(Alliance News) - Parity Group PLC on Tuesday announced the proposed sale of its primary operating subsidiary Parity Professionals Ltd to Network Ventures Ltd.
Parity, a London-based data and technology-focused professional services firm, said the sale would be for up to GBP3 million.
Under the proposed sale, Parity would become a cash shell. Parity Professionals in 2022 contributed GBP378,000 in pretax profit to Parity.
Parity shares rose 13% to 2.03 pence each on Tuesday afternoon in London.
"The board has worked to remove the substantial overhead costs associated with the previous management team's failure to build a profitable consulting business and has reinvested a small portion into re-establishing Parity's heritage as a well-recognised recruitment brand. After years of underinvestment in the group's business, the team has rebuilt the core recruitment business into a position of strength in the public sector market. However, the group remains subscale and faces significant challenges to source investment for growth," the company said.
Looking ahead, the company said it will prioritise resources within the public sector, scaling back business initiatives targeting the private sector, which reduced costs.
"The board feels that the group's core business is sound and Parity's position in the public sector is attractive but that it is subscale and would benefit from being a part of a larger group. The board has exhausted a number of initiatives to source additional funding to invest in further growth, none of which it believed were in the best interests of shareholders," the company said.
The proposed sale is subject to shareholder approval, with a general meeting to be held on December 7.
By Tom Budszus, Alliance News slot editor
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Parity (PTY)