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PTY.GB Partway Group Plc

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Share Name Share Symbol Market Type Share ISIN Share Description
Partway Group Plc AQSE:PTY.GB Aquis Stock Exchange Ordinary Share GB00B1235860
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Parity Group PLC Interim Results (0743O)

29/09/2023 7:00am

UK Regulatory


Partway (AQSE:PTY.GB)
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From Jun 2023 to Jun 2024

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TIDMPTY

RNS Number : 0743O

Parity Group PLC

29 September 2023

PARITY GROUP PLC

INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2023

29 September 2023

Parity Group plc ("Parity" or the "Group"), the data and technology focused professional services business, announces its half year results for the six months ended 30 June 2023 ("H1 2023").

Headlines

-- In spite of challenging market conditions, revenue for the first half of 2023 was just 10% lower than the second half of 2022.

   --    Close to break even on an Adjusted EBITDA basis for H1 2023. 
   --    Net debt significantly reduced. 

Mark Braund, Executive Chairman of Parity Group plc, said:

"The team has completed the task of rebuilding the core recruitment business after years of underinvestment, to position Parity as a recruiter of strength in the UK's public sector, at a time when there are increasing headwinds affecting the broader recruitment market.

Whilst our business in the public sector has been resilient, we too have been affected by these headwinds in areas where we sought to grow such as the UK's commercial private sector.

The changes made to the business have enabled Parity to act quickly, tuning itself far more rapidly than before to operate at a fit-for-purpose scale and cost base.

As we reflect on Parity's position in the market, we continually review the Company's businesses to determine the best medium and long-term direction for Parity for the benefit of its shareholders."

 
 Contacts 
 Parity Group PLC                                   www.parity.net 
 Mark Braund, Executive Chairman 
  Mike Johns, CFO                                   + 44 (0) 208 171 1729 
 Allenby Capital Limited (Nominated Adviser 
  and Broker) 
 David Hart / Dan Dearden-Williams (Corporate 
  Finance) 
  Tony Quirke /Guy McDougal (Sales and Corporate 
  Broking)                                          +44 (0) 20 3328 5656 
 

Overview

After years of underinvestment and neglect, the team has completed the task of rebuilding the core recruitment business to position Parity as a recruiter of strength in the UK's public sector.

In the year prior we had removed the substantial overhead associated with the previous management team's failure to build a profitable consulting business and reinvested a small portion into re-establishing Parity's heritage as a well-recognised recruitment brand.

In line with many others within the recruitment sector, Parity has seen market conditions become more challenging with economic uncertainty resulting in clients and new business opportunities deferring hiring decisions. As a result, first half revenues were 10% lower than that achieved in the second half of 2022.

During H1 2023, Parity successfully won a place on the coveted public sector RM6277 framework, which has an estimated spend of circa GBP2bn over the next four years, though it is not possible at this stage to quantify what level of revenue might accrue to Parity. This framework, which went live on 25 July 2023, represents a significant opportunity for Parity to expand further into the public sector at a time when there are increasing headwinds affecting the broader recruitment market.

In spite of the lower H1 performance, the business has improved its working capital management and reduced net debt to GBP0.7m as at the 30 June 2023 (compared with GBP2.3m net debt as at 31 December 2022).

With market conditions not expected to improve in the near term and a key commercial client in the private sector signaling a shift towards a more global supply chain, Parity is prioritising resources to exploit its strengths and opportunity within the public sector, and in particular the new RM6277 framework. As a consequence, the new business initiatives targeting the private sector, which included permanent recruitment services, were scaled back, with a resultant reduction in headcount.

Historically, Parity's core business, servicing contract recruitment within the public sector, has been one of the most resilient areas when recruitment markets turn down. The Company sees this as a core strength of the business and will be looking at how the Company can leverage this.

As we consider the scale of the business, its strength and value in public sector, we continually review the Company's businesses to determine the best medium and long-term direction for Parity for the benefit of its shareholders.

