RNS Number : 8262R
Partway Group PLC
10 June 2024
 

Partway Group plc

("Partway" or the "Group")

Final results for the year ended 31 December 2023

10 June 2024

 

Partway announces its full year results for the year ended 31 December 2023.

A copy of its audited financial statements and annual report for the year ended 31 December 2023 ("Annual Report") will shortly be available for download on the Company's website, www.partway.net.

Key extracts from the Annual Report are set out below.

 

Contacts




Partway Group plc




Mark Braund, Executive Chairman

m.braund@partway.net

Mike Johns, Chief Financial Officer

m.johns@partway.net



Allenby Capital Limited (Nominated Adviser and Broker)

Tel: +44 (0) 20 3328 5656



David Hart / Dan Dearden-Williams (Corporate Finance)


Tony Quirke (Sales and Corporate Broking)


 

 

Chairman's statement

For more than a decade, Partway Group plc, formerly known as Parity Group plc (the "Company" or the "Group") has, under several different management teams, attempted without success to diversify away from its core competency in IT contract recruitment.

In the three years leading up to my appointment as Chair, in April 2021, the core recruitment division had been starved of investment in order to fund a failed attempt to build a new consulting capability.

During the second half of 2021, we restructured the business, shutting down the consulting division to refocus on IT recruitment, a business that was generating greater than 95% of the revenue at the time.  After years of underinvestment, and the loss of key personnel, we successfully rebuilt the core recruitment business into a position of strength in the public sector market, re-establishing Parity's heritage as a well-recognised recruitment brand, and did so against a backdrop of tough economic conditions.

Despite a much slimmer management structure and materially lower overheads, the costs associated with maintaining an AIM listing along with the continuing obligation to fund a legacy defined benefit pension scheme, did not leave capacity to fund further investment.

With significant challenges to source new investment for growth, continuing economic uncertainty, and no expectation of a short-term return to a growth in the recruitment market, we took the decision in November 2023 that the best opportunity to deliver value for all our stakeholders, (shareholders, employees, customers and suppliers) was to find a new home for the recruitment business, giving it the opportunity to flourish within a larger group. This was completed on 8 December 2023, realising £1.6m of cash after costs of the disposal, and the settlement reached with the trustees of the pension scheme that removed future obligations to fund the defined benefit pension scheme.

As outlined in the circular to shareholders dated 21 November 2023, the sale of the trading activities of the Company reclassified the Company as a cash shell under rule 15 of the AIM Rules for Companies (AIM Rule 15). The Board's strategy has been to use the proceeds from the sale to secure a new trading activity via a reverse takeover (RTO), and if this was not possible to return funds back to shareholders, many of whom are long term holders.

In parallel with our proactive search for RTO targets, we have since 8 December 2023, decoupled the operational and IT resources from the recruitment business and been unwinding 40 + years of corporate activity to facilitate a clean cash shell.

Over the last six months, we have actively explored more than a dozen RTO opportunities, considering the following key factors:

·    suitability and readiness for a public listing;

·    growth potential and outlook for future cash generation;

·    likely resulting liquidity in the Company's shares following acquisition(s);

·    short, medium and longer-term exit strategies for Shareholders;

·    possible synergies with knowledge and contacts of the Directors; and

·    ease with which capital can be raised to meet the working capital requirements both initially and in the future.

To date we have not sourced a suitable target that has:

·    the opportunity to generate future value for Shareholders;

·    could be delivered within the timeframes set out in AIM Rule 15 before the Company would be delisted; and

·    would justify incurring the significant costs to undertake an RTO.

The Board has considered the merits of continuing to pursue the RTO strategy based on conversations with prospective RTO candidates, and has concluded that the likelihood of successfully securing an RTO on or before 9 December 2024 (being the first business day following the anniversary of the sale of the recruitment business and the deadline for completing an RTO before the Company's shares are cancelled from trading in accordance with Rule 41 of the AIM Rules for Companies) is low and, as such,  is not in the best interests of shareholders given the ongoing costs that would be incurred.

 

The Board has therefore consulted with specialist advisors on the most appropriate way to return funds to Shareholders and will in due course set out in a circular to Shareholders its plan to cancel the admission of the Company's Ordinary Shares to trading on AIM and place the Company in a solvent members' voluntary liquidation (the "Liquidation") pursuant to the UK Companies Act 2006, enabling surplus funds, after paying creditors to be distributed.

 

As a result, we expect that this to be our final annual report on the Company.  We have included for your review our statutory accounts which, as a result of the proposed solvent members voluntary liquidation, have been prepared on a basis other than going concern.  We thank you for your support.

 

Consolidated Income Statement for the year ended 31 December 2023

 


 

 

Notes

2023

Continuing activities

£'000

2022

Continuing activities

         £'000

Revenue

3

-

-

Contractor costs


-

-

Net Fee Income


-

-

Other operating income

4

111

950

Operating costs

5

(2,785)

(2,810)

Operating (loss)/profit

 

(2,674)

(1,860)

Analysed as:


 


Operating loss before non-underlying items


(685)

(858)

Non-underlying costs

6

(2,100)

(1,952)

Non underlying income

4

111

950

Operating loss


(2,674)

(1,860)

Finance costs

10

(249)

(302)

(Loss)/profit before tax


(2,923)

(2,162)

Analysed as:


 


Adjusted loss before tax1


(934)

(1,160)

Non-underlying costs

6

(2,100)

(1,952)

Non underlying income

4,6

111

950

Loss before tax


(2,923)

(2,162)

Tax (charge)/ credit

12

(236)

(301)

Loss for the year


(3,159)

(2,463)

Loss on disposal of trading activities

7

(262)

-

Profit for the year from discontinued operations

8

198

748

Loss for the year attributable to owners of the parent


(3,223)

(1,715)

 


 


Loss per share - Continuing activities


 


Basic

13

(3.07p)

(2.39p)



 


 


 


Loss per share - Continuing and discontinued activities

Basic

 

13

 

(3.13p)


 

(1.66p)

 

 

 

1 Adjusted profit/(loss) before tax is a non-IFRS alternative performance measure, defined as profit/(loss) before tax and non-underlying items.

