Whitehead Mann sells outplacement arm; Penna shares tumble

Whitehead Mann said conditions in all its markets were tough and showed no sign of improvement. It had cut group headcount by at least 10% in the last six months. Its share price tumbled 42% early on Friday before closing at 146.5p, a 28% drop on the day.

The firm is selling BG Careers and the training company BG Training to a management buy-out team for 2.7m (€4.3m). Both firms were part of the Baines Gwinner headhunting group, which Whitehead Mann bought in November for 11m.

Outplacement is often seen as a good fit with recruitment, as they prosper at different stages of the economic cycle. But Whitehead Mann said BG Careers was not part of its core strategy.

Peter Wisher, chief executive of BG Consulting, the new firm created by the buy-out team, said the outplacement business was booming. He said the training side was solid, but added: 'Banks these days are firing people rather than training them.'

The turnover of BG Careers and BG Training totalled 1.5m in the past six months, Whitehead Mann said.

Wisher said he was pleased with the price the buy-out team was paying. 'It's often hard for a firm to extract a premium when selling an operation whose key assets are its people, since people are mobile,' he said.

The buy-out is backed by venture capital from GLE Development Capital and a loan from Bank of Scotland.

BG Consulting's chairman will be Mark Wignall, GLE's managing director. The other board members are Antony Dunlop and Claire Anderson, both from BG Careers and BG Training.

Also on the buy-out team are Andrea Ward, Richard Class, Fiona Gaffney, Philip Beddows and Anna Stephenson.

BG Careers and BG Training are to retain their names, managers and premises.

Another firm that combines recruitment with outplacement, Penna Consulting, also saw its shares tumble on Friday, after it said first half profits would be significantly down on last year.

Like Whitehead Mann, Penna said it had cut headcount by 10%. Most of the firm's revenues come from outplacement.

Penna's shares slumped 46% to close at 90p.