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UK – World Careers Network reports sharp decrease in H1 profits

20 April 2015

World Careers Network (WOR: LN), a provider of talent management systems and e-Recruitment solutions, today reported turnover for the six months ending 31 January 2015 of £3.5 million, a decrease of 16.3% from £4.2 million during the same period last year.

  H1 2015 H1 2014 Change
Turnover £3.5 million £4.2 million -16.3%
Operating Profit £286,726 £1.0 million -71.4%
Profit After Tax £247,369 £794,023 -68.8%

According to the company’s financial statement, the decrease in turnover was accompanied by a small increase in overheads of 1% to £3.2 million. As a result, profits before tax decreased to £0.3 million, down from £1.0 million a year ago.

A decline in sales, combined with World Careers Network’s (WCN) continued investment in key areas of the business, significantly impacted the company’s profits during the first half of the year. The fall in sales was due, in part, to reductions and delays in the sales of online tests; with the remainder due to a significant decline in the value of a major contract.

The decrease in profit is largely attributed to a reduction in value on the renewal of a major contract, without the anticipated compensating growth elsewhere, and the ongoing investment in resources to develop the business.

Looking forward, Charles Hipps, Chairman of WCN, commented: “We expect to see some recovery in sales and profitability in the second half of the year, as major new contracts come fully online and delays in the sales of online tests, albeit at a lower level, are made.”

“However, we do expect profits to continue at significantly lower levels than last year as we make further substantial investments in the business; particularly in the area of sales, marketing, product development, delivery, and customer success; all of which are aimed at generating future long-term growth.” he added.

In trading today, the company’s share price dropped by 19.2% to £2.63, an increase of 36.1% compared with a year ago. Based on its current share price, the company has a market value of £19.9 million.