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Ireland – CPL Resources grows H1 revenue but operating profits slip

29 January 2015

Irish recruitment firm CPL Resources (CPL: ID) reported revenue for the six months ending 31 December 2014 of €193.2 million, an increase of 4.8% compared with €184.3 million during the same period last year.

(€m) H1 2015 H1 2014 Change
Revenue 193.2 184.3 +4.8%
Gross Profit 28.2 27.0 +4.5%
Operating Profit 6.0 6.9 -12.9%

John Hennessy, Chairman of CPL Resources, commented: “In the six months to 31 December 2014 revenue generated from temporary assignments was €182.0 million, representing 5% growth over [the] same period last year. The gross profit on these fees was €17.1 million, 1% higher than the six months to 31 December 2013.”

“Gross profit generated from permanent placements in the six months to 31 December 2014 was €11.2 million, an increase of 11% compared with last year. Permanent fees generated outside of Ireland represented 42% of total permanent fees in the period.”

“We have made significant investment in our people, operations, infrastructure and facilities, and much of the associated cost has been charged against profits. As a consequence, our conversion rate of gross profit to operating profit has fallen to 21.1%, from 25.4% in the same period last year.”

Looking forward, Mr Hennessy concluded: “In the six month period to 31 December 2014 we have increased significantly our investment in the Group's operations. We have done so in order to be well positioned to take advantage of expected improvements in our key markets. Although we still face challenges in several markets and sectors arising from economic uncertainty and continuing competitive and client pressures, our strong financial position will provide us with the resources to capitalise on growth opportunities as they arise. While the pace of recovery remains uncertain in many markets, we expect the remainder of the financial year to show profitable growth on the previous six months for the Group.”

In trading today, the company’s share price tumbled by 14.4% to €5.52, a decrease of 23.8% compared with last year. Based on its current share price, the company has a market value of €197 million.