Trading Update

RNS Number : 8887J

Parity Group PLC

26 August 2021

 

26th August 2021

Parity Group plc   

("Parity" or the "Group")  

Trading update

Parity, the data and technology-focussed professional services company, today announces an update on trading for the financial year ending 31 December 2021 ("FY 2021").

Trading in H1 has been impacted by underinvestment in the core recruitment solutions business over the last two years and the failure to develop a sustainable and scalable consulting business. As a consequence, the Group is revising its outlook for FY 2021 and will focus investment in the near-term on restoring capability and capacity in its core recruitment solutions business, especially in sectors where market demand is both strong and resilient.

During 2020 and the pandemic lockdown, the Group has benefited from its recurring, and predominantly public sector, contract recruitment revenues, and this, combined with a programme of cost reduction that started in 2019, has allowed the Group to benefit from a short-term reduction in losses and increased profitability. As markets have reopened in Q1 and Q2 2021 and activity has increased, it has exposed the underinvestment in the core recruitment solutions business, leaving the Group unable to take advantage of the rising tide of opportunity and vulnerable to higher attrition in its contractor workforce as contractors have sought fresh opportunities.

For FY 2021, the Group now expects revenue to be in the region of £47.6m, net fee income (NFI) to be £4.1m and adjusted EBITDA to be a loss of £100k, with a loss before tax of £750k (before non-underlying items).

Since Mark Braund was appointed as interim Executive Chairman in June 2021, the management team have undertaken a review of the business and refined the strategy to focus on and reinvest in Parity's core business of recruitment solutions; targeting in-demand skills in the data and change management sectors, where the Group has been developing a presence.

The sectors Parity is targeting remain resilient to the disruption in the wider economy and provide the business with the opportunity to capitalise on the investment it is making in people during H2 2021, leveraging its heritage to re-establish growth in a business with strong demand and in which Parity is considered a quality brand.

Alongside traditional contract recruitment, Parity aims to extend its value-added services (including Managed Services and Statement of Work) to new and existing clients, an area of growing significance as clients seek to mitigate the increasing complexity of compliance and administration of contract resources, an area where Parity has a strong reputation and is rebuilding capacity.

Mark Braund, Executive Chairman, said:

" Parity is returning the focus of the business to what it does best; providing quality and innovative recruitment solutions to meet the growing demand for highly skilled resources in the data and change management sectors of the market.

The quality of Parity's brand, the simplicity of our focus and the passion with which our colleagues are addressing this opportunity, positions the Company well to recover both the value and performance of the business. "

-ENDS-

Contacts
Parity Group PLC	www.parity.net
Mar k Braund, Executive Chairman	+ 44 (0) 208 543 5353
Mike Johns, CFO
finnCap Ltd	https://www.finncap.com/
Jonny Franklin-Adams / Simon Hicks / Fergus Sullivan/	[phone]
Tim Redfern / Charlotte Sutcliffe

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

 

END

 

 

TSTPFMLTMTJTMRB