PTY.L Regulatory News (PTY)

Parity Group plc  

("Parity" or the "Company") 

Trading Update

Parity Group plc (AIM: PTY), the data and technology-focused recruitment and professional services company, is pleased to issue a trading update for the financial year ended 31 December 2022 ("FY2022").

FY2022 Highlights

The board is pleased to report a significantly improved operating performance despite the expected reduction in net fee income during the year.

· Net Fee Income for FY2022 expected to be £3.5m compared to £4.1m in FY2021.

· Adjusted EBITDA(1) for FY2022 expected to be circa £0.4m vs £0.1m in the prior year.

· Significant improvement in operating performance in FY2022 with anticipated break even at Adjusted Operating profit (2) level compared to a £0.3m loss in the prior year.

· Other income in FY2022 of £1m from the sale and licence back of the Parity trademarks in the UK and EU.

· Profit before Tax for FY2022 expected to be £0.5m vs loss of £1.1m in the prior year.

During FY2022, Parity has refocused its business around recruitment, increasing customer-facing headcount and establishing an efficient operating model. This has enabled the business to significantly improve profitability during the period, and with the sale and licence back of the trademark, to deliver a profit before tax which we expect to be £0.5m.

The income from the trademark sale and licence back will enable Parity to invest further in customer-facing roles to generate new business and leverage the operating model of the business.

Mark Braund, Executive Chairman, said:

"We have successfully transitioned the business to focus on the core commercial recruitment capability of Parity. As we look forward, Parity is a more agile, albeit smaller business with a strong work culture and a much-improved focus on what we are 'great' at.

"This foundation, along with the additional funding from the sale of the trademark, creates a solid base from which we can continue to evolve the business. Whilst the outlook for the wider economy is becoming less certain, our strength in providing skilled technology resources to support the almost relentless demand for digital transformation services, places Parity in a reassuringly solid position. We aim to take advantage of the platform we have established to invest carefully in relevant new areas of business that will support longer-term sustainable profit and growth. 

"The enthusiasm, commitment and tenacity of all my colleagues is at the core of Parity's turnaround. For this and on behalf of the Board, we say a heartfelt "thank you".

"We remain focused on maintaining our positive momentum and positioning the business for further growth."

(1) Adjusted EBITDA is defined as operating profit before finance costs, tax, depreciation, amortisation and non-underlying items.

(2) Adjusted Operating profit is defined as operating profit before finance costs and non-underlying items.