Recruitment firm mulls turnaround plan as lenders get tough

Staffline, the Nottingham-based recruitment firm, says it is looking to concentrate on a turnaround plan that will cut costs after securing a £103m revised financing deal with its lenders.

The new deal sees the firm’s revolving credit facility slashed from almost £80m just £20m, its overdraft wiped out a £73.2m invoice discounting agreement put in place.

Strict new rules have been put in place by Staffline’s lenders, including restrictions on new material share, business and asset acquisitions until July 2022 and a ban on dividend payment until the same date.

Staffline says it now has in place enough cash to cover costs until 31 December 2021, apart from the payments on VAT, which are due on or before 31 March of next year. The company’s board say they are working on a turnaround plan to cover this.

Ian Lawson, executive chairman of Staffline, said: “We are pleased to have secured the refinancing of Staffline and wish to thank our lenders for their ongoing support. The Group has a solid liquidity position through to March 2021 and this refinancing provides us with the platform to focus on our turnaround plan which includes margin improvement measures, cost reduction initiatives and working capital improvements.”