After issuing a further profit warning in November (see here), AIM-listed IT recruitment firm InterQuest even then missed its downgraded forecast. Net fee income (NFI – gross profit) fell by 2% to £16.4m as opposed to the ‘low single digit growth’ projected at the warning. InterQuest also appeared to miss its £2.2m adjusted operating profit target, achieving £1.8m, less than half the prior year. Headline revenues for the year to 31st Dec. 2012 fell by 7% to £112.7m. InterQuest remains in net loss to the tune of £123k, though much improved on the £1.1m lost in 2011.
2012 was another ‘annus horribilis’ for InterQuest. Still reeling from the impact of the previous year’s disastrous acquisition and subsequent write-off of CCL (start here and work back), management invested in Mint Recruitment Solutions and in an unspecified ‘London-based international business’, both of which subsequently ‘fell short of expectations’. And along the way, InterQuest lost its ‘star’ COO, Gary Goldsmith (see here).
It’s true that the recruitment market is fragile (e.g. see Another challenging year ahead for PageGroup and others), but many of InterQuest’s troubles have been self-inflicted. Management has much to prove in 2013.