UK – Parity Group H1 revenue and net fee income down, but outlook remains positive

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September 30, 2022

Technology recruitment firm Parity Group plc (PTY:LSE) today reported revenue of £21.0 million for the six months to June 30, 2022, down 19.0% from at the same time last year.

The group said the first half of 2022 was a period of stabilization and development for the group.

“Having realigned the strategy around its core recruiting competencies in the second half of 2021, the group has re-established a stable platform for the business and in doing so successfully achieved its first objective since refocusing on services. recruitment, with a return to profitability in both adjusted EBITDA and operating profit during the period,” the company said.

(in thousands of £) S1 2022 S1 2021 To change
Revenue 21,055 25,998 -19.0%
Net commission income 1,917 2,322 -17.4%
Adjusted EBITDA 305 192 58.8%
Operating profit/loss 78 -382
Loss before tax -82 -491
Loss for the period -295 -525

Parity noted that while net commission income was down year-over-year, it was up 9% from H2 2021.

Thanks to the actions taken by the group in the second half of 2021 to realign its costs and focus its activities on recruitment, Parity was able to reduce its overall cost base and this enabled it to generate an adjusted EBITDA of £305,000. The group also recorded a reduced loss before tax.

The group also noted that operating costs were reduced to £1.8 million, 11% lower than the previous half and 27% lower than the first half of 2021. This cost reduction has been achieved despite an £80,000 investment in the first half of 2022 in permanent small business development. Recruitment team.

Mark Braund, Executive Chairman of Parity Group plc, said: “Having successfully rebuilt the core recruitment business platform within Parity, we are beginning to see this capability having a positive impact on the performance of the company.

“During the period, we have significantly improved client relationships and the size and quality of Parity’s virtual bench of qualified technology entrepreneurs, re-establishing it as one of the best of its kind in the industry market. audience,” Braund added. “With improved mobility and skills transfer, Parity’s access to these skilled resources will be increasingly valuable as we focus more of our attention on the commercial (private) sector.”

Revenue by segment

(in thousands of £) S1 2022 S1 2021 To change
Public sector 12,137 18,700 -35.1%
Private sector 8,917 7,298 22.2%
Total income 21,055 25,998 -13.2%

Looking ahead, Braund said, “The remainder of the year is focused on maintaining our positive momentum and positioning the business for further growth in 2023.”

In the first half of 2022, the group set up a new permanent recruitment team and reinforced its investments in new commercial capacities. The returns from these investments should begin to be felt in the second half of 2022 and into 2023. Parity said it will continue to invest in frontline resources to support growth, including in areas where there is an opportunity to develop higher-margin businesses using Parity’s access to high-value scarce resources.

Despite the current economic conditions and uncertainties, the contract recruitment market and the public sector remain resilient with strong demand for qualified resources in the group’s key areas of expertise (technology, data and transformation) resulting in higher billing rates and margins.

Parity added that it is again working with public sector procurement bodies to bid for new and existing multi-year frameworks. The new executives give Parity access to new clients and roles within the public sector that will support growth in H2 2022 and beyond.

“Having achieved its initial objective of refocusing on recruitment and demonstrated its ability to do so profitably, the group is now focusing on developing new businesses in the public and private sectors to increase net commission income and improve the bottom line,” the company added.

Parity Group shares closed at £8.50 yesterday, no change in the day. The company has a market cap of £8.28 million.

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