TIDMSTAF
RNS Number : 4695H
Staffline Group PLC
25 March 2020
25 March 2020
STAFFLINE GROUP PLC
("Staffline" or the "Company")
Business Update
Staffline, the recruitment and training group, provides the
following update on both trading and the impact of the COVID-19
pandemic.
Market and COVID-19 update
As a result of the very early development of the COVID-19
pandemic, the Company's Recruitment business is experiencing
significant variance between customer segments. There is a marked
increase in demand in the food sector, including food processing,
logistics and supermarkets. While this increase in demand may be
temporary, Staffline is well-placed to respond to this sudden and
unpredicted surge in consumer demand given the size of the
Company's database, geographic reach and technology-enabled
operating platform. Furthermore, the Company has launched a new
web-based platform to act as a coordination point between displaced
workers from the travel and hospitality sectors, providing live
opportunities in the food supply chain. Through Staffline's
dedicated site, www.feedthenation.co.uk , the Company has been able
to connect displaced workers immediately with the vital roles
required in the food supply chain.
Conversely, demand from other sectors such as retail, automotive
and manufacturing has diminished considerably with the Group's
limited exposure to white collar and permanent recruitment also
impacted. It is too early to assess the net impact of these changes
in demand mix. The Company is in the process of conducting a bottom
up reforecasting exercise incorporating these considerations.
Within PeoplePlus, well-developed business continuity and
resilience plans mean that the business can continue to operate the
majority of the division's services despite recent 'isolation
measures', according to customer requirements, including through
digital delivery models. The Company's predominately central, local
and devolved Government funding streams mean that the Group is
having positive discussions in how these will be sustained through
this exceptional period. Whilst not all discussions are yet
concluded, some funders have already confirmed they intend to
maintain funding levels. This gives PeoplePlus considerable
reassurance on its core revenue levels and ability to navigate this
period. Mitigating the impact on PeoplePlus' apprenticeship levy
market is a key area of focus for PeoplePlus, as management is
anticipating a reduction in new apprenticeship starts due to
reduced private sector activity despite the division's digital
delivery model. As a leading provider of skills support to the
unemployed, PeoplePlus is also well-positioned to support the wider
challenges of the UK economy at this time.
HMRC measures
On Friday, 20 March 2020, the Government announced that no VAT
payments due from businesses between 20 March 2020 and the end of
June 2020 would be required to be made, with payment being deferred
until the end of the tax year. HMRC has not yet issued detailed
guidance on how the tax year will be defined - the tax year for VAT
typically runs to the end of 31 March, 30 April or 31 May
(depending on the VAT return periods of an individual business).
Therefore, the Company's working assumption is that VAT payments
for the period from 20 March 2020 to 30 June 2020 will be deferred
until March 2021. This payment delay provides the Company with an
immediate and significant short-term liquidity improvement. The
Company is in ongoing discussions with HMRC regarding other
supportive measures.
Liquidity and financing
The VAT deferral noted above provides the Company with an
immediate and significant short-term liquidity improvement and
improved working capital profile to support the Company as it
responds to near-term demand from the food sector.
As reported previously, the Company remains in regular and
constructive dialogue with its lending banks who remain supportive
in these unprecedented times. The Board expects to reach agreement
with its lending banks on revised terms that will mitigate the risk
of any potential covenant issues.
Audit
The audit in relation to the year ended 2019 is progressing with
the Company's new auditors Grant Thornton UK LLP, and the Board is
confident that this will be completed within the statutory
reporting timeframe.
Outlook
The Company welcomes HMRC's measures with respect to VAT, which
will improve the Company's short-term liquidity and working capital
profile as it responds to near-term demand from the food sector and
the Company remains encouraged that the Government has indicated
that funding for training will be maintained.
However, given the evolving nature of the COVID-19 pandemic, it
is too early to assess its medium-term impact on the Company and
therefore trading for the current financial year. While the
implications of the COVID-19 pandemic are difficult to determine,
the Board is confident in the long-term structural growth drivers
of the markets in which the business operates.
The Board will continue to monitor the situation closely and
will update the market further as appropriate.
Staffline's priority remains the health and wellbeing of the
Company's customers, partners and employees and Staffline are
continuing to ensure that the appropriate measures and precautions
are in place for their safety.
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 Broker
www.liberum.com
Bidhi Bhoma / Joshua Hughes 020 3100 2222
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 c460 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
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