leadf
logo-loader
viewParity Group PLC

Parity shares under the cosh after losing staffing contract with Scottish government

Parity expects the loss of the contract to drag full-year revenue 10% below market forecasts

Parity
The announcement follows a profit warning in November

Parity Group PLC (LON:PTY) shares plunged after the recruitment and tech consultancy said the Scottish government has decided against renewing a staff placement contract.

The company will continue to generate revenue from the existing staff placements it has made under the contract for the next two financial years but will not make any new placements.

READ: Parity plunges as it issues profit warning amid large contract delay

Parity said while the contract has been “significant” in revenue terms, it has provided “relatively low” margins.

The revenues lost from the loss of the contract will be offset by costs savings from no longer carrying out the work under the agreement with the government.

For this reason, it does not expect a “material impact” on profits.

Parity continues to expect to meet market forecasts for profit in the current financial year.

However, the firm expects revenue will be 10% lower than analysts’ estimates.

“In the longer term the end of this contract will improve the group's net margin performance albeit from a lower level of revenue, consistent with the longer term direction of travel for Parity,” it said.

Matthew Bayfield, who was appointed chief executive in January, will announce his new strategy for the business at the full-year results on April 16.

Parity issued a profit warning in November after a delay in the extension of a large contract continued into the second half.

Quick facts: Parity Group PLC

Price: 9.05 GBX

LSE:PTY
Market: LSE
Market Cap: £9.29 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Parity Group PLC named herein, including the promotion by the Company of Parity Group PLC in any Content on the Site, the Company receives from...

FOR OUR FULL DISCLAIMER CLICK HERE

Parity Group present at the Proactive One2one virtual investment forum

Parity Group's (LON:PTY) CEO Matthew Bayfield, CFO Mike Johns pitch to investors at the Proactive One2one virtual investment forum. Parity helps organisations find the right people, skills and data to support confident data-led business decisions. Specifically, we advise on data and we...

on 20/11/20

2 min read