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InterQuest Group plc Trading Update

InterQuest Group plc Trading Update

InterQuest Group plc (AIM: ITQ), the specialist technology recruitment group, has provided an update on trading.

As we noted earlier in the year we have continued the restructuring of our business to align our strategy towards sectors of the market we believe will provide us with increased opportunities for future growth. We have made deliberate and targeted investments in several areas including our first overseas office in Singapore, consolidating our Financial Services businesses onto a single operating platform in a new office in Canary Wharf, investment in new fee earners and migration of all of our candidate-centric recruitment business into a single, separate practice aimed at placing niche candidates into niche roles rather than just filling vacancies.

We have made these investments for the medium/long term at the expense of short term 2012 profit and are confident that we are building a platform for increased organic growth in the future.

Some of our markets, particularly financial services, remain sluggish and visibility is poor however we expect to achieve low single digit growth in NFI in 2012 compared to prior year and several of our niche businesses continue to demonstrate encouraging growth. Correspondingly we have not seen the level of growth that we anticipated, particularly in permanent fees, in the period since late summer which is traditionally our strongest trading period. As a result, the Board expects that the underlying EBITDA for the year will be in the region of &pound2.2m (adjusted to remove the impact of charges related to share based payments). This does not include an exceptional credit to our income statement arising from the settlement of our warranty claim against the vendors of CCL which is expected to make a positive impact of &pound1.0m to the profitability of the Group with a positive cash impact this year of approximately &pound0.85m after paying costs associated with the claim.

Our balance sheet and cash collection remain strong and year end group net debt is expected to be similar to, or slightly less than 31 December 2011.

Despite current headwinds the Board remains firmly committed to its strategy and to building a strong platform for long term organic growth. We have made significant investment into the business and remain confident that our strategy will see us emerge as a much stronger IT recruitment business that is better positioned with our clients and better able to capture opportunities for growth.

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