Nottingham-based recruitment company Staffline has confirmed that it will lose up to £32million, after it was revealed that the firm discovered historic irregularities in its compliance with National Minimum Wage regulations.
A further review of the compliance issues had almost doubled the cost of amending the mis-payments from around £8million to £15million. Staffline also spent £500,000 on advisers in the process.
Following the revelation of the news on Monday, the firm told its investors that it is anticipating the amount to grow due to further possible historic breaches. However, Staffline is continuing to operate despite ongoing HMRC investigations.
The company’s annual financial results are due to be published on 27 June, after which Chief Executive Chris Pullen has claimed that he expects “a return to normalised trading,” however, investors have noted that the final dividend for 2018 has been scrapped.
“Whilst the time taken to announce our 2018 financial results is frustrating, we look forward to posting these results at the end of June at which point we expect the business to return to normalised trading,” said Pullen.
“Staffline continues to enjoy a unique position in its markets and once this episode is behind us we are confident of a return to future growth.”
The news is in stark contrast to reports that were released in January which stated that the company was expected to reach £1billion in turnover for 2019 – around 18% higher than the previous year.
In September 2018, Insider Media reported that Staffline had been supported by a £150million funding package from Lloyds Bank Commercial Banking.
Mark Lewis, Relationship Director at Lloyds Bank Commercial Banking, said that supporting the ambitions of mid-market businesses like Staffline is part of “our commitment to helping Britain prosper".
"The recruitment industry has grown consistently in the last few years and is fast becoming one of the UK’s leading and most dynamic sectors,” he said.
"It’s fantastic to be supporting this longstanding client as it continues to invest in its growth and establish its market-leading reputation.”