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Impellam Group Announces Results

February 16 2012

U.K.-based Impellam Group PLC (AIM: IPEL) announced today it swung to positive territory in 2011, closing the year with £1.8 million (US$2.8 million) in net cash, compared with net debt of £17.8 million in 2010. In 2008, the company’s debt was £61.8 million.

“I am pleased to announce Impellam Group plc concluded 2011 with a strong set of financial results whilst at the same time completing several important milestones in support of repositioning the Group’s businesses,” said Chairman Cheryl Jones.

U.S. staffing revenue rose 5.0 percent in fiscal 2011 from 2010, as measured in dollars, the company also reported. Total U.S. staffing revenue was £166.6 million (US$257.4 million) in 2011, up from £164.9 million posted in 2010. Operating profit in the U.S. was £4.7 million (US$7.3 million), compared with £4.0 million in 2010.

“The US Staffing segment continued to expand its current client base and to emphasize its managed service offerings to clients so as to meet the evolving demand for strategic solutions in the marketplace,” according to the company’s earnings report. “During the year, Guidant Group was relocated to an expanded headquarters and operational environment, allowing increased scalable expertise in the managed services segment, including expanded payroll service programs to its client base. The US operations faced tough economic challenges, whilst completing efficiency programs planned for the end of the year so as to continue to lower their cost of service delivery.”

The U.S. operations include Corestaff Services, Leafstone, Guidant Group, InfoCurrent, S.Com and SRG Woolf.

“The UK and US Staffing businesses have begun the realignment of their brands to support accelerated development of evolving client requirements for Managed Service Offerings and Client Innovation,” Jones said. “Moreover, accelerated development of the science, engineering and technology-related brand activities is also key. Restructuring of these businesses is underway.

The company’s U.K. commercial segment rose 4.9 percent to £496.1 million in 2011, compared with £472.9 in 2010. The professional and technical staffing segment saw revenue jump 14.9 percent to £193.1 million, compared with £168.1 million in 2010.

Two new holding companies were established in 2011 to house the realigned Carlisle Support Services, which does not provide staffing, and Medacs Healthcare brands. Medacs Healthcare Group, which provides heathcare staffing as well as managed services and recruitment process outsourcing services, fell 7.7 percent in 2011 to £186.8 million.

“Medacs Healthcare Group experienced an anticipated reduction in demand in the doctors’ staffing business in the U.K. during 2011,” the report said. While orders for doctor assignments fell 14.5 percent, invoiced hours fell just 8.8 percent. The nursing and social care sectors increased invoiced hours by 6.6 percent and 7.0 percent, respectively.

Overall, revenue was £1.13 billion (US$1.75 billion) in 2011, up 1.6 percent from $1.11 billion in 2010. Included is revenue from Carlisle support Services, which does not provide staffing services. Gross margin was 16.1 percent, down from 16.4 percent in 2010.

Impellam Group plc (AIM: IPEL)
For the year ended Dec. 31, 2011, compared with the year-ago period.
Revenue: £1.13 billion (US$1.75 billion), +1.6 percent
Operating profit: £34.8 million (US$52.8 million), +13.9 percent

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