Corporate Services dives after warning

Shares in Corporate Services, the recruitment company that owns the Blue Arrow employment business, dived 14 per cent yesterday after it warned trading conditions would not improve for the rest of the year.

The group said sales in the UK for the five months to end of May were 13 per cent below those for the last five months of 2001, while US sales were 23 per cent lower based on local currency.

"We are still bouncing along the bottom. We were hoping for a strong upward trend [in the second half] and frankly there is no sign of that," Tony Collyer, the finance director, said.

The revised trading expectations mean the group will not break even this year, as its broker Dresdner Kleinwort Wasserstein had forecast.

Mr Collyer said demand from its client base had fallen away, especially in its core business, which is mainly blue-collar warehouse work.

Corporate Services, which in April saw three of its former directors charged with fraudulent accounting by the Serious Fraud Office, said the fall in sales had contributed to operating losses of £1.2m from UK operations and £2.5m from US operations for the first five months of 2002. The shares closed 5p lower at 30p.