Second-quarter net sales at NGS Group AB (NGS: SS), the Swedish healthcare and education staffing firm, decreased 5.7% from the year-ago quarter. The group also reported operating profit increased 15.0% with an operating margin of 8.2% compared to 6.7% in the year-ago quarter.

“The second quarter of the year is still in line with developments from the beginning of the year,” CEO Ingrid Nordlund said. “We have strong growth in our nursing crew and our leadership management activities, but the situation with low margins in medical staff is unchanged. Therefore, we have continued to opt out of business in order to increase our margins in the long term, resulting in a 5.7% revenue gap compared with the corresponding quarter of last year.”

NGS Group said that operating profit for the second quarter was positively affected by SEK 4.0 million (€0.4 million) when a provision for additional purchase price had been dissolved. Adjusted for this one-off item, operating profit for the second quarter of 2018 amounted to SEK 9.0 million (€0.8 million), with an operating margin of 5.7%.

In the group’s Leadership segment, NGS Group reported positive demand for both interim and recruitment services among all categories in the public sector. The group added that growth also came from Source, a company it acquired in June 2017, and from Human Capital, which the group acquired in 2016.

In the Crew segment, NGS Group reported that growth continued in its Sweden nursing business, which extends across the country with the group adding that county councils have reduced their orders, while the need has increased for others

“The organisational changes that began during the first quarter were fully implemented during the second quarter and we now have an organisation adapted to the changing market conditions that the social services team needed to adapt to in the last year,” Nordlund said. “As a supplier with a wide range of framework agreements, we now have a stable, albeit marginalised business, in this area.”

“We see continued good underlying demand for the majority of our service areas,” Nordlund said. “Our mix of staffing and management with recruitment and interim solutions makes us feel confident in our financial goals and deliver them over time.

Nordlund added that the group’s acquisition strategy is firm and that their focus for 2018 is on improved profitability.

The group also reported net sales for the period January-June, amounting to SEK 323 million (€31.2 million), a decrease of 0.2% from last year.

In trading yesterday NGS Group shares closed at SEK 36.90 (€3.57), down 7.05% on the day. Based on its current share price the company has a market value of SEK 332.94 million (€32.2 million).