Impellam Expects Moderate Earnings Drop
Impellam Group plc has issued the following trading update ahead of the Group's preliminary results for the year ending 31 December 2008 which will be announced in early March 2009.
At the time of our interim results announcement in early September, we reported that we were seeing some weakness in our UK professional and technical staffing segment, most noticeably in the banking, accounting and legal markets. We also commented that we had yet to see the normal seasonal growth in our traditional market place and as a consequence we were entering the Group's traditionally stronger second half of the year with our UK and US Commercial staffing segments under pressure.
Overall, whilst trading in September was in line with our expectations, trading in October and November has become increasingly tougher. In common with other staffing companies, this has been most noticeable in our permanent placement markets and, to a much lesser extent, in our temporary markets as clients and candidates adopt more cautionary behaviour reflecting the lack of confidence in the wider economy.
With challenging market conditions and slowing activity, the Group's headcount and cost base is being actively managed to reflect the lower levels of activity. This is in addition to reductions from the ongoing integration process as the Group repositions itself in line with its stated strategy.
As a consequence the Board now expects that, on a proforma basis, underlying earnings for 2008 will be moderately below market expectation.