Financial Summary

Revenue and net fee income

Group revenues in H1 2023 of GBP17.6m were 10% lower than those in the second half of 2022 and 16% lower than H1 2022.

Net fee income in H1 2023 of GBP1.3m was 18% lower than the second half of 2022 with a shift in the mix of clients resulting in average margin reducing from 7.4% to 7.0%. Against H1 2022, net fee income was 35% lower. However, H1 2022 included GBP0.3m from a legacy managed service contract that ended in Q1 2022. Excluding this discontinued business line, net fee income for H1 2023 was 21% lower than the same period in 2022, with lower permanent recruitment accounting for 3% and lower contract recruitment 18%.

Operating costs

At the beginning of the 2023, the Group took the decision to invest in existing and new business areas to facilitate growth. A consequence of this was that the business carried a higher cost base through the first half and incurred an overall adjusted EBITDA loss for the period of GBP0.3m. With the additional costs associated with servicing the working capital facility, pension deficit contributions and IFRS16 amortisation, the overall loss before tax for H1 2023 was GBP0.6m.

Following a review of the business at the end of the half year, the Group has rationalised the cost base to facilitate a return in the future to a positive adjusted EBITDA. This cost rationalisation is expected to deliver a net reduction in monthly expenditure by GBP75k.

Cash and net debt

Net debt as at 30 June 2023, excluding adjustments for IFRS 16 lease liabilities, was GBP0.7m (30 June 2022: net debt of GBP4.5m, 31 December 2022: net debt of GBP2.3m).

The significant fall in net debt since the end of 2022 is primarily due to the improved debtor performance and payment by a key client of outstanding and overdue invoices following the resolution of their internal processes.

The Group continues to rely upon its asset-based lending (ABL) debt facility from Leumi. The current facility is in place until October 2025 and is secured against billed and unbilled receivables to manage both intra month and inter month movements in working capital.

Consolidated condensed income statement

For the six months ended 30 June 2023

 
 
                                                   Six months     Six months           Year 
                                                  to 30.06.23    to 30.06.22    to 31.12.22 
                                                  (Unaudited)    (Unaudited)      (Audited) 
                                        Notes         GBP'000        GBP'000        GBP'000 
------------------------------------  -------  --------------  -------------  ------------- 
 Revenue                                 3             17,634         21,054         40,648 
 Contractor costs                                    (16,378)       (19,137)       (37,184) 
------------------------------------  -------  --------------  -------------  ------------- 
 Net fee income                                         1,256          1,917          3,464 
 Other operating income                                     -              -            950 
 Operating costs                                      (1,702)        (1,839)        (5,443) 
------------------------------------  -------  --------------  -------------  ------------- 
 Operating (loss)/profit                                (446)             78        (1,029) 
------------------------------------  -------  --------------  -------------  ------------- 
 Analysed as: 
 Underlying operating (loss)/profit 
  before non-underlying items                           (446)            101            (4) 
 Non-underlying costs                    4                  -           (23)        (1,975) 
 Non-underlying income                   4                  -              -            950 
------------------------------------  -------  --------------  -------------  ------------- 
 Operating (loss)/profit                                (446)             78        (1,029) 
------------------------------------  -------  --------------  -------------  ------------- 
 Finance costs                           5              (203)          (160)          (310) 
------------------------------------  -------  --------------  -------------  ------------- 
 Loss before tax                                        (649)           (82)        (1,339) 
------------------------------------  -------  --------------  -------------  ------------- 
 Analysed as: 
 Adjusted loss before tax(1)                            (649)           (59)          (314) 
 Non-underlying costs                    4                  -           (23)        (1,975) 
 Non-underlying income                   4                  -              -            950 
 Loss before tax                                        (649)           (82)        (1,339) 
------------------------------------  -------  --------------  -------------  ------------- 
 Tax charge                              6              (459)          (213)          (376) 
------------------------------------  -------  --------------  -------------  ------------- 
 Loss for the period attributable 
  to owners of the parent                             (1,108)          (295)        (1,715) 
------------------------------------  -------  --------------  -------------  ------------- 
 
 
  Loss per share 
  Basic             7      (1.07p)    (0.29p)    (1.66p) 
  Diluted            7     (1.07p)    (0.29p)    (1.66p) 
----------------  ----  ----------  ---------  --------- 
 

All activities comprise continuing operations.

