A reduction in government expenditure has taken its toll on Parity Group, according to the IT services firm’s unaudited preliminary results for the year ended 31 December 2010.

The group’s results reveal:

• Revenues of £93.0m (2009: £119.0m)
• Group operating loss from continuing operations of £2.6m (2009: £0.8m profit)
• Resources division: £2.0m operating profit before exceptional items (2009: £3.0m)
• Solutions division: £2.0m operating loss before exceptional items (2009: £0.6m loss)
• Group loss from continuing operations before tax and exceptional items of £3.1m (2009: £0.3m profit)

Chairman Philip Swinstead says: “Revenues for the year were 22% lower at £93.0m, and the group recorded an operating loss before exceptional items of £2.6m compared to a profit of £0.8m the previous year. Exceptional costs from continuing activities relating to Board changes, restructuring and excess property amounted to £2.1m compared to £0.3m in 2009, with a further cost of £0.9m (£0.5m in 2009) relating to the discontinued business Parity Training, which was sold in 2009. This produced a loss attributable to shareholders for the year of £6.1m (£0.3m in 2009).

“The revenue decline was caused primarily by the reduction in government expenditure to which the business failed to react sufficiently quickly. There were also poor project controls, and the sale of Parity Training in 2009 with unsatisfactory contract conditions proved costly. These factors, when combined, led to a poor performance in 2010.

“The Resources business stood up well to a freeze on spending on temporary IT staff by government in the autumn and increased its commercial work. Solutions, despite suffering from a difficult market, improved its operating performance to break even by the year end.”