You might think that the sort of transformation that top team Philip Swinstead and Paul Davies are undertaking at Parity is arguably best achieved under the cover of darkness – well, at least outside of the gaze of public markets. But the gamble appears to paying off, with the share price now treble that when the ‘dynamic duo’ wrested back control of the business in May 2010 (see Parity - what goes around comes around) – though this includes a rather surprising (to me, anyway) near-50% surge in the share price since January this year.
Over the past three years, management has sought to stabilise the core IT staffing business, slash and burn the loss-making and ill-managed projects consultancy, and – imaginatively – launched a fledgling digital media business (see Parity buys into its digital dream). The process continues with today’s announcement that Parity will once again be organised into two divisions: Parity Professionals (recruitment) and Parity Digital Solutions (does what is says in the tin – sort of). They have also recruited Stephen Whyte to lead the latter business. Whyte was European head of Arkansas-headquartered analytics software firm Acxiom until they parted company in 2011. He was previously CEO at advertising agencies McCann Erickson and Leo Burnett.
This is all backdrop to Parity’s FY results, which saw net losses shrink from £2.3m in 2011 to £1.4m in 2012 on the back of a 7% increase in headline revenues, to £85.9m. IT staffing generates almost 90% of group revenues and nearly two-thirds of adjusted profit, though has the lowest margins (5.3%) of Parity’s main business lines. Indeed, while the reorganisation (and perhaps pointer to an eventual split) separates Parity’s recruitment-oriented activities from its technology-oriented activities, in practice, each of the new divisions are themselves businesses of two halves.
This is making more sense to me now than it did three years ago – but let’s see what it all looks like when Parity’s journey eventually reaches its destination.