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Staffline stumbles as it warns on 2019 profits and slumps to half-year loss

The recruiter blamed a delay to the publication of its 2018 results as well as the “unprecedented levels of uncertainty” associated with Brexit for its woes

Staffline - Staffline warns on 2019 profits as it slumps to half-year loss

Staffline Group PLC (LON:STAF) shares plunged on Tuesday as it issued a profit warning and slumped to a half-year loss.

As a result of “weak consumer confidence” denting demand for its services and “unprecedented levels of uncertainty” associated with Brexit, the AIM-listed recruiter said it now expected to reports an adjusted operating profit of just £20mln for the full year, with the near-term outlook also unclear.

READ: Staffline plans £41mln fundraising to cut debt as it slumps to 2018 loss

The gloomy assessment came as the group swung to a £7.7mln pre-tax loss from a profit of £10.5mln in the six months ended 30 June, despite revenues rising 11.1% to £534.6mln.

Staffline blamed a “slowdown” in new contract momentum following a delay to the publication of its final results for 2018 earlier this year.

The company’s shares were suspended for six weeks between January and March after PWC, its auditor, delayed the company’s annual results to investigate allegations that it had underpaid workers. The results were meant to be published in January.

Chris Pullen, Staffline’s chief executive, said the “uncertainty” created by the delayed results had been compounded by a “challenging trading environment” and as a result, the company’s performance would be more heavily weighted than usual towards it final quarter.

However, Pullen said the firm was “convinced” the challenges facing it were short-term and that it would be able to return to future growth.

Investors, however, were unconvinced as the shares tumbled 20.1% to 123p in early trading.

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Quick facts: Staffline

Price: 96 GBX

AIM:STAF
Market: AIM
Market Cap: £661.73 k
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