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Staffline warns on profits amid ongoing accounting review
31st Jan 2020 09:50
(Sharecast News) - Recruitment and training group Staffline issued a profit warning on Friday, saying that costs related to an ongoing accounting review had dented its bottom line.
Staffline, which guided for a full-year adjusted operating profit of £10-12m back in December, said on Friday that it now expects the group to post adjusted underlying earnings that will be "materially below" its previous guidance.
The AIM-listed company said it had continued projects to improve its internal controls, including a rigorous internal review process, with a detailed review of its balance sheet.
"Although the year-end audit process, with our new auditors, Grant Thornton, is ongoing, we have already identified that it is appropriate to increase certain provisions and make further write-downs.
"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 31st December 2019 materially below our previous guidance."
Staffline added that it maintains "a constructive relationship" with its lending banks and does not anticipate any covenant issues.
The firm said it was also actively considering certain strategic options to "significantly" reduce net debt during the first half of 2020.
As of 0950 GMT, Staffline shares had sunk 10.12% to 66.51p.
Staffline, which guided for a full-year adjusted operating profit of £10-12m back in December, said on Friday that it now expects the group to post adjusted underlying earnings that will be "materially below" its previous guidance.
The AIM-listed company said it had continued projects to improve its internal controls, including a rigorous internal review process, with a detailed review of its balance sheet.
"Although the year-end audit process, with our new auditors, Grant Thornton, is ongoing, we have already identified that it is appropriate to increase certain provisions and make further write-downs.
"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 31st December 2019 materially below our previous guidance."
Staffline added that it maintains "a constructive relationship" with its lending banks and does not anticipate any covenant issues.
The firm said it was also actively considering certain strategic options to "significantly" reduce net debt during the first half of 2020.
As of 0950 GMT, Staffline shares had sunk 10.12% to 66.51p.