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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