Nakama says Hong Kong, Singapore revenues hit by coronavirus
By Iain Gilbert
Date: Tuesday 11 Feb 2020
(Sharecast News) - Nakama shares slumped on Tuesday after the recruitment consultancy said the coronavirus had hit revenues in Hong Kong and Singapore and warned that it still "urgently" requires an injection of capital.
Nakama said trading to date for the year to the end of March 2020 has been broadly in line with management's expectations. However, it encountered "a number of challenges" in the final quarter of the year and the impact of the coronavirus on revenues in both Hong Kong and Singapore was "immediately felt".
"As a result of the curbs on movement of people imposed by regional governments, firms were currently choosing to delay, in some cases indefinitely, the start dates of new hires until the full impact of the virus has been determined, directly impacting revenue recognition for the group," said Nakama.
The AIM-listed firm said recruitment activity in general had also been immediately impacted by the effects of the virus but that the Asia region as a whole remained "highly attractive".
In the UK, the recruitment environment remained "challenging", it said, with the changes to IR35 due to take effect from Aprill set to have a short-term impact on the Highams business.
"The group's cash position remains severely constrained and the company faces a short-term cash challenge until the full impact of the recent cost reductions has come through," it said. "The board are considering several alternative sources of funding to improve the group's cash position, but the group still urgently requires an injection of capital."
At 1110 GMT, the shares were down 41% at 0.50p.
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