Accounting services firm WHK says merger talks with financial advisory and insurance group SFG are continuing and commercial due diligence on the deal is being undertaken.

WHK CEO John Lombard says his board will continue to update the market in due course “and is seeking to resolve its position expeditiously”.

The company expects second-half earnings before interest and tax to be down 20% on the previous corresponding period.

Demand for discretionary business advisory services is forecast to remain weak in the fourth quarter, Mr Lombard says.

“But our planned cost efficiencies will be ahead of target for the full year, with further benefits to be released in the 2014 financial year. Accounting compliance and financial services are expected to remain on track.”