Parity Group, the UK-based data and technology-focused recruitment and professional services company, announced it is expecting first half revenue to be 10% lower than that achieved in the second half of 2022.

The company said it has seen market conditions become more challenging over recent months with economic uncertainty resulting in clients and new business opportunities deferring hiring decisions.

In spite of the lower H1 performance, the business said it has improved its working capital management and reduced net debt to £0.7 million as at the 30 June 2023 (compared with £2.3 million net debt as at 31 December 2022).

During H1 2023, Parity successfully won a place on the public sector RM6277 framework, which has an estimated spend of circa £2 billion over the next four years, though it is not possible at this stage to quantify what level of revenue might be augmented to Parity, it added. The framework is for the provision of non-clinical staffing to the NHS.

“This framework, which went live on 25 July 2023, represents a significant opportunity for Parity to expand further into the public sector at a time when there are increasing headwinds affecting the broader recruitment market,” the group stated.

With market conditions not expected to improve in the near term and a key client signalling a shift towards a more global supply chain, Parity said it is prioritising resources to exploit its strengths and opportunity within the public sector, and in particular the new RM6277 framework. 

As a result, the new business initiatives targeting the private sector, which included permanent recruitment services, have been scaled back and with a resultant reduction in headcount.

Historically, Parity's core business, servicing contract recruitment within the public sector, has been one of the most resilient areas when recruitment markets turn down. The company sees this as a core strength of the business and will be looking at how it can leverage this to maximize value for shareholders.

Following its trading update, Parity Group shares last traded at £2.74, down 8.67% on the day. The company has a market cap of £2.82 million.