InterQuest Cancels Dividend On Profit Fall, To Buy UK Staffing Firm

LONDON (Alliance News) - Technology recruitment company InterQuest Group PLC on Thursday suspended its dividend on the back of a drop in adjusted annual profit, and said that it will acquire majority stake in a UK staffing company.

Shares were down 18% on Thursday at 18.00 pence each.

On a statutory basis, InterQuest swung to a 2017 pretax profit of GBP748,000 from a loss of GBP739,000 in 2016. However, before exceptional items, its pretax profit declined to GBP2.0 million from GBP2.7 million.

Revenue for the year decreased by 5% year-on-year to GBP136.0 million from GBP143.6 million, while net cash from operations also fell to GBP2.2 million from GBP2.5 million.

As a result, InterQuest will not be returning any cash to shareholders for 2017 having paid out 1.5 pence per share for 2016.

The company said it has been undergoing a period of restructuring, leading to the drop in profit. Defence costs in the takeover bid from 58% majority shareholder Chisbridge Ltd totalled GBP450,000, and the decline in revenue was attributed to a decline in contractor numbers.

InterQuest also said Thursday it is to acquire up to 95% on the share capital of Albany Beck Consulting Ltd, a UK-based staffing and consultancy firm.

InterQuest will issue up to 13.3 million shares to Albany Beck shareholders as consideration. Albany Beck's revenue for 2017 was GBP1.3 million and it recorded a pretax loss of GBP100,000.

On the acquisition, Chief Executive Chris Eldridge commented: "Albany Beck is an excellent fit for InterQuest Group, adding specialist skills in the Risk, Regulation and Compliance sectors of the financial markets."

"We are excited about developing the Albany Beck brand, particularly in the US and European markets."

Chairman Gary Ashworth said on the results: "The acquisition of RDW in 2016 had a positive material impact on the financial performance in 2017. The legacy businesses continued to be restructured in order to address underperformance and have the right management and personnel to focus on the niche markets that are growing in the face of the challenges brought on by Brexit.

"Our recruitment process outsourcing business, InterQuest Solutions, added a further customer to the practice during the year and continues to be a focus for designing and delivering high value resourcing solutions."

Ashworth continued: "Looking forward, the group intends to continue to invest in our high performing brands and in our staff whilst focusing on paying down debt."