FDM slashes dividend as first-half profits halve

31st Jul 2024 08:48

(Sharecast News) - IT consulting group FDM slashed its interim dividend after profits halved in the first half on the back of ongoing touch market conditions, but said that full-year results should still be in line with current forecasts.

The company reported a pre-tax profit of £15.5m for the six months to 30 June, down 48% on last year, as revenues sunk 22% to £140.2m. Its dividend for the period was cut by 41% to 10p per share.

Chief executive Rod Flavell said the "softer trading conditions" reported at FDM's last update in May had continued, as clients continued to defer purchasing decisions.

FDM's consultants assigned to clients by the end of the period were 25% lower than last year at just 3,469, with weaker numbers across every geography.

The company said it was taking actions to align available resources with market demand, scaling back recruitment and "undeploy[ing] consultants with current market dynamics". As such, internal headcount reduced to 594 from 802 the same time last year.

As a result of these actions, the company incurred a £2.1m exceptional cost, which weighed on the bottom line. Adjusting for this, pre-tax profit would have been down just 32% on last year.

"While we continue to manage the level of unallocated consultants and our internal cost base in the light of market conditions, we remain committed to maintaining appropriate levels of resource and capacity to meet clients' needs as and when markets improve," Flavell said.

"We have a robust balance sheet and experienced board and management, and are focused on delivering against our objectives, both short and medium term. The board anticipates that the group's financial performance for the full year will be in line with its current expectations."

Shares were up 1.5% at 419p by 1033 BST, but remain down 23% on last year.