Interim Management Statement

RNS Number : 4112W

Parity Group PLC

18 November 2010

 



Parity Group plc (the "Group"),

Interim Management Statement

Parity Group plc the UK IT services group, today issues its Interim Management Statement for the period to 17 November 2010.

As previously indicated 2010 will show an operating loss, with exceptional costs relating to the Group's restructuring, and new property provisions. The intention of the Board remains to complete the major restructuring and re-orientation this year so that the business can start 2011 in a much healthier position. 

The urgent need to restructure the business was quickly recognised by the new management appointed last June. A two-phase restructuring program has now been implemented, reducing annual costs by over £3m, to better balance costs with current revenues. New management information and control processes have been installed and management changes made across the Group.

The restructuring has resulted in the Group being reorganized into the following three business units -

1.   Resources

Resources has been re-appointed as one of the government's suppliers of temporary IT staff under the Buying Solutions framework, but suffered from a significant slowdown in new public sector business prior to the UK Government's recent Spending Review. Commercial business has grown well this year and now represents nearly half of IT professionals under contract today.

2.   Talent Management

Talent Management, a new business focus, is based round the long-standing Belfast graduate training business and the re-awarded Cabinet Office graduate selection contract. This business area is seen as a significant growth opportunity for the Group.

3.   Systems

Systems has seen many of the necessary redundancies as a consequence of withdrawing from large fixed-price projects and their inherent infrastructure. Recently revenues have stabilized at a lower level and the division now looks to the fruits of its refocused marketing to build the business next year. A strategic review has identified areas of the market where there is significant mid-term growth potential, including the move to Cloud technology. Systems is also creating a New Technology centre in Cambridge - an area of much UK technological innovation.

Cash and cash management has continued to be the top priority for management and careful control has been essential. The Group is in the final phase of negotiations with a view to agreeing extended funding facilities with a new banking partner. The new Board remains committed to increasing shareholder value substantially over the coming years. All the actions in the second half are aimed at creating the necessary stable base for such growth in revenues and profits, whilst restoring financial stability.                 

Preliminary results for the year to 31 December 2010 are expected to be announced in March 2011.

Enquiries:
Parity Group PLC Philip Swinstead OBE, Chairman Paul Davies, CEO	0845 873 6942
MHP Communications John Olsen/Ian Payne	020 7357 9477
Arbuthnot Securities Hugh Field/Ed Gay	020 7012 2000

 

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