(1) Adjusted loss before tax is a non-IFRS alternative performance measure, defined in Note 1 of the notes to the interim results.

Consolidated condensed statement of comprehensive income

For the six months ended 30 June 2023

 
                                                 Six months     Six months           Year 
                                                to 30.06.23    to 30.06.22    to 31.12.22 
                                                (Unaudited)    (Unaudited)      (Audited) 
                                                    GBP'000        GBP'000        GBP'000 
-------------------------------------------  --------------  -------------  ------------- 
 Loss for the period                                (1,108)          (295)        (1,715) 
 
 Other comprehensive income 
 Items that will never be reclassified 
  to profit or loss 
 Remeasurement of defined benefit pension 
 scheme                                               (569)          (783)          (841) 
 Deferred taxation on remeasurement 
  of defined benefit pension scheme                     199            274            290 
-------------------------------------------  --------------  -------------  ------------- 
 
 Other comprehensive income for the 
  period after tax                                (370)          (509)          (551) 
-------------------------------------------  --------------  -------------  ------------- 
 Total comprehensive income for the 
  period attributable to owners of the 
  parent                                            (1,478)          (804)        (2,266) 
-------------------------------------------  --------------  -------------  ------------- 
 
 
 

Consolidated condensed statement of changes in equity

For the six months ended 30 June 2023

Six months to 30.06.23 (Unaudited)

 
                                             Share       Capital 
                                  Share    premium    redemption       Other    Retained 
                                capital    reserve       reserve    reserves    earnings      Total 
                                GBP'000    GBP'000       GBP'000     GBP'000     GBP'000    GBP'000 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 At 1 January 2023                2,062     33,270        14,319      34,560    (79,400)      4,811 
 Share options - value of 
  employee services                   -          -             -           -          21         21 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 Transactions with owners             -          -             -           -          21         21 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 Loss for the period                  -          -             -           -     (1,108)    (1,108) 
 Other comprehensive income 
  for the period                      -          -             -           -       (370)      (370) 
 At 30 June 2023                  2,062     33,270        14,319      34,560    (80,857)      3,354 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 

Six months to 30.06.22 (Unaudited)

 
                                             Share       Capital 
                                  Share    premium    redemption       Other    Retained 
                                capital    reserve       reserve    reserves    earnings      Total 
                                GBP'000    GBP'000       GBP'000     GBP'000     GBP'000    GBP'000 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 At 1 January 2022                2,062     33,270        14,319      34,560    (77,184)      7,027 
 Share options - value of 
  employee services                   -          -             -           -          20         20 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 Transactions with owners             -          -             -           -          20         20 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 Loss for the period                  -          -             -           -       (295)      (295) 
 Other comprehensive income 
  for the period                      -          -             -           -       (509)      (509) 
 At 30 June 2022                  2,062     33,270        14,319      34,560    (77,968)      6,243 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 

Year to 31.12.22 (Audited)

 
                                             Share       Capital 
                                  Share    premium    redemption       Other    Retained 
                                capital    reserve       reserve    reserves    earnings      Total 
                                GBP'000    GBP'000       GBP'000     GBP'000     GBP'000    GBP'000 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 At 1 January 2022                2,062     33,270        14,319      34,560    (77,184)      7,027 
 Share options - value of 
  employee services                                                                   50         50 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 Transactions with owners         -              -             -           -          50         50 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 Loss for the year                    -          -             -           -     (1,715)    (1,715) 
 Other comprehensive income 
  for the year                        -          -             -           -       (551)      (551) 
 At 31 December 2022              2,062     33,270        14,319      34,560    (79,400)      4,811 
----------------------------  ---------  ---------  ------------  ----------  ----------  --------- 
 

