TIDMSTAF
RNS Number : 2392X
Staffline Group PLC
18 December 2019
18 December 2019
STAFFLINE GROUP PLC
("Staffline", "Company" or the "Group")
Trading Update
Staffline, the recruitment and training group, provides the
following update on Group trading and outlook.
Recruitment
In the Recruitment division, trading performance in Q4 has been
below the Board's expectations, with lower than anticipated demand
from end customers. During November, customer demand was down
approximately 16% from the prior year which the Board believes
reflects high levels of consumer uncertainty across the UK. Whilst
trading in December has improved, trading performance for the month
is also anticipated to be below the Board's expectations. Despite
this, Staffline continues to make strong operational progress in
the development of the Recruitment division:
-- Industry leading candidate attraction platform means that
Staffline now has access to c. 1m live candidates on its database
compared to 230,000 this time last year;
-- Worker engagement is at record levels leading to significantly reduced attrition;
-- Further automation of the recruitment process in 2020 is
planned, resulting in further improvements to customer service and
a significant reduction in operating costs.
Notwithstanding current market headwinds, the Board believes the
Company's market-leading approach to worker engagement, its
digitally enabled candidate attraction and its scale within the
industry will result in increasing differentiation and underpins
the Company's future growth.
Furthermore, Staffline looks forward to a levelling of the
competitive playing field anticipated through the introduction of a
single labour market enforcement body. In particular, the Board
expects the unethical use of umbrella companies to be better
regulated. The use of umbrella companies is widespread across our
industry and generally disadvantages workers by exploiting
legislative loopholes.
PeoplePlus
In PeoplePlus, the transition from a Work Programme provider to
the UK's leading skills and training company is complete. Despite
significant growth within the year, Q4 performance is expected to
be below the Board's expectations, principally due to the impact of
the general election purdah on short term procurement
opportunities.
However, following a first half of transition and multiple new
contract implementations, the second half has evidenced the
potential of the business with operating profit in each of October
and November reaching GBP1 million. PeoplePlus has built a
significant platform for future growth and with the majority of
2020 revenues already contracted, the Company maintains a positive
outlook for PeoplePlus in 2020 under its new operating model.
Prior Year Restatement
Following the accounting review completed in the first half of
the year, the Board has continued projects to improve Staffline's
internal controls. This has included a rigorous internal review
process which has identified accounting errors relating to the
preparation of the Company's 2018 annual results. These errors
primarily relate to costs which were not correctly booked. The
Board currently believes the associated impact was an overstatement
of 2018 profit of approximately GBP4 million. The potential for
restatement is expected to be limited to the year ending 31
December 2018. The precise impact remains subject to audit.
Directorate change
The Company has made a separate announcement today regarding the
appointment of Daniel Quint as Interim Chief Financial Officer,
replacing Mike Watts who has left the Group with immediate
effect.
Group Outlook
Given the challenges to trading in Q4, the Board now expects the
Group to deliver full year adjusted operating profit (being profits
before interest, tax and non-underlying charges) for the period
ending 31st December 2019 of approximately GBP10 to 12 million.
The Board expects year end net debt to be approximately GBP50 to
GBP55 million, in line with current market expectations. Staffline
maintains a constructive relationship with its lenders and
consequently the Board does not anticipate any covenant issues over
the year end. Furthermore, the Company is considering certain
strategic options which may significantly reduce net debt during H1
2020.
Notwithstanding the current short-term trading challenges,
Staffline remains a cash generative business, is one of the most
financially robust operators within its immediate peer group and
continues to benefit from considerable liquidity headroom.
Chris Pullen, Chief Executive of Staffline commented:
"It has been a most challenging year for Staffline. Despite this
we have developed two robust market leading businesses which are
well set as platforms for future growth. We remain optimistic about
future potential of the group with the challenges of 2019 behind
us."
For further information, please contact:
Staffline Group plc via Vigo Communications
www.stafflinegroupplc.co.uk
Chris Pullen, Chief Executive Officer
Daniel Quint, Interim Chief Financial
Officer
Liberum NOMAD and Joint Broker
www.liberum.com
Bidhi Bhoma / 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
Market Abuse Regulation
This announcement is released by Staffline Group plc and
contains inside information for the purposes of the Market Abuse
Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance
with the Company's obligations under Article 17 of MAR. The person
who arranged for the release of this announcement on behalf of
Staffline Group plc was Chris Pullen, Group Chief Executive
Officer.
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
Staffline is the UK's leading provider of flexible blue-collar
workers, supplying over 60,000 staff per day to c. 1,600 private
sector clients, across a wide range of industries including
agriculture, drinks, driving, food processing, logistics and
manufacturing. It operates from over c.460 locations in UK,
Republic of Ireland 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
Staffline is the leading adult skills and training provider in
the UK, delivering apprenticeships, adult education, prison
education and skills-based employability programmes across the
country.
Skills and Training - market leading provider of Apprenticeships
(both Levy and non-Levy), learning and development, adult education
and health and well-being programmes to the Private and Public
sector.
Justice and Community - largest independent provider of
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.
Employability - market leading provider of programmes providing
back-to-work education, skills support services to the unemployed
and enterprise advice to individuals wanting to start their own
business.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTFFIEFWFUSEIE
(END) Dow Jones Newswires
December 18, 2019 02:00 ET (07:00 GMT)
Staffline (AQSE:STAF.GB)
Historical Stock Chart
From May 2024 to Jun 2024
Staffline (AQSE:STAF.GB)
Historical Stock Chart
From Jun 2023 to Jun 2024