Political uncertainty putting serious pressure on InterQuest

Specialist technology recruiter InterQuest Group updated the market on its trading on Tuesday, ahead of its interim results for the six months to 30 June.

The AIM-traded company had previously announced that it was facing challenges in the political and trading environment resulting from Brexit, the result of the UK election and the subsequent hung parliament.

“The company today confirms that like-for-like net fee income for the six months to 30 June was down 14% to £9.5m,” its board said in its statement.

Total NFI for the six months to 30 June, including that of Rees Draper Wright which was acquired on 3 August 2016, was £11.2m.

InterQuest said total EBITA before exceptional costs decreased by 19% to £1.3m during the period.

“Market conditions in one of the company's core markets, financial services, remain challenging, specifically in the contracting market which is experiencing pressure on margins.

“The company is therefore more reliant on fees from permanent placements which are more volatile, particularly in the higher value search business.”

InterQuest said it had benefitted from better performances in its public sector, solutions and North American search market but those have “only partly mitigated” the larger underperforming divisions which were said to be taking longer than expected to turn around.

“Accordingly, the company expects that net fee income will be materially affected and EBITA for the year to 31 December, before taking into account approximately £0.5m of costs incurred in the failed defence of the bid by Chisbridge, will be approximately £3.1m.”

The InterQuest board said further detail would be provided within the company's interim results for the six months to 30 June, which were expected to be published in September.