Impellam under pressure from government 'disruption'

15th Dec 2016 09:18

(ShareCast News) - Managed services and specialist staffing expertise provider Impellam issued a trading update prior to entering the closed period for its full-year results on Thursday, for the 52 weeks to 30 December.The AIM-traded firm said, notwithstanding the well-publicised disruption in the UK healthcare market and the increased uncertainty following the UK referendum, the board still expected to deliver 2016 EBITDA broadly in line with market expectations.Trading performance in the UK has been mixed, it reported, with some of its UK specialist businesses seeing weaker performance compared to the same period last year."We continue to be impacted by disruption in the healthcare markets as a result of Government announcements regarding caps on locum pay rates and agency margins," the board stated."This has impacted performance within our UK doctors business."Impellam's managed services businesses also continued to perform well, benefiting from 10 new client wins including Willis Tower Watson, Veolia, Johnson Matthey and King's College Hospital and had a strong pipeline."Since the announcement of the interim results on 30 July, the company has continued to see strong performance across its US businesses," the board added."The integration of the Bartech business continues to proceed as planned and the business has performed well in 2016 with some notable new client wins and extensions of services."It said delivery of the synergy cost benefits following the combination of the legacy Impellam and Bartech businesses were in line with management's expectations, and the weakening of sterling provided a currency translation benefit."Our Australian business, whilst relatively small continues to perform well with sizeable new contract wins in our Comensura business including New South Wales and New South Wales Justice."On a group level, cash generation continued to be strong and the board said it expects net debt to be materially lower than at the end of 2015 and in line with market expectations."Whilst the board is pleased with the positive results from Impellam's UK Managed Services, US and Australian businesses and the progress made in 2016 with the Group's strategic plan, it recognises the prevailing uncertainty in the UK and will therefore continue to manage the business prudently, whilst investing in opportunities to drive profitable growth."