Trading Statement

RNS Number : 7451U

Parity Group PLC

05 December 2013

 



Parity Group plc  

Trading Update, 5^th December 2013

The Board of Parity Group plc ("Parity" or the "Group") is pleased to provide an update on trading ahead of its financial year end.

The Group's profitability has continued to improve.  As a result, Adjusted EBITDA¹ for the year ending 31 December 2013 is now expected to exceed £2.5 million, an increase of over 80% on the previous year.

As previously disclosed, the Board had set in motion an internal decentralisation to divide the Group into two distinct business divisions - Parity Professionals and Parity Digital. We are pleased to confirm that this reorganisation is now complete and the two businesses, each with a Chief Operating Officer, will be reported as separate divisions in the Group's 2013 results for the year ending 31 December 2013.

The Parity Professionals division predominantly comprises the IT staff agency Parity Resources which has continued to expand the number of contractors to approximately 950. The division's small Talent Management group has successfully won business this year but has seen some delays in the call-off of these training services due to stretched educational budgets.

The Parity Digital division contains Inition, our pioneering creative 3D technology company, and our Systems business, providing business intelligence and web portal solutions. Trading in the Parity Digital division has been very positive this year with Inition making significant progress in its financial performance.  Prior to its acquisition by the Group, operating profit to 31 March 2012 was £0.065m.  The terms of the acquisition included an earnout target of generating £0.3m operating profit for the year ended 31 March 2013 which was achieved and this year it has continued to improve its performance towards its second earnout target of £0.5m operating profit for the year to 31 March 2014. The Systems business' revenues remain stable with good profit margins.

Following the establishment of the two separate divisions the Board intends to move forward on its strategic plan for the Parity Digital division. The success of the acquisition of Inition in May 2012, our first acquisition for this division, has caused us to refine our strategic plan and we are now focused on expanding our creative technology hub selling to brands, government and the marketing services industry. A strategy group oversees the implementation of this plan including the continuing evaluation of acquisition prospects, the funding options for these and other opportunities to further enhance Group earnings through maximising operational efficiencies.

The Board indicates progress on the Group's underlying operating profitability at the Adjusted EBITDA¹  level.  We are pleased to report that, notwithstanding the delays currently being experienced in the Talent Management business, the Group's profitability has continued to improve on the already strong results announced for the first half of the financial year, with Adjusted EBITDA¹ for the year ending 31 December 2013 now expected to exceed £2.5 million, representing an increase of over 80% on the previous year.

Looking to 2014, the Board expects its Parity Professionals business to continue good growth as the economic recovery progresses, and Inition to make further progress within its own high-growth market.  We will continue to seek to drive further shareholder value and look forward to reporting on our updated strategic plans and their implementation over the next two years.

^{1 "}Adjusted EBITDA" being the statutory measure from continuing operations, prior to non-recurring items, strategic initiative costs, acquisition costs and share based compensation.

Parity Group PLC                                                             0845 873 6942

Philip Swinstead, Chairman

Alastair Woolley, Finance Director

MHP Communications                                                       020 3128 8100

John Olsen

Ben Griffiths

Investec Bank PLC                                                            020 7597 4000 

Andrew Pinder                                                                      

Patrick Robb

Dominic Emery

Cara Griffiths

 

END

 

 

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