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UK — Parity Group banks on prudence and caution

23 March 2010

Parity Group Plc.(PTY:LSE), the UK-focused IT recruitment (resources) and consulting (solutions) firm, has today announced unaudited preliminary results for the year ended 31 December 2009.

Group revenues from continuing operations fell by -10% from 132.3 million Pounds in 2008 to 119 million Pounds in 2009. Resources revenues fell from 110.2 million Pounds in 2008 to 100.5 million Pounds in 2009. Solutions revenues fell from 22.1 million Pounds in 2008 to 18.5 million Pounds in 2009.

Group operating profit before exceptional items fell by -52% from 3 million Pounds in 2008 to 1.45 million Pounds in 2009. Group profit from continuing operations before tax and exceptional items fell from 1.7 million Pounds in 2008 to 0.25 million Pounds in 2009.

The training business was sold to Dubai-based ECS Ltd. in February 2009 for a consideration of 3 million Pounds, with 50% of the consideration dependent on revenue performance in the twelve months following the sale. However, Parity do not believe that performance levels were adequate to trigger the conditional consideration.

Parity's Chief Executive, Alwyn Welch, commented, "As the recession deepened during 2009, Parity continued to experience difficult trading conditions. Against this background, Resources delivered a very resilient performance, especially compared to most of its competitors, whilst Solutions struggled for much of the year although showed improvement in the second half. By acting quickly on both costs and operating systems, we have weathered the economic storm far better than the Group has done in the past."

"We do not expect our markets to strengthen or grow significantly overall during the current year. IT spending in the public sector will continue to be under strong pressure, but we can see more signs for optimism in the private sector. However, revenue visibility remains low and volatility high."
"Prudence and caution will remain our operational watchwords, as we navigate Parity through the current year and as the market slowly emerges from recession. In the meantime, our reputation for high quality service delivery will help us to continue to differentiate well."

In early trading Parity Group's shares were down by -5.13% to 9.25 Pence.



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