Specialist IT staffing firm InterQuest Group (ITQ: LSE) has provided a trading update ahead of its interim results for the six months ending 30 June 2017.

Interquest announced on 15 June 2017 that it was facing challenges in the political and trading environment resulting from Brexit, the result of the UK election and the subsequent hung Parliament.

The company stated that like-for-like Net Fee Income (NFI) for the six months to 30 June 2017 was down 14% to £9.5 million (2016: £11.0 million). Total NFI for the six months to 30 June 2017, including that of Rees Draper Wright which was acquired on 3 August 2016, was £11.2 million. Total Earnings before Interest, Tax and Amortisation ("EBITA") before exceptional costs decreased by 19% to £1.3 million (2016: £1.6 million).

Interquest added that market conditions in one of the company's core markets, Financial Services, remain challenging, specifically in the contracting market which is experiencing pressure on margins. The company is therefore more reliant on fees from permanent placements which are more volatile, particularly in the higher value search business. Interquest has benefitted from better performances in its public sector, solutions and North American search market but these have only partly mitigated the larger underperforming divisions which are taking longer than expected to turn around.

Interquest expects that NFI will be materially affected and EBITA for the year to 31 December 2017 will be approximately £3.1 million. InterQuest added that it rebuffed several takeover bids from Chisbridge Limited in recent months and said that it incurred costs of £0.5 million in the process.

Further detail will be provided within the company's interim results for the six months to 30 June 2017 which are expected to be published in September 2017.

In trading yesterday, Interquest shares were down 11.7% on the day. Based on its current share price the company has a market value of £16.04 million.