Parity Regulatory News (PTY)

Dissemination of a Regulatory Announcement that contains inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.

04 August 2023

Parity Group plc

(the "Parity" or the "Company")

Trading statement

Parity Group plc (AIM: PTY), the data and technology-focussed recruitment and professional services company, announces a trading update for the six months ended 30 June 2023.

During H1 2023, Parity successfully won a place on the coveted public sector RM6277 framework, which has an estimated spend of circa £2bn over the next four years, though it is not possible at this stage to quantify what level of revenue might accrue to Parity. This framework, which went live on 25 July 2023, represents a significant opportunity for Parity to expand further into the public sector at a time when there are increasing headwinds affecting the broader recruitment market.

In line with many others within the recruitment sector, Parity has seen market conditions become more challenging over recent months with economic uncertainty resulting in clients and new business opportunities deferring hiring decisions. As a result, we are expecting first half revenue to be 10% lower than that achieved in the second half of 2022.

In spite of the lower H1 performance, the business has improved its working capital management and reduced net debt to £0.7m as at the 30 June 2023 (compared with £2.3m net debt as at 31 December 2022).

With market conditions not expected to improve in the near term and a key client signalling a shift towards a more global supply chain, Parity is prioritising resources to exploit its strengths and opportunity within the public sector, and in particular the new RM6277 framework. As a consequence, the new business initiatives targeting the private sector, which included permanent recruitment services, have been scaled back and with a resultant reduction in headcount.

Historically, Parity's core business, servicing contract recruitment within the public sector, has been one of the most resilient areas when recruitment markets turn down. The Company sees this as a core strength of the business and will be looking at how the Company can leverage this to maximise value for shareholders.