 

 

Statements of Changes in Equity for the year ended 31 December 2023

 

 

 

 

 

 

 

 

Consolidated

Share

capital

£'000

 

 

Share

premium

reserve

£'000

 

 

Share- based payment reserve

£'000

Capital

redemption

reserve

£'000

Other

reserves

£'000

Retained

earnings

£'000

Total

£'000

 

At 1 January 2022

2,062

33,270

31

14,319

34,560

(77,215)

7,027

 

Share options and warrants - charge

-

-

50

-

-

-

50

 

Transactions with owners

-

-

50

-

-

-

50

 

Loss for the year

-

-

-

-

-

(1,715)

(1,715)

 

Remeasurement of defined benefit pension scheme

-

-

-

-

-

(841)

(841)

 

-

-

-

-

-

290

290

 

At 31 December 2022

2,062

33,270

81

14,319

34,560

(79,481)

4,811

 

Share options and warrants - charge

-

-

45

-

-

-

45

 

Share options - lapsed

-

-

(28)

-

-

28

-

 

Transactions with owners

-

-

17

-

-

28

45

 

Loss for the year

-

-

-

-

-

(3,223)

(3,223)

 

Remeasurement of defined benefit pension scheme

-

-

-

-

-

13

13

 

-

-

-

-

-

(5)

(5)

 

At 31 December 2023

2,062

33,270

98

14,319

34,560

(82,668)

1,641

 

 

 

 

 

 

 

 

 

 

 



 

Statements of Financial Position as at 31 December 2023

 

Company number 3539413


Consolidated

 

 

Notes

2023


£'000

2022


£'000

 

Assets

Non-current assets

 

 


 

Goodwill

14

-

2,642

 

Other intangible assets

15

-

188

 

Property, plant and equipment

16

-

10

 

Right-of-use assets

17

-

174

 

Trade and other receivables

19

-

-

 

Deferred tax assets

18

-

521

 

Retirement benefit asset

25

-

1,269

 

Total non-current assets

 

-

4,804

 

Current assets

 

 


 

Trade and other receivables

19

426

5,909

 

Cash and cash equivalents


1,495

2,053

 

Total current assets           

 

1,921

7,962

 

Total assets


1,921

12,766

 

Liabilities

Current liabilities

 

 


 

Loans and borrowings

20

-

(4,356)

 

Lease liabilities

17

-

(203)

 

Trade and other payables

21

(280)

(3,340)

 

Total current liabilities


(280)

(7,899)

 

Non-current liabilities

 

 


 

Lease liabilities

17

-

(14)

 

Provisions

22

-

(42)

 

Total non-current liabilities


-

(56)

 

Total liabilities

 

(280)

(7,955)

 

Net assets

 

1,641

4,811

 

 

 

 


 

Shareholders' equity

 

 


 

Called up share capital

26

2,062

2,062

 

Share premium reserve

24

33,270

33,270

 

Share based payment reserve

11

98

81

 

Capital redemption reserve

24

14,319

14,319

 

Other reserves

24

34,560

34,560

 

Retained earnings

24

(82,668)

(79,481)

 

Total shareholders' equity

 

1,641

4,811

 

 

 

 


 

 

 

 


 

 

 

 


 

 



 

Statements of Cash Flows for the year ended 31 December 2023

 

 

 

Consolidated

 

Notes

2023
£'000

2022
£'000

Cash flows from/ (used in) operating activities

(Loss)/profit for the year


 

(3,223)

 

(1,715)

Adjustments for:


 


Net finance expense/(income)

10

282

310

Share-based payment expense/(credit)

11

45

50

Income tax charge/ (credit)

12

235

376

Amortisation of intangible assets

15

59

3

Depreciation of property, plant and equipment

16

4

10

Depreciation and impairment of right-of-use assets

17

149

346

Write down of pension asset

25

2,100

-

Loss on disposal of subsidiary

7

262

-

Provision for impairment of investment in subsidiaries

20

-

-

Impairment of goodwill

14

-

1,952



(87)

1,332

Working capital movements


 


(Increase)/decrease in trade and other receivables

19

1,837

(1,112)

(Decrease)/increase in trade and other payables

21

(1,100)

(343)

(Decrease) in provisions

22

(42)

-

Payments to retirement benefit plan

25

(928)

(331)

Net cash flows used in operating activities


(320)

(454)

 


 


Investing activities


 


Purchase of property, plant and equipment

16

-

(5)

Development of intangible assets

15

-

(109)

Net proceeds from disposal

7

1,792

-

Cash disposed of


(127)

-

Net cash flows used in investing activities


1,665

(114)



 


Financing activities


 


Drawdown/(repayment) of finance facility

20

(1,542)

2,077

Principal repayment of lease liabilities

17

(191)

(433)

Movements on intercompany funding


-

-

Interest paid

10

(170)

(144)

Net cash flows from/ (used in) financing activities


(1,903)

1,500



 


Net increase/(decrease) in cash and cash equivalents


(558)

932

Cash and cash equivalents at the beginning of the year


2,053

1,121

Cash and cash equivalents at the end of the year


1,495

2,053

 

 

All references to Notes in the financial statements above refer to the Annual Report which will be available to download from www.partway.net

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