Contract staffing company Parc Group International has decided to postpone its planned flotation on the London and Irish Stock Exchanges because of weak stock market conditions.

"Whilst we believe that the opportunities and prospects available to the group would be enhanced by a flotation, we have no immediate need for access to capital markets," the chief executive Mr Peter Keenan said.

"We intend to re-visit our plans for a flotation at a time when market conditions are more favourable."

Mr Keenan said Parc had no problem finding investors prepared to subscribe for shares in the recruitment company - some 20 Irish and British institutional investors were lined up to invest. As recently as last week the company and its advisers were insisting that the planned flotation would go ahead but Mr Keenan said it was only when it came to pricing the shares on Tuesday that Parc realised that "the value achievable in the current market conditions would not reflect the true quality and prospects of the business".

Mr Keenan declined to say how much investors were prepared to pay for the shares as he said Parc intended returning to the market at a later date. Prior to postponement of the flotation, it had been speculated that the company would be valued at between £35 and £50 million.

The flotation, which was decided in principle last January, was designed to raise the company's profile and provide working capital to fund the group's development and reduce its debt. It would also provide an exit mechanism for Parc's venture capital backers, Mercury Asset Management (MAM), which has held 49 per cent of the firm since the 1995 management buyout.

Mr Keenan said Mercury and the company's staff - who hold a 10.5 per cent stake - had been very supportive. He also said that the postponement of the float would not limit the company's growth.

Parc is generating strong profits and cash at the moment, so much so that it may even consider repaying some of the mezzanine finance provided by Mercury.