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Savile Group Plc (SAVG:LSE), the AIM quoted human resources consulting group, specialising in outplacement, career transition and talent management, has provided an update on trading for the six months ending 31 December 2009.
The Group said in a statement yesterday "whilst the first quarter performance was broadly in line with the previous year, the second quarter revenues to 31 December were significantly below expectations. The Group has remained profitable in the first six months although the impact of the second quarter trading will result in the interim figures being substantially below those achieved last year. Trading in the quarter ended 31 December 2008 was unusually buoyant due to the level of restructuring in the financial services industry."
"The pipeline in talent management remains strong, although the timeframe to convert into revenue is taking longer than is normally the case. Outplacement revenues experienced a downturn in November and December, which was exacerbated by the loss of a significant contract late in 2009."
"However, indications are that 2010 will be a year of further restructuring, in both the private and public sectors, from which both IDDAS and Fairplace will benefit. Further, the Board has taken steps to realign the cost base for the Group, some benefits of which are expected to come through in the current financial year. Overall, the Board has reduced ongoing costs by approximately 750,000 Pounds per annum."
"The balance sheet of the Group remains strong, with cash in excess of 3.2 million Pounds. Presently approximately 0.9 million shares are held in treasury and it is proposed that a General Meeting will be held in March to cancel these shares."
"The Board remains confident that the business is well positioned for 2010 and will continue its strategy to build the Group both from within and through corporate actions. Savile's performance remains weighted towards the second half of the financial year and the Company expects to announce its interim results to 31 December 2009 in mid February."
Stockbrokers Hoodless Brennan were quick to react to the statement by saying "we therefore reduce our recommendation from a buy to sell and reduce our target price to 36 Pence."
By the end of play yesterday Savile's shares were down by 27.5% to 43.50 Pence