Parity heading in the right direction

16th Aug 2011 13:24

IT consultancy and project manager Parity is moving in the right direction, the company claimed, as it crept back into the black in the first half of the year.For the six months to 30 June earnings before interest, tax, depreciation and amoritsation (EBITDA) moved into positive territory at £0.11m, versus a £2.11m loss the year before. The company reduced its pre-tax loss to £4.1m compared to £1.6m the same period the prior year. Although revenue was down from the previous year, sliding to £40.8m from £52.6m the year before, out-going costs have been significantly reduced. Cash at the end of the reporting period was up from £2.6m a year earlier to £6.6m, reflecting the £6.43m the company raised through its share placing in May."After a lot of hard work internally during the second half of last year, the benefits can be seen in these results," chairman Philip Swinstead claimed."Our markets remain challenging, particularly in the government sector; but growth in the Resources commercial business has been encouraging," he added.Last year the group identified two further key areas to reduce costs which will see its information technology (IT) systems move back in-house and excess leasehold property space being marketed. The group admitted that, "it continues to be a year of consolidation and of building of business processes to prepare for further improvements in performance next year."Obviously the current economic situation and government cutbacks are not helpful in the short term; but the more stable platform does provide the opportunity to make careful moves into the new markets outlined previously, in the expectation of competitive advantage in future years." Trading in the second half to date has been in line with the board's expectations. The group plans to focus on growing their revenues and improving margins after a difficult 12 months. Broker Singer Capital Markets hailed the solid progress Parity made in the first half."It is still early days, but we believe that the trough in earnings has now passed," the broker said.As a result, it has changed its full year earnings forecast, and now expects EBITDA of £0.1m, having previously forecast the company would break even. This reduces the full year loss per share by 15% to 1.8p," the broker said. The share price was up 6.45% to 24.75p at 13:54. NR