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Company: Adecco

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Adecco delays results again

Date Class
18th May 2004 Questionable Business Practice
The world’s largest employment agency, Adecco, has again delayed the release of its 2003 results, saying an independent audit has yet to be completed.

Adecco gave no new date for the release of the figures, which had been due out on Tuesday.

The company repeated in a statement that bookkeeping problems discovered earlier this year had had little impact on its finances.

“The board reiterates that, based on information currently available to it, to date no evidence demonstrating major misappropriations or irregularities that would be financially significant to the company as a whole in 2003 has been found,” the statement said.

The disclosure shaved off a third of the company’s value at the stock exchange and prompted fears of a scandal similar to that at the Italian Parmalat concern.

But in March Adecco reported that a check of its books had revealed no major irregularities.

In a preliminary trading update on the first quarter, Adecco said on Monday that sales rose by five per cent in local currencies to €3.8 billion.

It added that operating income before amortisation and costs related to the audit delay was expected to come in below last year’s level.

"At an operational level, I think that Adecco is presenting some encouraging figures," said Nicole Burth Tschudi, an analyst at Lombard Odier Darier Hentsch.

More bad news
Analysts believe the financial impact of the accounting woes – which have cost the chief financial officer and the head of Adecco’s North American operations their jobs – will be under €100 million (SFr155 million).

In a trading note on Monday, analysts at Aargau Cantonal Bank said the company announcement was “not all too pleasing; for the umpteenth time they cannot manage to give a date when these figures should come.”

Adecco has done little to dispel market worries, citing legal constraints for its tight-lipped communications.

The company is still facing class-action suits in the United States and stock exchange investigations over what analysts have described as a huge public relations fiasco.

In addition to this, the company's tender for IC9700 status hangs in the balance.




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