IT Staffing Report: Dec. 11, 2014

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UK tech staffing firm updates financial guidance

Specialist technology staffing company Parity Group (PTY: LSE) announced that, notwithstanding slower than expected growth at Parity Professionals and the restructuring of a business acquired this year, EBITDA for the year ending Dec. 31 will be in-line with current market expectations.

Parity Professionals, the company’s IT staff agency business, reported revenue and profit growth in 2014. It has seen margin pressure due to certain customers appointing gatekeepers for temporary staff contracts. In response, sales efforts are being re-focused on alternative areas which, while improving margins, has reduced short-term contractor growth.

The talent management business renewed two major graduate selection and development contracts and continues to grow its customer base particularly in the Food and Education sectors. A new range of training courses is also under development.

Parity Group’s SuperCommunications division (formerly Parity Digital) targets brands that need to transform their operations to compete in today’s fast-growing e-commerce technology world.

Golden Square, the company’s content production and post-production business, was acquired from administration in April at below fixed asset value, and restructured over the last six months. A reduced core business has now exited its main office premises on which the lease assignment was not taken, and moved to an existing smaller office. As expected there were non-recurring restructuring costs for Golden Square, which are expected to be around £600,000; mostly comprising employee and property related costs.

Looking forward, Parity Professionals is integrating its two businesses into one service offering, and is developing a new strategic approach, targeted at improving its growth opportunity in the coming years.

According to the board, SuperCommunications is now very well positioned to generate growth from its core business transformation skills, content production, and latest technology product offerings. 

According to the trading update, the Board looks forward to 2015 with confidence and is focused on delivering significant profitable growth in both divisions, and cash generation, to justify the investments made by loyal shareholders, staff and directors in recent years.