Parity Group PLC (AIM:PTY) (AIM:PTY) said it expects a decline in revenue and a pre-tax loss for this year, after trading in the first half was impacted by underinvestment in its core recruitment solutions business over the last two years and the failure to develop a sustainable and scalable consulting business.
The data and technology-focused professional services company said it has revised its full-year outlook and now expects revenue in the region of GBP47.6mln, down from GBP57.8mln the previous year, and a pre-tax loss of GBP750,000, compared with a profit of GBP122,000.
It forecast net fee income of GBP4.1mln and an adjusted EBITDA loss of GBP100,000.
Parity said it will focus investment in the near-term on restoring capability and capacity in its core recruitment solutions business, especially in sectors where market demand is both strong and resilient.
During 2020 and the pandemic lockdown, Parity benefited from its recurring, and predominantly public sector, contract recruitment revenues. This, combined with a cost-cutting programme that started in 2019, led to a short-term reduction in losses and increased profitability, the group said.
However, as markets reopened in the first and second quarters of 2021 and activity increased, the underinvestment in Parity’s core recruitment solutions business was exposed, leaving the company unable to take advantage of opportunities and vulnerable to higher attrition in its contractor workforce.
“The sectors Parity is targeting remain resilient to the disruption in the wider economy and provide the business with the opportunity to capitalise on the investment it is making in people during H2 2021, leveraging its heritage to re-establish growth in a business with strong demand and in which Parity is considered a quality brand,” the company said.
Parity also plans to extend its value-added services, including Managed Services and Statement of Work, to new and existing clients.
Mark Braund, interim executive chairman, said: ” Parity is returning the focus of the business to what it does best; providing quality and innovative recruitment solutions to meet the growing demand for highly skilled resources in the data and change management sectors of the market.
“The quality of Parity’s brand, the simplicity of our focus and the passion with which our colleagues are addressing this opportunity, positions the Company well to recover both the value and performance of the business. “