Struggling recruiter Staffline warns on profit
UK recruitment firm Staffline has warned its profit will be below its forecast as it deals with the costs of an ongoing accounting review.
The board said in December that it expected a full year adjusted operating profit of approximately £10m to £12m.
Staffline issued three profit warnings in 2019, a difficult year for the company in which it delayed publishing its annual results and its auditor PwC resigned.
It has also been challenged by a difficult hiring environment. In September, it said: “Weak consumer confidence has weighed on our end customers, particularly in food and retail, which has had a direct impact on demand for Staffline’s services.”
The firm said today: “Although the year end audit process, with our new auditors, Grant Thornton, is on-going, we have already identified that it is appropriate to increase certain provisions and make further write downs.”
Today, Staffline said it is “actively considering certain strategic options which may significantly reduce net debt during the first half of 2020”.
It said the ongoing accounting review had “identified that it is appropriate to increase certain provisions and make further write downs”.
“Due to these net charges, the board now expects the group to report full year adjusted operating profit (being profits before interest, tax and non-underlying charges) for the period ending 31 December 2019 materially below our previous guidance.”
Staffline added that its relationships with its lenders are on a good footing, “and consequently the Board does not anticipate any covenant issues”.