FDM Group warns on full year, shares tumble

FDM Group tumbled on Wednesday as it warned that its 2024 financial performance was likely to be "materially below" its earlier expectations amid soft market conditions.

The IT services provider said that market conditions in the early months of the current year have remained soft, "reflecting continuing worldwide macroeconomic and geopolitical uncertainties".

Group-wide, activity levels in the year to date have been below its previous expectations, with 3,703 consultants assigned to clients as at 18 March 2024, it said.

"This, coupled with our strategy to maintain appropriate levels of Consultant resource, and capacity in our internal teams, to meet clients' needs promptly when our markets improve, means that the board believes that the group's financial performance for 2024 is likely to be materially below its earlier expectations."

For the year to the end of December 2023, pre-tax profit rose 22% to £55.6m, while revenue was up just 1% at £334m.

FMD said this was a "resilient" performance "against a backdrop of very challenging market conditions".

FDM said macroeconomic and geopolitical uncertainties impacted client confidence, causing them to defer decisions relating to project commencements and Consultant placements. It ended the year with 3,892 Consultants placed with clients, down 21% on the previous year, while training completions slid 58% to 1,338.

Chief executive Rod Flavell said: "As we highlighted in January, levels of client engagement remain encouraging. It is however difficult to predict when this will gain sufficient strength to deliver meaningful increases in our Consultants placed with clients."

At 1350 GMT, the shares were down 15.5% at 330p.