17th Mar 2016 10:39
LONDON (Alliance News) - Parity Group PLC Thursday said its loss was wider in 2015 than in the previous year following the change in strategy, but said the improved performance in the second half of the year has continued into 2016.
The UK-based IT and consultancy service business said its pretax loss in 2015 amounted to GBP3.9 million following a decline in revenue, widening from the GBP408,000 loss booked in the previous year.
On an underlying basis, which excludes exceptional items, Parity squeezed out a pretax profit of GBP143,000, but that was significantly down from GBP406,000 the year before.
Revenue in 2015 dropped to GBP84.8 million from GBP92.3 million, with non-recurring costs totalling GBP2.1 million being the main driver of the wider loss in the year, of which GBP2.0 million was booked as a goodwill impairment.
Parity said 2015 was a year of "significant change" for the business as it exited its digital acquisition strategy and launched its new growth strategy that builds on the company's core profitable businesses of Parity Professionals and Parity Consultancy.
It was a year of two halves for Parity, as revenue was higher and costs were lower in the second half than the first. First half revenue amounted to GBP41.2 million with group costs of GBP821,000 whilst the second half generated revenue of GBP43.7 million with lower costs of GBP676,000.
To put that into further perspective, earnings before interest, tax, depreciation, amortisation and exceptional items for the year amounted to GBP1.6 million, a smidgen down from last year, with GBP1.2 million being generated in the second half compared to the GBP384,000 in the first.
The reduction in costs between the first and second half were thansk to Parity's GBP1.0 million cost reduction programme.
The main Parity Professionals division, which specialises in sourcing staff for other companies, comofrtably remained the biggest revenue driver in the year, contributing GBP78.2 million in the year, which was down from GBP84.5 million in 2014.
The division, which was known as SuperCommunications prior to the change in strategy, had a better second half and Parity said this has continued in the first two months of 2016, with the overall drop in revenue in 2015 due to the restructuring and the loss of a major contract.
"2016 has started with the strong momentum carried forward from the second half of 2015 and the executive management team, and all of the Parity staff, are focused on building profitability, ensuring the core business remains cash-generative and value enhancing for shareholders," said the company.
The second division, Parity Consultancy Services, focuses on providing "niche expertise" on technology to companies and reported revenue of GBP6.7 million in 2015 compared to GBP7.8 million the year before.
Parity said its net debt rose in the year to GBP7.4 million from GBP6.6 million at the end of 2014, with cash falling to GBP2.7 million from GBP3.0 million. Parity said it has reviewed its funding arrangements and is satisfied the company is sufficiently funded "for the foreseeable future".
Parity shares were trading up 3.4% to 11.50 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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