January 31, 2020 / 7:29 AM / 6 months ago

UK's Staffline says accounting review costs to dent profit

(Reuters) - Recruitment company Staffline Group Plc (STAF.L) said on Friday it expects annual adjusted profit to be materially below its previous forecast, hurt by costs associated with an ongoing accounting review.

The recruiter, which had issued multiple profit warnings in 2019, also said it was actively considering strategic options to reduce its debt during the first-half of 2020.

The company was hit hard last year as the British job market remained subdued, with employers choosing to hold off hiring due to Brexit-related uncertainties, which sent its shares to their lowest in a decade in December.

“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,” the company said in a statement.

Staffline had said in December last year that it expects adjusted profit before interest, tax and non-underlying charges of about 10 million pounds ($13.14 million) to 12 million pounds for the year.

However, the company said it does not anticipate any issues with its debt covenants, adding that it maintains a “constructive relationship” with its lender-banks.

Reporting by Indranil Sarkar in Bengaluru; Editing by Bernard Orr and Sherry Jacob-Phillips

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