27th Sep 2018 10:57
LONDON (Alliance News) - Impellam Group PLC said on Thursday it expects earnings for its current financial year to be below the last due to a "subdued" trading performance in some units.
Separately, the managed services provider said Chief Financial Officer Alison Wilford will leave the company on October 31 to take up the same role in a privately held company. Impellam has appointed Brian Porritt as interim CFO, a non-board role, until Wilford's replacement has been recruited.
In a trading statement, the company said its Managed Services businesses in the UK and Australia are growing ahead of expectations as is its entire US business, on a like-for-like currency basis.
However, the UK NHS market remains "challenging" due to a continued reduction in agency spend by the NHS and the impact of IR35 tax legislation, which Impellam said has "significantly contracted" the size of this market.
In addition, the last few weeks have seen reduced volumes in certain UK Specialist Staffing brands, which are exposed to the retail sector.
"The seasonal uplift that we would expect to see in the retail market after the end of the summer period has not yet happened, as many of our retail customers continue to experience difficult trading conditions. We also continue to be affected more generally by the uncertainty around Brexit negotiations," the company said.
As a result of the subdued trading performance in Healthcare and UK Retail, as well as exchange rate movements, earnings before interest, taxes, depreciation and amortisation for the current financial year is expected to be lower than in 2017.
"Despite these short term pressures on profitability we are confident that our strategy is working," Impellam said.
For the year ended December 29, 2017, Impellam posted adjusted Ebitda of GBP59.4 million.
Impellam shares were down 17% at 515.00 pence on Thursday.
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