18th Dec 2019 10:06
(Alliance News) - Staffline Group PLC on Wednesday expressed optimism for the year ahead despite its performance being below expectations so far in 2019.
The stock was 23% lower in London in morning trade at 82.00 pence a share.
In addition, the recruitment and training company said it appointed Daniel Quint as interim chief financial officer, with immediate effect. He is replacing Mike Watts, who has stepped down, also immediately.
Quint was most recently interim CFO at AIM-listed Young & Co's Brewery PLC. Prior to this, he spent three years as CFO of SPIE UK, the energy, safety and environmental solutions provider.
"I would like to personally thank Mike for all his efforts," said Chief Executive Chris Pullen. "I am however, pleased to welcome Daniel to Staffline, who has the necessary skills and experience to oversee our finance function while we seek a permanent CFO."
Turning back to operations, Staffline said it expects to deliver adjusted operating profit - which excludes interest, tax and non-underlying charges - of between GBP10 million and GBP12 million for 2019. A year ago, the AIM-listed company generated underlying pretax profit - which excludes amortisation of intangible assets arising on business combinations and other exceptional costs - of GBP36.0 million.
Staffline explained that it has identified accounting errors in its 2018 results, relating to costs which were not correctly booked. The company said this had led to a GBP4 million overstatement of profit.
By division, Staffline said its Recruitment unit performed below its expectations so far in the fourth quarter of 2019, with lower-than-anticipated demand from end customers. During November, customer demand was down 16% year-on-year, the company noted, amid high levels of consumer uncertainty across the UK.
Whilst trading in December has improved, Staffline said, it is still below expectations.
More positively, the company said it now has 1 million live candidates on its platform compared to 230,000 at the same time in 2018. Staffline said it plans further recruitment process in 2020 to improve its customer service and reduce operating costs.
In the PeoplePlus division, the company said it has experienced "significant growth", however, its performance in the final quarter of 2019 still lagged forecasts. This was due to "the impact of the general election purdah" on short-term procurement opportunities in the UK, Staffline said.
Looking ahead, the company said it expects future growth in PeoplePlus after its operating profit in October in November hit GBP1 million.
"It has been a most challenging year for Staffline," said Pullen.
He added: "Despite this we have developed two robust market leading businesses which are well set as platforms for future growth. We remain optimistic about future potential of the group with the challenges of 2019 behind us."
By Evelina Grecenko; [email protected]
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