Interim Management Statement

RNS Number : 4002R

Parity Group PLC

03 November 2011

 



Parity Group plc ("Parity" or the "Group"),

Interim Management Statement, 3^rd November 2011

Parity Group plc, the UK IT services group, today issues its Interim Management Statement for the period from 1^st July 2011 to date.

Group Trading

As indicated in its Half Yearly Financial Report issued on 16 August 2011 the Group is continuing its stated strategy for 2011 of consolidation and cost saving, whilst in parallel progressing its move into new growth markets.

The Board is pleased to report that the Group remains on target to meet its expectations this year in a difficult market for IT services; and has made good progress in both consolidating the past restructuring and progressing the new initiatives towards the adjacent growth markets identified in the recent Fundraising Prospectus in May of this year.

Operations

The programme to exit from the Group's out-sourced IT contract will be completed in December, resulting in a saving of over £500,000 per annum in future years, for a one-off cost this year of about the same amount.

Parity Resources continues to increase its involvement in the private sector to balance the cutbacks in public spending.  Total contractor numbers have risen recently for the first time this year.  Parity Resources has opened a City sales office in Shoreditch, which is also the base for the Group's new digital media initiatives under the Parity Digital banner.

Parity Systems has stabilized after last year's major cost-cutting exercise.  The last remaining problem fixed-price contract has been successfully completed.  The business has made good progress in its new partnership initiative, attracting encouraging interest from several global product vendors. 

Parity Talent Management has seen some deferral in graduate training projects in Northern Ireland due to public spending cutbacks; but is making progress bringing its much-needed talent management training services into Great Britain, winning initial orders from two new customers.

We have recently reached agreement with Invest Northern Ireland ("InvestNI") - to create, with their support, an R&D Technology Laboratory ("TechLab") in Belfast, to develop know-how and Parity's own intellectual property.  The first project definition phase starts in January and is intended to lead to a long-term venture to be sponsored by InvestNI.  Parity has had a presence in Belfast for over twenty years and it is the centre for our prestigious graduate development business.

Future Prospects

Digital Agency

Work is progressing on the Group's plans to enter the growing market for emerging digital technology skills in the media world, as outlined in the recent Prospectus.  We intend to acquire digital agency capability to link to both Parity Systems and our new Techlab venture.

1-Parity

In addition to the current Parity Resources business, 1-Parity is a new joint offering created with Parity Systems, offering global product vendors a Virtual Workforce to support their sales to SMEs in the UK.  This is based on senior Parity Systems staff backed up by communities of approved and specifically trained freelance associates with niche skills.

Parity Talent Management

Parity Talent Management's marketing activities in Great Britain have seen it win initial orders from two new customers and are expected to bear greater fruit next year; based on the developing relationships with universities which have already led to important bidding opportunities.

TechLab

TechLab is a long term venture, in partnership with InvestNI, marketing both licensed products and in due course the Group's own developed intellectual property.

Outlook

Overall, although the economic outlook is uncertain the Board remains confident in its strategy to significantly improve shareholder value by targeting a focused number of niche growth markets for its new and improved services.

Board changes

As announced separately today, the Group is pleased to announce the appointment of Mike Phillips ACA as a non-executive director.  He is currently Chief Financial Officer of Micro Focus plc, a FTSE 250 software company and was previously Chief Executive Officer of Morse plc.  Mike will take over the Chairmanship of the Audit Committee from Nigel Tose, a non-executive director since 2006 who has indicated that he wishes to leave the Board in line with the Group's corporate governance policy on rotating non-executive director appointments. The Board would like to thank Nigel for his significant contribution over the past five years.

Earlier in the year David Courtley, currently Chief Executive Officer of Phoenix Group plc, became a non-executive director of the Group and made a significant investment at the time of the Placing. 

The Board intends to further increase its independent non-executive representation in due course.

Auditors

In line with good corporate governance, the Board has decided to review its audit and advisory arrangements and has decided to appoint KPMG Audit plc as auditors of the Group.  KPMG Audit plc will take over immediately and will become our auditors for the year ended 2011.  The Board thanks BDO LLP for their valuable assistance in recent years.

For Further information, please contact:

Parity Group plc                           [phone]

Paul Davies, Chief Executive

Singer Capital Markets               [phone]

Shaun Dobson

MHP Communications               [phone]

John Olsen / Ian Payne

 

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