Sign up
Tech Capital

Parity plunges as it issues profit warning amid large contract delay

The group said that despite progress in revenues, adjusted pre-tax profits would be around breakeven for the second half of the year
Profit decline
Parity also said it had begun a review of project profitability and staff utilisation

Shares in recruitment and tech consultancy Parity Group PLC (LON:PTY) plunged in late-afternoon trading Friday as it issued a profit warning for the full year after a delay in the extension of a large contract continued into the second half.

The group added that even if the contract was eventually approved, its scope would be “reduced” and despite progress in revenues, adjusted pre-tax profits would be around breakeven for the second half of the year.

READ: Parity shares gain as it expects double-digit growth in first-half profits

Considering the pressures on the business, the firm said it had initiated several actions including a review of project profitability and staff utilisation with cost reductions which would benefit 2019 as well as a restructuring of its Parity Consultancy Services (PCS) division to focus on “new Data consultancy opportunities”.

Parity also said it was re-prioritising its pipeline and relationship management process to “ensure appropriate engagement” on fewer but more likely and more profitable projects.

As a result of the initiatives, the company expected to incur around £300,000-£400,000 of non-recurring costs in restructuring the PCS division.

Shares were down 29.4% at 6.9p.

-- Adds share price --



Register here to be notified of future PTY Company articles
View full PTY profile View Profile
View All

Related Articles

Financial chart
The portfolio analytics platform operator has been shrewd in its acquisition policy and the purchase of Delta from UBS may just be the best acquisition yet

© tech Capital 2018

Tech Capital, a subsidiary of Proactive Investors, acts as the vanguard for listed tech companies to interact with institutional and highly capitalised investors.
Headquartered in London, Tech Capital is led by a team of Europe's leading analysts and journalists, publishing daily content, covering all key movements in the Technology market.