All in the price30 May 2019 17:21
The Board remains confident that its policies in relation to these matters are appropriate. However, one allegation concerned the Group's historical compliance with National Minimum Wage Regulations 2015. The Group has been engaging with HMRC in order to quantify underpayments made in the past to workers, over a number of years prior to 2018. Potential underpayments identified by the Group relate to a limited number of food production facilities and the payment for preparation time, which is generally the time spent donning workwear. A provision of GBP4.4m had been made for estimated additional costs in the Group's accounts for the year ended 31 December 2018. This provision was included as part of the GBP20m of exceptional costs announced in the Company's trading update on 8 January 2019. However, as a result of legal advice, the Board has revised its estimate and deems it prudent to increase that charge by GBP3.5m taking total exceptionals in the period to GBP23.5m. The additional provision referred to above is exceptional and is the only change against market expectations identified by the Board.
Once the audit process is complete, Staffline will release its preliminary results for the year ended 31 December 2018. At that point, the Board expects to report, subject to audit completion, an underlying trading performance for the year ended 31 December 2018 in line with expectations and maintains its expectations for the current financial year. As previously announced, the Group expects to report net debt of c.GBP63m (unaudited) as at 31 December 2018. Furthermore, the Group can confirm that, of the items behind the working capital increase at 31 December 2018, there has since been an improvement of approximately GBP10m.
Having now clarified the expected financial impact on the Group, the Board has requested that suspension be lifted and trading in the Company's shares will resume with effect from 7.30am on 12 March 2019.
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