Parity Group PLC Trading Statement (1206I)
March 31 2020 - 2:00AM
UK Regulatory
TIDMPTY
RNS Number : 1206I
Parity Group PLC
31 March 2020
PARITY GROUP PLC
TRADING UPDATE
Parity Group plc ("Parity" or the "Company"), the data and
technology focussed professional services business, provides an
update on the publication of its 2019 full year results and a
trading update.
The Board of Parity is mindful of the recent requests from the
FCA and the Financial Reporting Council for companies to delay the
reporting of their financial results and following consultation
with its auditors, the Board has decided to postpone the
announcement of its annual results for the year ended 31 December
2019, which the Company had intended to announce today, 31 March
2020. Whilst Parity's audit process for the 2019 full year results
is substantially complete, the finalisation of the audit process is
currently being delayed by issues related to COVID-19. We will
continue to follow the regulator guidance, whilst completing the
final steps of our audit, in preparation for a new release
date.
The information in relation to the Company's performance in 2019
remains as reported on 14 January 2020, namely that;
" Trading during the second half of 2019 has been as anticipated
and expectations for full year adjusted profit before tax remain
unchanged.
Cash collections were exceptionally strong during December 2019.
As a result, the Group now expects to show a net positive cash
position at the year end. At the 31 December 2018 the Group had a
net debt position of GBP1.1m."
Trading in 2020 and outlook
With COVID-19 becoming a global pandemic in March 2020, the
Board has been closely monitoring the outlook for the Company.
Significant uncertainties as to the severity and length of the
pandemic make it impossible, at this time, to accurately forecast
trading in the current financial year. However the Company has
undertaken measures to protect itself from a potential downturn in
revenues which, combined with significant cost savings already
achieved in 2019 of a gross annualised GBP3.3m, will help shield
the business from a downturn. Since the year end we have instigated
further organisational design and process mapping work that will
deliver additional savings in 2020.
In addition, and in direct response to the COVID-19
pandemic:
-- Management have agreed an across the board 20% reduction in
salaries with all Directors and staff for the three months starting
1 April 2020.
-- We are conducting a daily review of COVID-19 impacts with
clients and contractors to assess supply and demand in as close to
real time as possible. This review process is designed to give us
the advanced warning required to be able to manage impacts on our
business and to help clients fill potential gaps in their
workforces.
Parity's business is heavily weighted towards the public sector,
which accounted for approximately 70% of revenues in 2019. We are
already seeing signs that Government expenditure will be more
resilient as much of it is aligned to the provision of key public
services. However due to the ongoing uncertainty caused by
COVID-19, Parity expects there will be an impact on revenues for
the current year, the exact extent of this impact remains
impossible to quantify at this stage.
Parity remains well capitalised, with net cash at 31 December
2019, and a GBP10m existing credit facility providing a comfortable
level of headroom through asset based lending. The government's VAT
deferral measures will provide an additional useful help to cash
flow in the current year. The Board remains confident that Parity
has sufficient access to cash to enable it to trade its way through
this period of global uncertainty.
The Board will continue to closely monitor all expenditure over
the near term, to ensure the Company effectively manages its cost
base and cash reserves in line with a quickly evolving
situation.
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of MAR.
For further information, contact:
Matthew Bayfield
CEO 020 8543
Roger Antony GFD Parity Group plc 5353
David Beck Donhead Consultants 07836 293383
Mike Coe 0207 220
Chris Savidge WH Ireland 1666
This announcement contains certain statements that are or may be
forward-looking with respect to the financial condition, results or
operations and business of Parity Group plc. By their nature
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These
factors include, but are not limited to (i) adverse changes to the
current outlook for the UK IT recruitment and solutions market,
(ii) adverse changes in tax laws and regulations, (iii) the risks
associated with the introduction of new products and services, (iv)
pricing and product initiatives of competitors, (v) changes in
technology or consumer demand, (vi) the termination or delay of key
contracts and (vii) volatility in financial markets.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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