Consolidated condensed statement of financial position

As at 30 June 2023

 
                                                  As at          As at        As at 
                                               30.06.23       30.06.22     31.12.22 
                                            (Unaudited)    (Unaudited)    (Audited) 
                                  Notes         GBP'000        GBP'000      GBP'000 
-------------------------------  ------  --------------  -------------  ----------- 
 Assets 
  Non-current assets 
 Goodwill                                         2,642          4,594        2,642 
 Other intangible assets                            157            136          188 
 Property, plant and equipment                        7             13           10 
 Right-of-use assets                                 88             97          174 
 Deferred tax assets                                260            557          521 
 Retirement benefit asset           8               769          1,243        1,269 
-------------------------------  ------  --------------  -------------  ----------- 
 Total non-current assets                         3,923          6,640        4,804 
-------------------------------  ------  --------------  -------------  ----------- 
 Current assets 
 Trade and other receivables                      3,750          7,803        5,909 
 Cash and cash equivalents                          512            150        2,053 
 Total current assets                             4,262          7,953        7,962 
-------------------------------  ------  --------------  -------------  ----------- 
 Total assets                                     8,185         14,593       12,766 
-------------------------------  ------  --------------  -------------  ----------- 
 Liabilities 
 Current liabilities 
 Loans and borrowings                           (1,169)        (4,657)      (4,356) 
 Lease liabilities                                 (96)          (173)        (203) 
 Trade and other payables                       (3,555)        (3,478)      (3,340) 
 Total current liabilities                      (4,820)        (8,308)      (7,899) 
-------------------------------  ------  --------------  -------------  ----------- 
 Non-current liabilities 
 Lease liabilities                                    -              -         (14) 
 Provisions                                        (11)           (42)         (42) 
 Total non-current liabilities                     (11)           (42)         (56) 
-------------------------------  ------  --------------  -------------  ----------- 
 Total liabilities                              (4,831)        (8,350)      (7,955) 
-------------------------------  ------  --------------  -------------  ----------- 
 Net assets                                       3,354          6,243        4,811 
-------------------------------  ------  --------------  -------------  ----------- 
 
 Shareholders' equity 
 Called up share capital                          2,062          2,062        2,062 
 Share premium account                           33,270         33,270       33,270 
 Capital redemption reserve                      14,319         14,319       14,319 
 Other reserves                                  34,560         34,560       34,560 
 Retained earnings                             (80,857)       (77,968)     (79,400) 
-------------------------------  ------  --------------  -------------  ----------- 
 Total shareholders' equity                       3,354          6,243        4,811 
-------------------------------  ------  --------------  -------------  ----------- 
 

Consolidated condensed statement of cash flows

For the six months ended 30 June 2023

 
                                                  Six months     Six months           Year 
                                                 to 30.06.23    to 30.06.22    to 31.12.22 
                                                 (Unaudited)    (Unaudited)      (Audited) 
                                       Notes         GBP'000        GBP'000        GBP'000 
-----------------------------------  -------  --------------  -------------  ------------- 
 
 Operating activities 
 Loss for the period                                 (1,108)          (295)        (1,715) 
 Adjustments for: 
 Net finance expense                    5                203            160            310 
 Share-based payment expense                              21             20             50 
 Income tax charge                      6                459            213            376 
 Amortisation of intangible assets                        31              -              3 
 Depreciation of property, plant 
  and equipment                                            3              7             10 
 Depreciation and impairment 
  of right-to-use assets                                  86            177            346 
 Impairment of goodwill                                    -              -          1,952 
                                                       (305)            282          1,332 
 Working capital movements 
 Decrease/(increase) in trade 
  and other receivables                                2,159        (3,036)        (1,112) 
 Increase/(decrease) in trade 
  and other payables                                     215          (130)          (343) 
 Decrease in provisions                                 (31)              -              - 
 Payments to retirement benefit 
  plan                                  8              (176)          (166)          (331) 
-----------------------------------  -------  --------------  -------------  ------------- 
 Net cash flow from/(used in) 
  operating activities                                 1,862        (3,050)          (454) 
-----------------------------------  -------  --------------  -------------  ------------- 
 
