Recruitment firm Staffline Group PLC (LON:STAF) saw its shares slump on Friday after an ongoing review of its balance sheet resulted in further write-downs, denting its profit forecasts for the year.
In an unscheduled trading update for the year ending 31 December, the AIM-listed firm said the charges meant full year adjusted operating profit was expected to be “materially below” their previous expectations, adding that it was considering “certain strategic options” to try and cut down its debt pile in the first half of 2020.
However, the group said its 2020 financial year had “started well” and that its expectations for the current year were unchanged.
House broker cuts target price
In the wake of the profit warning, analysts at Staffline’s house broker Liberum trimmed their target price to 100p from 125p while also reducing their 2019 earnings (EBIT) forecasts for the group to £5mln from £11mln to reflect the worse financial position.
However, the broker added that they saw “plenty of strategic options” for the group to improve its balance sheet, notably selling off its Irish business.
Investors seemed less optimistic as the shares tumbled 9.6% to 66.9p in late-morning trading.