financial sector has not experienced the quite setback which is revealed by net rate of return figures, said the Office for National Statistics (ONS).

The estimated net rate of return for manufacturing companies in the fourth quarter remained unchanged at 4.9 percent from the previous quarter. The unchanged output prices and higher input costs pulled down the estimated net rate of return for service companies to 15.6 percent, lower than 2011 average rate of 15.9 percent and lowest since the 2010 Q4.

The estimated net rate of return for other than United Kingdom Continental Shelf (non-UKCS) companies in the fourth quarter was 9.2 percent, slightly higher than the revised estimate of 9.1 percent in the previous quarter, whereas the net rate of return for UKCS companies increased to 58.1 percent from a revised estimate of 57.3 percent.

The profitability in the UKCS sector was mainly driven by higher oil and gas prices and increased sales volumes.

"Though consumer spending environment remained challenging due to uncertain economic environment and financial crisis of euro area resulted in difficult trading conditions for corporate sector, business to business activity was comparatively strong," the ONS said.