Staffline Group PLC Group Update and Restoration of Trading (5214S)
March 12 2019 - 3:30AM
UK Regulatory
TIDMSTAF
RNS Number : 5214S
Staffline Group PLC
12 March 2019
12 March 2019
STAFFLINE GROUP PLC
("Staffline" or "the Group")
Group Update and Restoration of Trading
On the evening of 29 January 2019, allegations were raised by a
third party to the Group's auditors in respect of invoicing and
payroll practices within the Group's Recruitment division. A review
was instigated which included the appointment of independent legal
advisers to conduct an investigation, as well as instructing the
Group's auditors to extend their scope of work.
The independent legal investigation has delivered its key
findings which has assisted the Board in assessing and defining the
impact on the Group's profitability and existing forecasts.
The Board remains confident that its policies in relation to
these matters are appropriate. However, one allegation concerned
the Group's historical compliance with National Minimum Wage
Regulations 2015. The Group has been engaging with HMRC in order to
quantify underpayments made in the past to workers, over a number
of years prior to 2018. Potential underpayments identified by the
Group relate to a limited number of food production facilities and
the payment for preparation time, which is generally the time spent
donning workwear. A provision of GBP4.4m had been made for
estimated additional costs in the Group's accounts for the year
ended 31 December 2018. This provision was included as part of the
GBP20m of exceptional costs announced in the Company's trading
update on 8 January 2019. However, as a result of legal advice, the
Board has revised its estimate and deems it prudent to increase
that charge by GBP3.5m taking total exceptionals in the period to
GBP23.5m. The additional provision referred to above is exceptional
and is the only change against market expectations identified by
the Board.
Once the audit process is complete, Staffline will release its
preliminary results for the year ended 31 December 2018. At that
point, the Board expects to report, subject to audit completion, an
underlying trading performance for the year ended 31 December 2018
in line with expectations and maintains its expectations for the
current financial year. As previously announced, the Group expects
to report net debt of c.GBP63m (unaudited) as at 31 December 2018.
Furthermore, the Group can confirm that, of the items behind the
working capital increase at 31 December 2018, there has since been
an improvement of approximately GBP10m.
Having now clarified the expected financial impact on the Group,
the Board has requested that suspension be lifted and trading in
the Company's shares will resume with effect from 7.30am on 12
March 2019.
John Crabtree, Non-executive Chairman of Staffline,
commented:
"On behalf of the Board, I am pleased that we are able to take
this positive step forward, providing clarity and reassurance to
our staff, customers and shareholders.
We have taken this opportunity to review thoroughly the
implementation of our policies as we strive to set the highest
standards.
We look forward to publishing Staffline's results for the year
ended 31 December 2018 in due course and continuing to focus on
delivering across our key growth objectives."
For further information, please contact:
Staffline Group plc via Vigo Communications
www.stafflinegroupplc.co.uk
Chris Pullen, Chief Executive Officer
Michael Watts, Group Chief Financial
Officer
Liberum NOMAD and Joint Broker
www.liberum.com
Steve Pearce / Joshua Hughes 020 3100 2222
Berenberg Joint Broker
www.berenberg.com
Chris Bowman / Toby Flaux 020 3207 7800
Vigo Communications Financial PR 020 7390 0230
www.vigocomms.com staffline@vigocomms.com
Jeremy Garcia / Antonia Pollock / Charlie
Neish
Note for Editors
About Staffline - Recruitment, Training and Support
Enabling the Future of Work(TM)
Staffline is the UK's market leading Recruitment and Training
group. It has two divisions:
Recruitment Division
The UK's leading provider of flexible blue-collar workers,
supplying over 60,000 staff per day to c. 1,500 private sector
clients, across a wide range of industries including agriculture,
drinks, driving, food processing, logistics and manufacturing. It
operates from over 400 locations in UK, Eire and Poland.
Its world leading Customer Experience platform provides
optimised customer-based staffing management solutions whilst
providing market-leading levels of job satisfaction for
workers.
PeoplePlus Division
The leading adult skills and training provider in the UK,
delivering apprenticeships, adult education, prison education and
skills-based employability programmes across the country.
Education and Training - market leading provider of training
courses for private sector Apprenticeships (both Levy and non-Levy)
and Government funded Adult Skills programmes.
Employability - top quartile performer, supporting Government
programmes providing back-to-work education and support services to
the unemployed.
Justice and Community - education and training services for
prisoners and ex-offenders, as well as individual support services
for carers and people with disabilities, both at home and in the
work place.
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END
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