25th Oct 2018 09:55
LONDON (Alliance News) - RPS Group PLC on Thursday said it expects a decrease in profit in 2018 as it shifts the business from a conglomerate of small units to a "truly global firm".
The stock was trading 29% lower on Thursday at 147.80 pence each following the announcement.
The professional services firm said fee income in the three months to the end of September totalled GBP139 million, down slightly from GBP141 million reported for the same period a year earlier.
Pretax profit for the period came in at GBP12.8 million, down from GBP14.3 million a year before and below RPS management's expectations.
For the nine months ended September 30, fee income was GBP428 million, up from GBP422 million year-on-year and in line with board expectations. Pretax profit declined to GBP40.1 million from GBP41.5 million.
As a result, for the full year, RPS Group expects fee income to grew slightly year-on-year, with pretax profit falling slightly below the prior year's figure. In 2017, RPS record at pretax loss of GBP1.6 million on fee income of GBP562.3 million.
Looking forward, RPS said necessary investment in the business will impact its profit in 2019. RPS expects its costs to grew by GBP2.5 million year-on-year in 2019 and said it will incur one-off global brand relaunch expense totalling GBP2.0 million.
"RPS is going through a fundamental shift from being a conglomerate of small consulting and service businesses providing local expertise, to a truly global firm that uses its expertise to deliver professional services around the world," explained Chief Executive John Douglas.
"We are confident that these changes will drive increased shareholder returns in the medium term," added Douglas.
The company said it will publish its final results for2018 in February next year.
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