Staffline and Prime People both issued trading updates during the last period. Prime People said that trading had been hit hard by the downturn in the commercial property market and warned that results for the full year would be “significantly below market expectations”. In November, Arbuthnot, the company’s broker, said it expected profits before tax of £1.26m compared with £2.4m for 2007/2008.

The company commented that due to ‘very limited’ visibility (ability to predict its future revenue stream) it was unable to provide the market with specific guidance on its performance for the second half of the year.

As finance director Chris Heayberd explained to Recruiter: “We are unable to project our revenue forward with any degree of certainty or reliability simply because our clients are themselves in difficult circumstances.”

Heayberd said that whereas in normal times it was possible to make a reasonably accurate projection of future business based on historical patterns, visibility was now down to about a week. This put the company “a little behind the curve” when trying to align its cost base to its revenue, said Heayberd. In such circumstances it was important to accept that “we are where we are”, said Heayberd, even if it meant taking “very difficult decisions” on staff numbers.

The market took the trading update news badly, with the company’s share price slumping to 13.5p, a new 52-week low.

Staffline’s chief executive, Andy Hogarth, told Recruiter that despite tough trading conditions, particularly in automotive, manufacturing and distribution, he expected profits to be in line with market expectations of £3.5m before amortisation. Staffline’s share price rose to 34p, though it remained close to its 52-week low of 30.5p.