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Parity Group - Interim Management Statement

Parity Group - Interim Management Statement

Parity Group plc, the UK IT services group, today issues its Interim Management Statement covering the period from 1st July 2009 to 12th November 2009.

Overall trading during the second half of 2009 has been in line with management expectations. We are seeing no material change in the economic or market conditions, with clients remaining cautious about spending decisions thereby providing us only short-term visibility of revenues.

Our Resources division, dominated by our IT contractor business, is performing well in a very depressed IT employment market. A focus on the high value skills, excellent service delivery and tight cost control are helping us to maintain revenues and profitability despite pricing pressures. We have focused our sales activity to accelerate a diversification in our client base in both the public and private sectors.

In the Solutions business, despite continued pressure on clients' discretionary IT spending, we have seen sales improve this year driven by our greater market focus. As expected this is slowly improving profitability despite price pressure which remains very strong from competition of all sizes. However, volatility in the market overall remains high and even in the short term visibility is low.

We are now hiring selectively to increase the size of our delivery team. In order to remain competitive and gain access to key skills, we have started to sub-contract increasing amounts of project and support work to our offshore partner in India in a measured deepening of our trading relationship.

There has been no material change to the financial position of the Group since the announcement of the interim results on 27 August 2009. Our closed defined benefit pension scheme has been the subject of a triennial valuation. This is now close to completion and we do not expect any increase in the Group's annual cash contribution. Our invoice discounting facility continues with no material changes to terms and we have no term debt.

As we do not expect any near-term strengthening of the markets in which we operate, we continue to manage the business prudently, keeping costs under control and investing carefully to take advantage of opportunities that we see to create a stronger business despite the economic environment.


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