16th Apr 2019 11:55
LONDON (Alliance News) - Staffing and consultancy business Parity Group PLC said Tuesday profit fell sharply after the loss of a major consultancy contract, despite rising revenue, as it looks to shift its operating model.
In 2018, pretax profit narrowed to GBP358,000 from GBP1.7 million the year prior, despite revenue rising 2.7% to GBP86.1 million from GBP83.8 million the year before.
Profit performance was partially held back by GBP495,000 in non-recurring charges during the period, from none the year prior. These included GBP401,000 in restructuring costs as well as pension charges and legal costs.
Adjusted pretax profit, excluding non-recurring costs, halved to GBP853,000 from GBP1.7 million the year prior. This was primarily due to the non-renewal of a large consultancy contract during the year.
"This has been a year of reflection and change for Parity", Chief Executive Matthew Bayfield said.
"As client and market needs changed, we experienced real challenges that questioned our approach. We responded with a roadmap for a new operating model that includes new service lines, a clearer emphasis on consistent and integrated relationship management and a stronger brand and communication to the market."
Parity did not propose a dividend. The firm will keep its payout policy under review, however.
"Our strengths in financial management have enabled us to reduce debt and continue to generate cash and, together with a positive initial response from clients to our new offer, this gives us confidence for the future", Bayfield added.
Net debt reduced almost a third to GBP1.1 million from GBP1.6 million the year before.
Chair John Conoley added: "Trading remains in line with expectations and the board's confidence in the refreshed strategy is reflected in its continuing investment. Alongside a strengthening of senior talent, we have the foundations for growth in the coming years."
Shares in Parity were 7.6% lower on Tuesday at 7.25 pence each.
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