Specialist technology staffing company Parity Group (PTY: LSE) reported revenue for the year ended 31 December 2017 of £83.8 million for its continuing operations, a decrease of 8.7% compared with the same period last year. 

In 2017 the group discontinued its bespoke 3D development arm, Inition. The group stated that it had been a non-core asset for some time and has been held for sale and accounted for as a discontinued operation in these accounts.

“Despite having good skills and some specific successes, the business had a disappointing year in 2017 due to its lack of scale and lack of synergy with the rest of the group.  Following a diligent process, the Board remains optimistic of a sale of the business to a home where a greater synergy can be achieved, and will keep this plan under review,” Parity stated.

The decline in group revenue for the year is predominately a result of the effect of the IR35 reforms on the Professionals division, however an increase in Consultancy Services’ revenues helped to partially offset the impact. The improved revenue mix gave rise to a 16% increase in group operating profit before non-recurring items (non-recurring items were £0 in 2017), with the group operating margin improving from 1.9% to 2.5%.

"Our results reflect the affirmative steps taken to focus the group on higher value services, and realign our two divisions to support mutual collaboration, which is proving successful for both our overall business and for our clients,” John Conoley, Non-Executive Chairman of Parity Group, said. "Our integrated model is becoming more balanced and the flexibility that we offer to our clients with access to a broad range of services has mitigated a challenging backdrop as our market was impacted by UK tax reforms."

Revenue broken down by division was as follows.

Parity Professionals’ revenues were reduced as contractor volumes were impacted by IR35 with a corresponding reduction in divisional contribution.

“Trading in the current financial year remains in line with expectations and the Board remains confident in the outlook and continues to target investment to support strategic progress. We believe our continued drive to rebalance revenues towards the higher margin consulting arm of the business positions us well to deliver both growth and further improvements in profitability in 2018 and beyond,” Alan Rommel, CEO of Parity Group said.

 As of last trade Parity traded at £11.45, up 0.88% on the day. Based on its current share price the company has a market value of £11.69 million.