20th Sep 2019 11:57
(Alliance News) - Parity Group PLC sunk to an interim loss, the company reported on Friday, following increased operating costs as the firm embarks on a transformation programme.
Shares in the data technology consultancy were down 8.8% in London on Friday at 7.07 pence each.
In the six months to June 30, Parity swung to a pretax loss of GBP541,000 from a GBP847,000 profit the year before.
The company's revenue, however, grew 3.0% to GBP44.5 million from GBP43.2 million the year before.
"Due to changing client demand we are moving Parity's focus from a single line of business dependent upon relatively low margin recruitment revenues into a multi-line business built around consultancy, learning and development and strategic recruitment in the data world," said Chief Executive Matthew Bayfield.
Parity said phase one of its "comprehensive transformation programme" started in March. As a result, the company's operating expenses increased 6.2% to GBP44.8 million from GBP42.2 million.
Parity attributed the higher operating costs on specific restructuring costs, which included a 35% reduction in headcount and office relocations. The company noted the restructuring has led to a decline in annualised gross operating costs.
Bayfield continued: "The restructuring programme that we embarked upon earlier in the year has gone deeper into the organisation and has had to be more comprehensive than we originally anticipated. This more comprehensive transformation programme has had an expected impact on our short term gross revenue, however we are seeing the first signs that the plan will deliver higher margins and robust profitability in the medium term."
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