Recruitment giant to take £32.6m hit after Minimum Wage irregularities

Staffline Group's Nottingham headquarters

Staffline, the Nottingham-based recruitment giant, says it will take a £32.6m hit to its bottom line over errors in historic compliance with National Minimum Wage regulations.

The firm said that a further review of the compliance issues had almost doubled the cost of amending the mis-payments from £7.9m to £15.1m.

The firm also says it has spent £500,000 on advisers.

Such is the magnitude of the news that Staffline says it may require a waiver of possible future breaches to the leverage covenant in its lending agreements.

A statement from the firm said: “Constructive discussions with the Group’s lenders are ongoing and, in conjunction, the Company has commenced discussions with investors regarding a placing of ordinary shares to raise approximately £30m.”

Staffline now says it will publish its results for year ended 31 December 2018 on 27 June.

Chris Pullen, chief executive of Staffline, said: “Whilst the time taken to announce our 2018 financial results is frustrating, we look forward to posting these results at the end of June at which point we expect the business to return to normalised trading. Staffline continues to enjoy a unique position in its markets and once this episode is behind us we are confident of a return to future growth.”

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