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2 Feb 2011 07:00
PRESS ANNOUNCEMENT |
2 February 2011
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PENNA CONSULTING PLC ("Penna" or "the Group")
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Trading update |
Penna Consulting Plc (PNA:AIM), the international human resources consulting group, today issues a trading update for the year ending 31 March 2011.
Whilst we are seeing a strongly rising trend in demand for Penna's core outplacement services within the Public Sector we have experienced delays in the commencement of projects and accordingly there will be only a modest contribution from these new contracts in the year ending 31 March 2011, resulting in profits for the period being materially lower than market expectations.
During the year we have won 57 major new outplacement contracts and we are in advanced negotiations with a further 55 organisations. These organisations include central and local Government bodies, non departmental public bodies, police authorities, universities and the Health Service. We have been awarded significant and exclusive contracts by 33 London Boroughs, 11 county and city councils, 5 police authorities and 3 health authorities. However, Public Sector bodies are planning carefully the difficult and complex process of restructuring and seeking to handle implementation of each phase of redundancy with sensitivity. As a result we are finding that the effective commencement of each project is later than anticipated.
Outplacement accounts for around half of Penna's net fee income and the remainder comes from recruitment related services. In our Interim statement in November 2010 we stated that we expected recruitment demand to remain subdued during the balance of the year and that we had taken action to align our cost base accordingly. Headcount was 497 at the beginning of the company year and is now 375 and as a result personnel costs have been reduced by £5.2m on an annualised basis. Over the same period annualised fixed costs have been reduced by £0.6m.
Cash at 31 December 2010 was £2.1 million and our only debt is a finance lease of £1.5m. Committed bank facilities of £3.0 million remain undrawn.
In summary, we had expected that the increase of outplacement revenue from the public sector would offset some of the inevitable downturn in recruitment. However, because of the delayed timing of a significant proportion of outplacement revenue we now believe that profits (before exceptional items) in the year ended 31 March 2011 will be nominal.
The year ending 31 March 2012 will see the benefit from the pipeline of work carried forward and present indications are that our financial performance in that period will show significant improvement over the current financial year.
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Enquiries |
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Penna Plc |
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Gary Browning, Chief Executive | +44 (0)20 7332 7754 |
David Firth, Finance Director | +44 (0)20 7332 7754 |
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Hawkpoint Partners Limited | +44 (0)20 7665 4500 |
Graham Paton / Serge Rissi |
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Collins Stewart Europe Limited | +44 (0)20 7523 8000 |
Adrian Hadden/Ileana Antypas |
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