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Adecco delays results again

Adecco shares dipped on the news swissinfo.ch

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.

This content was published on April 19, 2004 - 11:55

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.

Out of the blue

Analyst Rold Kunz at Zurich Cantonal Bank told swissinfo that the news had come out of the blue.

“I was very surprised receiving today’s statement of a new postponement of the publication of the Adecco results for the past year. We can see that it is quite serious from the reaction of the share price that went down quite clearly,” he said.

“For sure, it is still the world’s leading temporary employment company but it’s obvious that you could communicate much better than Adecco has done this year,” he added.

Adecco commented that its 2003 results and figures for the first quarter of 2004 would be published “as soon as practicable”.

It added that an independent review by outside lawyers and accountants was now focusing on “email correspondence by senior professionals in the company” but gave no further details.

Shocked investors

The group, which has its headquarters near Zurich, shocked investors on January 12 when it revealed accounting irregularities at its North American unit.

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.

The Aargau analysts said last month that the problem at Adecco was “a storm in a teacup and a masterpiece of communication errors”.

swissinfo with agencies

Key facts

Adecco employs 28,000 people at 5,800 offices in 68 territories around the world.
It is a Forbes 500 company and the global leader in human resources solutions.

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In brief

Adecco has delayed for the second time publication of its 2003 financial results. The results were originally due out on February 4.

The company said on Monday that they would be published “as soon as practicable”.

The board of directors has repeated that bookkeeping problems discovered earlier this year had little impact on its finances.

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