Business
Group Update and Restoration of Trading
Group Update and Restoration of Trading.
About this update from Staffline Group Plc
[{"type":"text","content":"\n \nRNS Number : 5214S Staffline Group PLC 12 March 2019 \n\n12 March 2019\n \nSTAFFLINE GROUP PLC\n \n(\"Staffline\" or \"the Group\")\n \nGroup Update and Restoration of Trading\n \nOn the evening of 29 January 2019, allegations were raised by a third party to the Group's auditors in respect of invoicing and payroll practices within the Group's Recruitment division. A review was instigated which included the appointment of independent legal advisers to conduct an investigation, as well as instructing the Group's auditors to extend their scope of work. \n \nThe independent legal investigation has delivered its key findings which has assisted the Board in assessing and defining the impact on the Group's profitability and existing forecasts. \n \nThe Board remains confident that its policies in relation to these matters are appropriate. However, one allegation concerned the Group's historical compliance with National Minimum Wage Regulations 2015. The Group has been engaging with HMRC in order to quantify underpayments made in the past to workers, over a number of years prior to 2018. Potential underpayments identified by the Group relate to a limited number of food production facilities and the payment for preparation time, which is generally the time spent donning workwear. A provision of £4.4m had been made for estimated additional costs in the Group's accounts for the year ended 31 December 2018. This provision was included as part of the £20m of exceptional costs announced in the Company's trading update on 8 January 2019. However, as a result of legal advice, the Board has revised its estimate and deems it prudent to increase that charge by £3.5m taking total exceptionals in the period to £23.5m. The additional provision referred to above is exceptional and is the only change against market expectations identified by the Board.\n \nOnce the audit process is complete, Staffline will release its preliminary results for the year ended 31 December 2018. At that point, the Board expects to report, subject to audit completion, an underlying trading performance for the year ended 31 December 2018 in line with expectations and maintains its expectations for the current financial year. As previously announced, the Group expects to report net debt of c.£63m (unaudited) as at 31 December 2018....