Business

Recruitment firm Staffline issues fourth profit warning in a year

Staffline has a number of operations in Northern Ireland
Staffline has a number of operations in Northern Ireland Staffline has a number of operations in Northern Ireland

STAFFLINE, the parent company of a number of Northern Ireland recruitment firms including Grafton, Diamond and PeoplePlus, has issued its fourth profit warning in less than a year.

It comes after it and auditor Grant Thornton, which is reviewing its books, found the business will need to reduce the value of some assets.

"We have already identified that it is appropriate to increase certain provisions and make further write-downs," the company said in a statement.

It added: "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 December 31 last materially below our previous guidance."

The expectations for the 2020 financial year remain intact. The business said it has a strong relationship with bank lenders, so is unlikely to face any covenant issues.

The company's shares have plummeted over the last year, losing nearly 95 per cent of their value since the beginning of 2019.

In May last year, it nearly halved profit forecasts, blaming Brexit uncertainty. Shares lost half their value in the wake of the news.

And just a month later the business was forced to scrap its dividend and announced plans to raise £37 million in a bid to cut debt.

It also warned that the bill for not properly following minimum wage rules between 2013 and 2018 was set to almost double to £15.1 million. This time shares lost almost a third of their value.

Staffline, which is headed up locally by Tina McKenzie, is the largest recruitment agency in Northern Ireland and second biggest on the island, where it employs more than 350 direct staff and up to 10,000 contractors.