 Investing activities 
 Purchase of property, plant 
  and equipment                                            -            (4)            (5) 
 Development of intangible assets                          -           (54)          (109) 
-----------------------------------  -------  --------------  -------------  ------------- 
 Net cash flow used in investing 
  activities                                               -           (58)          (114) 
-----------------------------------  -------  --------------  -------------  ------------- 
 
 Financing activities 
 Drawdown/(repayment) of finance 
  facility                                           (3,187)          2,377          2,077 
 Principal repayment of lease 
  liabilities                                          (121)          (190)          (433) 
 Interest paid                          5               (95)           (50)          (144) 
-----------------------------------  -------  --------------  -------------  ------------- 
 Net cash (used in)/from financing 
  activities                                         (3,403)          2,137          1,500 
-----------------------------------  -------  --------------  -------------  ------------- 
 
 Net (decrease)/increase in cash 
  and cash equivalents                               (1,541)          (971)            932 
-----------------------------------  -------  --------------  -------------  ------------- 
 Cash and cash equivalents at the 
  beginning of the period                              2,053          1,121          1,121 
--------------------------------------------  --------------  -------------  ------------- 
 Cash and cash equivalents at the 
  end of the period                                      512            150          2,053 
--------------------------------------------  --------------  -------------  ------------- 
 
 

Notes to the interim results

   1              Accounting policies 

Basis of preparation

The condensed interim financial statements comprise the unaudited results for the six months to 30 June 2023 and 30 June 2022 and the audited results for the year ended 31 December 2022. The financial information for the year ended 31 December 2022 herein does not constitute the full statutory accounts for that period. The 2022 Annual Report and Accounts have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2022 was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The condensed financial statements have been prepared using the recognition and measurement requirements of UK adopted international accounting standards (IFRS) in a manner consistent with the accounting policies set out in the Group financial statements for the year ended 31 December 2022.

The condensed financial statements for the period ended 30 June 2023 have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The information in these condensed financial statements does not include all the information and disclosures made in the annual financial statements.

Going concern

The interim financial statements have been prepared on a going concern basis. The Directors have reviewed the Group's cash flow forecasts for the period to 30 September 2024 and have considered possible changes in trading performance including a further reduction in contractor numbers.

The Group continues to rely upon its asset-based lending (ABL) debt facility from Leumi to manage its short-term cash requirements. This facility is in place until October 2025 and requires the Group to meet two covenant tests on a monthly basis; a positive three-month rolling EBITDA; and a positive headroom of at least GBP400,000.

The twelve-month cashflow forecast to 30 September 2024 indicates that the Group can continue to meet the three-month rolling EBITDA covenant but will need to raise additional funds to meet the headroom covenant from January 2024. The Directors are actively discussing a number of funding options and based on progress to date, believe that the Group will be able to secure sufficient funds to continue to meet its headroom covenant over the next twelve months.

Whilst acknowledging that there is material uncertainty regarding the Group's funding position, the Directors remain confident of securing the additional funds required and consider it appropriate to prepare the unaudited interim financial information on a going concern basis.

Financial instruments

Unless otherwise indicated, the carrying amounts of the Group's financial assets and liabilities are a reasonable approximation of their fair values.

Alternative performance measures

In the reporting of its financial performance, the Group uses certain measures that are not defined under IFRS, the Generally Accepted Accounting Principles ("GAAP") under which the Group reports. The Directors believe that these non-GAAP measures assist with the understanding of the performance of the business. These non-GAAP measures are not a substitute, or superior to, any IFRS measures of performance but they have been included as the Directors consider them to be an important means of comparing performance across periods and they include key measures used within the business for assessing performance.

