Recruitment group Marlborough International will report losses for the second successive year after warning yesterday of a significant downturn in the markets where it operated, particularly in the Irish information technology and technical sectors and the London financial services sector.

It is understood that chairman and chief executive Mr David McKenna will decide within the next two weeks whether to bid to take Marlborough private. Mr McKenna owns 44.5 per cent of the firm and six months ago said he was considering a management buyout of the group, whose shares have collapsed over the past year after a series of profit warnings and write-offs.

Yesterday, Marlborough said the management team was in discussions with potential finance providers for a MBO. Marlborough is valued at €14.5 million (£11.42 million) but, as Mr McKenna already owns 45 per cent, the cost of any MBO is likely to be substantially less than that figure.

After slumping to losses of €1.48 million in the year to the end of February, the first three months of the financial year to June were in line with the firm's expectations.

But the slump in IT, technical and financial recruitment means Marlborough will report losses for the half-year to the end of August. This will be a major turnaround from the €3.2 million profits in the same period last year and analysts believe that, given continuing recruitment cutbacks and the likelihood that this will continue, Marlborough will suffer sizeable losses for the full year.