UK staffing firm Impellam Group plc (IPEL:LSE) reported revenue yesterday for the six months ending 30 June 2023 of £1.03 billion, an increase of 9.1% on a like-for-like (LFL) basis when compared to the previous year. On a reported basis, revenue rose by 10.1%.

Impellam’s unaudited interim results for its continuing operations showed gross profit increased slightly by 0.1% on a like-for-like basis to £97.6 million.

The group’s continuing operations exclude the Healthcare (Medacs Global Group in the UK, Ireland and APAC) and Regional Specialist Staffing (Blue Arrow, Chadwick Nott, Career Teachers and Tate in the UK) businesses.

Earlier this year Impellam announced the sale of the above named healthcare and specialist staffing businesses to Twenty20 Capital.

The group reported EBITDA of £11.0 million, a 13.1% (LFL) decrease due in part to £0.6 million of one-off separation costs in the period associated with the disposal of the businesses.

Julia Robertson, Chief Executive Officer, said, "Our H1 trading has delivered a robust result against the backdrop of muted client and candidate confidence which resulted in declines in permanent placement against strong prior year comparators. These declines however were more than offset by temporary placement growth.”

“The disposal of our Healthcare and Regional Specialist Staffing portfolios has allowed us to return a further £60 million to shareholders in H1 whilst improving our overall cash position,” Robertson continued. “With the disposal complete, we have entered a new strategic phase as an integrated workforce solutions group focused on Managed Services and high value, specialist STEM talent. We see great opportunity in these growth segments. 

“During H1 we have undertaken activity to refine our market facing strategy whilst completing activity to separate from the disposed businesses. The separation activities are tracking to plan.  Whilst costs have been incurred to separate the businesses we have seized the opportunity to bring our group together in a new, streamlined and resilient customer centric operating model, which will drive future efficiencies in our delivery,” Robertson said.

Revenue by region

In the UK & Europe, the group said it delivered a resilient result in challenging market conditions which particularly affected the technology market (Lorien) and permanent recruitment, leading to an overall gross profit decline of 3.1% (LFL) to £52.6 million. However, Global Managed Services (Guidant and Comensura) out-performed and delivered an increase in gross profit of 21.6% (LFL). The region saw a £3.6 million reduction in permanent recruitment fees which, due to the strong conversion to operating profit, led to the decrease in adjusted operating profit of 27.5% to £6.2 million.

The separation of the disposed business is tracking to plan and expected to complete in Q4.  Associated costs of the separation amounted to £0.6 million in the period and there is a tightly governed programme which will deliver savings in H2 and beyond.

The North America region gross profit increased by 1.2% (LFL) to £39.6 million, driven by the engineering and science brands in STEM (Bartech Staffing and SRG) offsetting challenging market conditions in technology (Lorien) and the finance sector impacting Global Managed Services.

Temporary recruitment fees increased in STEM by 20.1% (LFL), more than offsetting the decline in permanent recruitment fees.  However, the change in business mix drove a lower conversion and a reduction in adjusted operating profit of 9.7% (LFL) to £2.8 million (H1 2022: £3.1 million).

The APAC region performed strongly in 2023 with gross profit increasing by 34.0% (LFL) to £5.4 million with strong growth across the Global Managed Services portfolio (Comensura and Guidant) on both traditional and digital platforms. As a consequence of gross profit growth, adjusted operating profit increased by 264.0% (LFL) to £1.0 million.

Revenue by segment

Impellam also announced that the directors of Impellam have requested, and the Panel on Takeovers and Mergers has consented to, a further extension to the deadline for HeadFirst Global to make an offer to buy the company, until 5.00 p.m. (London time) on 31 August 2023.

The company first announced in early July that it was in talks with HeadFirst regarding being acquired. The deadline was then extended in early August to 21 August and then again further extended.

The deadline can be further extended by the board with the consent of the Panel in accordance with Rule 2.6(c) of the Code. Any consent for a further extension of the deadline will only be requested by the board with the as approval of the company's majority shareholder.

Headfirst is headquartered in the Netherlands and listed on Euronext Amsterdam.

Looking ahead the company said, “Our newly focused integrated workforce solutions and STEM talent business has shown resilience in H1 against the backdrop of extremely challenging market conditions. Given the opportunities that the persisting global talent shortage present we are well placed for growth when customer and candidate confidence return.” 

“Our optimism is further buoyed by the number of workforce solutions implementations going live in H2,” the company added. “As we complete our separation from the disposed business we are identifying opportunities in our new operating model to deliver better outcomes for our customers and efficiency savings which will drive further improvements in our underlying performance in H2 and beyond.”

Impellam Group shares last traded at £701.00, down 1.61% on the day and 8.96% below its 52-week high of £770.00, set on 5 July 2023. The company has a market cap of £319.55 million.