Staffline problems worse than feared
After casually brushing past £20m of exceptional costs in a trading statement in January (enough to push the recruiter into a loss making position), Staffline finally hit a wall. Shares were suspended soon after the trading statement and have struggled since re-opening following miserable trading statements and the continual delay of group results. Now management has announced that the problems are even worse than feared.
Stafflline's (STAF) needs to raise £30m of cash, equivalent to 64% of its current market capitalisation to deal with the cash costs of its historic liabilities which are now higher than management previously anticipated. The shares resumed trading in March after management admitted that the costs would dent the company's financial position in January, resulting in a suspension of the shares. The series of calamities follows a trading update for the financial year to December 2018 which proudly ran through the progress made by the recruiter’s two main divisions – PeoplePlus and Recruitment – which have ensured trading in the period is “in line with market…