Last checked at 27 Feb 2019 15:30
Dillistone Group Plc
("Dillistone" or the "Group")
Trading Statement, Update and
Notice of Results
The Board of Dillistone Group Plc, the AIM quoted supplier of software for the international recruitment industry, is pleased to provide an update on trading and plans to consolidate its UK offices.
In line with market expectations, the Group expects to announce a small operating profit for the year to 31 December 2018, prior to acquisition related items, despite the previously announced loss of a major client and the continuing significant investment in the GatedTalent division.
The current year has begun well in each of the three divisions. However, the Board is cognisant of the economic challenges that the year may bring.
With increased space now available at its offices in both Basingstoke (where it has entered into a new ten year lease) and Eastleigh, the Directors are taking the opportunity to reduce the number of UK offices from three to two by exercising an option to break the lease of the London office later in the year.
The majority of our London based staff will be given the opportunity to relocate to Basingstoke or Eastleigh. The Board anticipates that the efficiencies gained from merging the function teams across the Group into fewer locations will allow the Group to maintain current levels of client service and product development investment while delivering a significant reduction in costs from 2020 onwards. Nevertheless, this process will inevitably lead to the Group incurring restructuring costs this year, which are currently estimated to be in the region of £500,000 to £900,000. An update on the cost of the restructuring and the anticipated savings will be provided later in the year.
The Board remains committed to investing and supporting the Group's core products and remains excited by the potential of GatedTalent which it anticipates will move into profit in the final quarter of 2019.
The Board currently expects that the Group will deliver a profit before tax in 2019 which will be at least comparable with 2018 (before restructuring and acquisition related costs). The profit is expected to grow strongly in 2020 albeit, against the backdrop of economic challenges, will be below current market expectations. However, importantly it is expected to comprise a higher level of recurring rather than transaction based revenues and therefore represent more sustainable profits, as the benefits of the restructuring and the investment in GatedTalent start to materialise.
The Directors anticipate releasing the Group's preliminary results for the year ended 31 December 2018 by 30 April 2019.
Commenting on the start to the year, Jason Starr, Chief Executive of Dillistone Group, said:
"We've enjoyed a positive start to trading this year across each of our business units. The changes we are making to our operating structure allow us to continue to invest in and support our traditional markets with a far leaner cost base. The conversion of GatedTalent to a B2C service with a significant recurring revenue element means that, once it reaches profitability later this year, it should become increasingly cash generative, while also supporting sales of our recruiting software platforms."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Enquiries:
Dillistone Group Plc |
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Mike Love | Chairman | Via Walbrook PR | ||
Jason Starr | Chief Executive |
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Julie Pomeroy | Finance Director |
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WH Ireland Limited (Nominated adviser) |
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Chris Fielding | Managing Director - Corporate Finance & COO CIB | 020 7220 1650 | ||
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Walbrook PR |
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Tom Cooper / Paul Vann |
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| 0797 122 1972 | ||
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| tom.cooper@walbrookpr.com | ||
Notes to Editors:
Dillistone Group Plc (www.dillistonegroup.com) is a leader in the supply and support of software and services to the recruitment industry. It has five brands operating through three divisions: Dillistone Systems, which targets the executive search industry (www.dillistone.com); Voyager Software, which targets other recruitment markets (www.voyagersoftware.com); and GatedTalent, the next generation executive recruitment platform (www.GatedTalent.com).
Dillistone has made three acquisitions: Voyager Software in September 2011, FCP Internet in July 2013 and ISV Software in September 2014. The Group operates under the FileFinder, Infinity, Evolve, ISV and GatedTalent brands.
Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006. The Group employs over 100 people globally with offices in London, Basingstoke, Southampton, Frankfurt, New Jersey and Sydney.