Net fee income

Net fee income represents revenue less cost of sales and consist of the margin earned on the placement of contractors, the fees earned on permanent recruitment and the revenue less the cost of third-party contractors for managed service and consultancy work.

NFI margin is the net fee income expressed as a percentage of revenue.

Both net fee income and NFI margin are metrics commonly used by businesses delivering recruitment services to measure the element of revenue that is attributable to the recruitment-based services that the Group provides to clients.

The Directors consider that net fee income and NFI margin are important measurements used by the Board to evaluate the performance of the Group.

Non-underlying items

The presentation of the alternative performance measures of adjusted EBITDA, adjusted operating (loss)/profit and adjusted loss before tax excludes non-underlying items. The Directors consider that an underlying profit measure better illustrates the underlying performance of the Group and allows a more meaningful comparison of performance across periods. Items are classified as non-underlying by nature of their magnitude, incidence or unpredictable nature and their separate identification results in a calculation of an underlying profit measure that is consistent with that reviewed by the Board in their monitoring of the performance of the Group. Events which may give rise to the classification of items as non-underlying include gains or losses on the disposal of a business, the proceeds from the sale of assets outside of normal trading activities, restructuring of a business, transaction costs, litigation and similar settlements, asset impairments and onerous contracts.

Adjusted EBITDA

Operating profit before non-underlying items and before the deduction of depreciation, amortisation changes and shared based payments. This is considered a useful measure, commonly accepted and widely used when evaluating business performance and used by the Directors to evaluate performance of the Group and its subsidiaries.

 
 Adjusted EBITDA 
                                               Six months     Six months           Year 
                                              to 30.06.23    to 30.06.22    to 31.12.22 
                                              (Unaudited)    (Unaudited)      (Audited) 
                                                  GBP'000        GBP'000        GBP'000 
 
 Operating (loss)/profit                            (446)             78        (1,029) 
 Add back: 
 Adjustment for amortisation & 
  depreciation                                        120            184            360 
 Adjustment for goodwill impairment                     -              -          1,952 
                                           --------------  -------------  ------------- 
 EBITDA                                             (326)            262          1,283 
 Adjustment for share based payment 
  charge                                               21             20             50 
 Add back Non-underlying items: 
 Income from trademark sale                             -              -          (950) 
 Non-underlying costs                                   -             23             23 
                                           --------------  -------------  ------------- 
 Adjusted EBITDA                                    (305)            305            406 
                                           --------------  -------------  ------------- 
 
 

Net debt

Net debt is the amount of bank debt less available cash balances and is regarded as a useful measure of the level of external debt utilised by the Group to fund its operations. Net debt is presented on a pre-IFRS 16 basis which excludes lease liabilities.

Accounting policies: new standards, amendments and interpretations

At the date of authorisation of these interim financial statements, several new, but not yet effective, standards, amendments to existing standards and interpretations have been published. None of these have been adopted early by the Group. New standards, amendments and interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the Group.

   2              Segmental information 

The basis by which the Group is organised and its operating model is structured, is by customer sectors, being the public sector and the private sector. The reporting of financial information presented to the Chief Operating Decision Maker, being the Group Board of Directors, is consistent with these reporting segments. As these reporting segments are supported by a combined back office, there is no allocation of overheads.

