Revenue at Impellam Group plc fell 11.3% in constant currency in 2020, according to earnings released today. Following a significant decline in sales in the second quarter, the Luton, England-based global staffing provider reported revenue recovered through the rest of the year.

“The impact of the Covid-19 pandemic on our business was dramatic. It impacted demand for our services — both positively and negatively — changed the way we communicated with clients, candidates and colleagues and challenged our thinking and the way we operate,” CEO Julia Robertson said.

Impellam Group plc reported gross profit fell 16.8%, primarily in the second quarter during extensive global lockdowns; UK was the hardest hit. UK gross profit fell by 16.9% while North America gross profit fell by 4.5%.

Robertson noted that eight clinicians from Impellam lost their lives to Covid-19 during 2020.

Revenue by service types

“Global managed services” were among the company’s most resilient in terms of performance and the company reported its managed services businesses are well-placed for recovery in 2021.

Robertson noted Impellam’s “global specialist staffing” brands in the UK and US faced challenges from Covid-19 and, in the UK the IR35 off-payroll working rules.

“The UK Government’s decision to pause IR35 came too late to reverse the policies that many of our enterprise customers had made, leading to a significant reduction in the UK of the use of IT contractors during H1 2020,” she said. This coincided with the start of the pandemic, which had an immediate impact on permanent hiring in both the UK and US.

Impellam’s “regional specialist staffing” brand was among the hardest hit as light industrial and manufacturing workers were unable to work from home.

Impellam’s “healthcare” business was profoundly affected as well by the pandemic, Robertson said. Its nursing business saw 25% growth in 2020. On the other hand, the segment was impacted by the closure of borders and the cancelation of elective surgeries and non-urgent clinical activity.

Among other things, Impellam also noted:

• Headcount at the end of the year was 16.8% lower than in the previous year.
• The company cited noncash impairment charges on acquired goodwill and intangibles of £22.2 million.
• Impellam launched Flexy in Australia, an online, on-demand staffing platform.

Outlook

Robertson said the company is cautiously optimistic about the recovery in 2021.

“Whilst we do not anticipate a return to 2019 performance levels on a full year basis, we are seeing the benefit of the assertive cost management and strategic transformation actions we took in 2020 in our Q1 results to date,” she said. “We are making selective investments in headcount in our attractive growing markets, particularly STEM and managed services and we are also investing in a customer office and a digital core systems upgrade.”

Share price and market cap

Shares in Impellam closed at £288.00 (US$396.97) today in London; they were 10.0% below their 52-week high, according to FT.com. The company had a market cap of £129.3 million (US$178.2 million).