Last checked at 23 Jul 2008 07:00
23 July 2008
Parity Group plc
("Parity" or the "Company")
Trading statement
The Company makes the following trading statement which will be set out in a circular being sent to shareholders today in relation to the proposed disposal of Parity Training Limited to Xpertise Group PLC announced today for a total cash consideration of £4.775 million ("Disposal").
Following completion of the Disposal, Parity will be focused on its two main divisions, Resources and Solutions. Since the announcement of the Company's interim management statement on 2 May 2008, these businesses have traded in line with management's expectations. Improvement in working capital has been, and will remain, a high priority. At the end of June 2008 net debt was significantly lower than expectations and lower than at the end of 2007.
Resources has continued to see strong demand with gross margin rates continuing to improve over the same period in the prior year. In addition, Resources has performed strongly in the public sector through the Catalist framework, having grown its public sector revenue by over 10 per cent. in the year to date, driven by 28 new public client wins this year including the Land Registry and the Ministry of Defence. Within Resources, the Company is keeping discretionary spend tight whilst looking to take advantage of market opportunities that are continuing to emerge. Solutions, having seen some delays in the first quarter of 2008 in the award of contracts, responded with highly focussed selling activities and cost reductions aimed at reducing a small excess of capacity, and an ongoing squeeze on indirect costs. This has resulted in an improvement in contract wins, as illustrated by the recently announced five year extension to the framework agreement with the Charity Commission, although the full benefit of these measures is not expected to be seen until the third quarter.
As stated in Company's interim management statement on 2 May 2008, Training experienced a weak first quarter due to delays in orders from clients. However since then, significant improvement in demand has been seen which, combined with some further cost reductions, is expected to deliver a strong second quarter and which is anticipated to continue in subsequent quarters.
The Company confirms that interim results for the six months ended 30 June 2008 will be released on 28 August 2008.
Enquiries:
| Parity Group PLC Alwyn Welch, Chief Executive Officer Ian Ketchin, Finance Director
| 0845 873 6942 |
| Arbuthnot Securities Limited Alastair Moreton/Richard Tulloch
| 020 7012 2000 |
| The Hogarth Partnership John Olsen/Sarah Richardson
| 020 7357 9477 |