9th Dec 2005 07:01
Parity Group PLC09 December 2005 For release at 7:00am, 9 December 2005 Restructuring Update The Board of Parity Group plc releases the following update."In the past twelve months the Company's new management has set aboutreorganising the Group following several years of poor performance in order toreturn to profitability. A new UK-centric strategy has been put in placesupported by the disposal of non-UK businesses and significant organisationalchange which is now nearing completion. The Board intends to appoint a new ChiefOperating Officer and Financial Director in the first quarter of 2006 tocomplete the rebuilding of the management team. Operationally there has been significant restructuring, with new managementappointments across the Group. Costs have been reduced both in overhead andoperational areas, serious litigation has been resolved and excess propertysublet wherever possible, a process which management is continuing. Thefinancial function has been centralised under a new Head of Finance with aconsequent improvement in both forecasting and control. Both the Staffingbusinesses have performed well in the last year. The Solutions business has beenrestructured with significant cost savings, with an improved and simplifiedsales and marketing approach concentrating on its strong capabilities. Goodbusiness has been won this year, the order book is improving and the divisionhas continued to demonstrate the recovery identified at the time of the interimresults announcement. Training has not seen any significant upturn in revenuesin the second half of the year; however the changes disclosed in Septembercontinue to be implemented to bring this division back to profitability for nextyear. The Group is also imminently to transfer to a new outsourcing supplier forits IT services at a substantially reduced cost. In summary, the outlook for the Group's overall trading performance in 2005 hasnot changed significantly since the Interim Statement in September. The Company has now been able to further assess the impact to its financialstatements resulting from the change to IFRS which will have the effect toreduce the Company's 2005 profit before taxation by some £490,000, these changesresulting from the impact of accounting for the Company's pension scheme, LTIPprogramme and stock option grants. As previously disclosed, the 2005 resultswill also reflect the write downs from the recent US disposal and the cost ofchanging the provider of outsourced IT services to the Group, which is currentlythe subject of a mediation process and therefore cannot be quantified at thistime. The Board is now turning its attention to the final element of rebuilding theGroup, namely further reduction in the level of debt. Whilst finalising the saleof the mainland European business will reduce debt and our bankers continue toremain supportive, in order to grow the business going forward the balance sheetequity must be strengthened and we will be progressing discussions withshareholders to this end." Enquiries:John Hughes, Chairman 020 7832 3500 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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