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Pinnacle Staffing Group plc - Trading Update

Pinnacle Staffing Group plc - Trading Update

Pinnacle Staffing Group plc, has provided an update on trading for the year ended 4 January 2009 and prospects for the current year, ahead of its preliminary results announcement on 27 March 2009.

Based on unaudited management accounts, turnover for the year was approximately 12% down on 2008 at around 38m (2008: 43.4m).
The Group's core Nursing Division which includes its key brand, the British Nursing Association, broadly maintained its turnover with sales for the year of approximately 24m. Medical Services has seen a substantial fall in turnover to approximately 6m (2008: 13.0m) caused principally by the withdrawal from the NHS North Central London Master Vendor Agreement for the supply of allied health professionals. During 2008, the Group invested in replacing its IT network infrastructure and introduced a new billing and payroll system. The results for the year will include the full costs of installing the new systems which amounts to 450k. The loss for the year before amortisation and depreciation but after taking into account the IT expenditure is expected to be approximately 1m.

Year end net borrowings are anticipated to be 2.2m (6 January 2008 1.9m). It should however be noted that the financial year end does coincide with the slowest point of the Group's trading cycle. The Group continues to trade within its existing bank facilities and following the 500,000 unsecured personal guarantee provided by Executive Chairman Tom Charlton, remains in compliance with its banking covenants.

The board is confident that the results for 2009 will record a substantial improvement in the performance of the business. The Group's main objective is to return the business to pre-tax profitability as soon as possible. The Board anticipates the turnover of the Nursing division will increase as a result of investment in the branch network of the British Nursing Association ('BNA') and the development of its other specialist nursing brands. Within the Medical Services division, the existing doctors recruitment business has been reorganised with the introduction of an experienced management team which will aim to capitalise fully on its national framework position. The Group is also working to improve the supply of overseas candidates to meet the existing strong demand for healthcare professionals. Although the overhead cost base has already been significantly reduced, the Board will also continue in 2009 to look for further savings which can help provide the funds necessary to grow the business.

The Board is also pleased to announce the award to the British Nursing Association of the first major NHS contract since Pinnacle demerged from Nestor Healthcare in September 2006. BNA has, subject to contract, been selected by the Bristol and Weston NHS Purchasing Consortium to act as the primary supplier of agency nurses for Acute Trusts within the Bristol, Bath, Gloucester and Weston Collaboration. Commenting on this contract, David Hope, Chief Operating Officer and Finance Director said:
"We are all delighted at the award of this contract as it gives BNA the opportunity to once again work in partnership with NHS Trusts to deliver specifically tailored, cost-effective and flexible staffing solutions. We look forward to working closely with the Consortium and to developing closer relationships with other Trusts nationwide."

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