InterQuest's earnings to be below expectations due to waning demand

1st Dec 2016 09:20

(ShareCast News) - Recruitment firm InterQuest expects income and earnings for the year to be below expectations, as it restructured the company following low demand in the public sector and in the agency sector.The AIM-listed company expects net fee income and earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended 31 December to be below market expectations.ECOM, the London-based digital division, had underperformed so the company carried out measures to reduce costs and restructured to counter the lower than expected volume of work from the agency sector, which reduced "significantly" from the end of the second quarter and the beginning of the third.The company said ECOM remains weaker than initially forecast but is showing signs of improvement since the summer.There had also been low demand from the public sector compared to last year, while a small number of value placement have been delayed to 2017.Looking ahead, the company said that the technology markets that it serves should deliver structural growth in the medium to long term, while it had seen an improvement in profitability since August, partly due to the acquisition of RDW, a search business.Gary Ashworth, non-executive chairman, said: "I am pleased with the progress that the new management team has made in restructuring underperforming divisions of the company but acknowledge the challenges the business has faced this year. We continue to focus on building InterQuest to be the market leading 'digital transformation' recruitment business."Shares in InterQuest were down 7.45% to 1107 GMT.