Driver Group H1 pre-tax profits seen lower, CFO resigns

Shares in Driver Group tumbled on Tuesday after the professional services consultancy warned first-half profits would be lower year-on-year amid operational woes in Asia Pacific and the Middle East and announced the departure of its chief financial officer.

Driver Group stated it had experienced "a difficult second quarter", with results during the period impacted by a combination of problematic loss-making contracts in the APAC region and an unexpected drop in revenues in the Middle East.

As a result of the drag effect from its APAC and Middle Eastern operations on a solid EuAm region performance, Driver stated underlying group pre-tax profits were now expected to be between £300,000 and £500,000, down from £1.0m at the same time a year earlier.

The AIM-listed firm also said given the "historic underperformance" of the two regions, it has launched an operational review of both regions, with independent external support, and has already identified a near term opportunity to reduce annual operating costs by more than £1.0m through a reconfiguration of its operating footprint in both regions.

"In addition, this reconfiguration and associated reduction in headcount is expected to result in higher utilisation allowing management to be more selective of its future client base. Implementation of the key findings of the review will commence immediately and is expected to support a significant improvement in profitability in the second half," said Driver.

Elsewhere, Driver revealed chief financial officer David Kilgour had tendered his resignation to pursue other ventures.

As of 1005 BST, Driver shares had slumped 23.33% to 29.90p.