 
 Six months to 30.06.23 (Unaudited) 
                                         Public     Private      Total 
                                         sector      sector 
                                        GBP'000     GBP'000    GBP'000 
 Revenue                                  8,762       8,872     17,634 
 Contractor costs                       (8,140)     (8,238)   (16,378) 
------------------------------------  ---------  ----------  --------- 
 Net fee income                             622         634      1,256 
------------------------------------  ---------  ----------  --------- 
 
 
 Six months to 30.06.22 (Unaudited) 
                                         Public sector     Private      Total 
                                                            sector 
                                               GBP'000     GBP'000    GBP'000 
 Revenue                                        12,137       8,917     21,054 
 Contractor costs                             (11,137)     (8,000)   (19,137) 
------------------------------------  ----------------  ----------  --------- 
 Net fee income                                  1,000         917      1,917 
------------------------------------  ----------------  ----------  --------- 
 
 
 Year to 31.12.22 (Audited) 
                                 Public sector     Private      Total 
                                                    sector 
                                       GBP'000     GBP'000    GBP'000 
 Revenue                                22,616      18,032     40,648 
 Contractor costs                     (20,530)    (16,654)   (37,184) 
----------------------------  ----------------  ----------  --------- 
 Net fee income                          2,086       1,378      3,464 
----------------------------  ----------------  ----------  --------- 
 
   3              Revenue 

The Group's revenue disaggregated by pattern of revenue recognition is as follows:

 
 
                                       Six months     Six months      Year to 
                                      to 30.06.23    to 30.06.22     31.12.22 
                                      (Unaudited)    (Unaudited)    (Audited) 
                                          GBP'000        GBP'000      GBP'000 
---------------------------------  --------------  -------------  ----------- 
 Services transferred over time            17,615         20,985       40,484 
 Services transferred at a point 
  in time                                      19             69          164 
 Revenue                                   17,634         21,054       40,648 
---------------------------------  --------------  -------------  ----------- 
 
 
   4              Non-underlying items 
 
                                       Six months     Six months      Year to 
                                               to             to     31.12.22 
                                         30.06.23       30.06.22    (Audited) 
                                      (Unaudited)    (Unaudited)      GBP'000 
                                          GBP'000        GBP'000 
--------------------------------  ---------------  -------------  ----------- 
 Restructuring 
 - Costs related to employees                   -             23           23 
 - Goodwill impairment                          -              -        1,952 
 - Income from sale and licence 
  back of Parity trademark                      -              -        (950) 
 Total non-underlying items                     -             23        1,025 
--------------------------------  ---------------  -------------  ----------- 
 
 

Items are classified as non-underlying by nature of their magnitude, incidence or unpredictable nature and their separate identification results in a calculation of an underlying profit measure that is consistent with that reviewed by the Board in their monitoring of the performance of the Group.

   5              Finance costs 
 
                                             Six months     Six months      Year to 
                                                     to             to     31.12.22 
                                               30.06.23       30.06.22    (Audited) 
                                            (Unaudited)    (Unaudited)      GBP'000 
                                                GBP'000        GBP'000 
---------------------------------------  --------------  -------------  ----------- 
 Interest expense on financial 
  liabilities                                        94             50          143 
 Interest expense on lease liabilities                2              4            9 
 Interest income on lease assets                      -            (1)          (2) 
 Net finance costs in respect of 
  post-retirement benefits                          107            107          160 
                                                    203            160          310 
---------------------------------------  --------------  -------------  ----------- 
 

The interest expense on financial liabilities represents interest paid on the Group's asset-based financing facilities.

   6              Taxation 
 
                                          Six months     Six months      Year to 
                                                  to             to     31.12.22 
                                            30.06.23       30.06.22    (Audited) 
                                         (Unaudited)    (Unaudited)      GBP'000 
                                             GBP'000        GBP'000 
------------------------------------  --------------  -------------  ----------- 
 Recognised in the income statement 
 Current tax charge                                -              -           75 
 Deferred tax charge                             459            213          301 
------------------------------------  --------------  -------------  ----------- 
 Total tax charge                                459            213          376 
------------------------------------  --------------  -------------  ----------- 
 
 Recognised in other comprehensive 
  income 
 Deferred tax credit                           (199)          (274)        (290) 
------------------------------------  --------------  -------------  ----------- 
 
   7              Earnings per ordinary share 

Basic earnings per share is calculated by dividing the basic earnings for the period by the weighted average number of fully paid ordinary shares in issue during the period. Diluted earnings per share is calculated on the same basis as the basic earnings per share with a further adjustment to the weighted average number of fully paid ordinary shares to reflect the effect of all dilutive potential ordinary shares.

