Dillistone Group (DSG: LSE), the UK-based supplier of recruitment software to the international recruitment industry reported group revenue stayed broadly flat at £2.826 million for the six months ended 30 June 2023 from £2.823 million in H1 2022.

The group noted its first H1 adjusted operating profit since 2018 of £0.036 million (H1 2022: loss (£0.129 million).

In its Annual General Meeting in June 2023, the company said trading was in line with expectations for H1 2023.

Giles Fearnley, non-executive chairman, said, “In my statement in the annual report, I said that the underlying business had improved. These results confirm that statement with the group returning an adjusted operating profit for the first time since 2018, despite the challenging economic environment.”

Recurring revenues represented 91% (H1 2022: 88%) of group revenue. Recurring revenue stood at £2.56 million, up 4% from £2.47 million the year prior.

Dillistone also announced that the board expects to deliver full year profit results in line with market expectations.

Adjusted EBITDA increased by 34% to £0.581 million from £0.435 million in H1 FY2022. This resulted in a higher EBITDA margin of 20.6%, compared to 16.7% in H1 FY2022, the group said.

Inclusive of acquisition-related and other items, the operating profit was £0.027 million compared to a loss of (£0.105 million) in H1 2022.

The loss before tax decreased to (£0.046 million) from (£0.274 million) in H1 2022.

Dillistone highlighted a strong start to the year for all products, followed by deterioration in Q2 due to widely reported drop in UK advertised vacancies during this period leading to a downturn in demand for many of its clients.

The group also noted improved operational gearing ensures that the business is able to react rapidly to changes in demand.

Post period end, the company said major enhancements were delivered for Talentis, Infinity and Mid-Office, including integrations with OpenAI (the technology behind ChatGPT) for both Talentis and Infinity.

Looking ahead, Fearnley said, “Even with the current economic turbulence, we fully expect to make further progress during the remainder of the year. The board is confident of delivering full year profit results in line with market expectations.”

As of last trade, Dillistone Group traded at £13.50, no change on the day and 12.50% above the 52-week low of £12.00 set on 7 November 2022. The company has a market cap of £2.66 million.