 
                          Six months to 30.06.23           Six months to 30.06.22              Year to 31.12.22 
                                (Unaudited)                      (Unaudited)                       (Audited) 
-------------------  -------------------------------  -------------------------------  ------------------------------- 
                                  Weighted                         Weighted                         Weighted 
                                   average                          average                          average 
                                    number      Loss                 number      Loss                 number      Loss 
                           Loss         of       per        Loss         of       per        Loss         of       per 
                        GBP'000     shares     share     GBP'000     shares     share     GBP'000     shares     share 
                                     000's     Pence                  000's     Pence                  000's     Pence 
-------------------  ----------  ---------  --------  ----------  ---------  --------  ----------  ---------  -------- 
 
 Basic loss 
  per share             (1,108)    103,076    (1.07)       (295)    103,076    (0.29)     (1,715)    103,076    (1.66) 
 Effect of dilutive           -          -         -           -          -         -           -          -         - 
  options 
 Diluted loss 
  per share             (1,108)    103,076    (1.07)       (295)    103,076    (0.29)     (1,715)    103,076    (1.66) 
 
 
 

As at 30 June 2023, the number of ordinary shares in issue was 103,075,633 (30 June 2022: 103,075,633 and 31 December 2021: 103,075,633). There were 8,000,000 unexercised share options which did not have any dilutive impact (30 June 2022: 8,010,000 and 31 December 2022: 8,010,000).

   8              Pension commitments 

The Group operates a small number of pension schemes. With the exception of the Parity Group Retirement Benefits Plan, all of the schemes are defined contribution plans and the assets are held in separately administered funds. The details of the Parity Group Retirement Benefits Plan are disclosed in the 2022 Annual Report and Accounts. At the interim reporting date, the major assumptions used in assessing the defined benefit pension scheme liability have been reviewed and updated based on a roll-forward of the last formal actuarial valuation, which was carried out as at April 2021.

The following principal estimates have been applied in the valuation of the pension scheme assets and liabilities in accordance with the measurement requirements of IAS 19:

 
                                    30.06.23   30.06.22   31.12.22 
---------------------------------  ---------  ---------  --------- 
 Rate of increase in pensions in    3.7-4.0%   3.7-4.0%   3.6-3.9% 
  payment 
 Discount rate                          5.2%       3.8%       4.8% 
 Retail price inflation                 3.3%       3.4%       3.2% 
 Consumer price inflation               2.3%       2.4%       2.2% 
---------------------------------  ---------  ---------  --------- 
 

The net pension scheme surplus has reduced by GBP500,000 since 31 December 2022.

   9              Related party transactions 

Transactions between the parent company and its subsidiaries, which are related parties, have been eliminated on consolidation and are therefore not disclosed.

In 2021, the Group engaged the marketing services of CRM Squad. The Executive Chairman Mark Braund is an owner and director of CRM Squad. The total value of services received from CRM Squad in the six months to 30 June 2023 was GBP38,000 (Six months to 30 June 2022: GBP31,500 and Year to 31 December 2022: GBP66,530).

   10           Events after the reporting period 

There are no events after the reporting period not reflected in the interim financial statements.

This announcement contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of Parity Group plc. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to (i) adverse changes to the current outlook for the UK IT recruitment and solutions market, (ii) adverse changes in tax laws and regulations, (iii) the risks associated with the introduction of new products and services, (iv) pricing and product initiatives of competitors, (v) changes in technology or consumer demand, (vi) the termination or delay of key contracts and (vii) volatility in financial markets.

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END

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September 29, 2023 02:00 ET (06:00 GMT)

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