Swedish staffing company SJR in Scandinavia (SJRB: SS) reported revenue for the fourth quarter ending 31 December 2018 of SEK 98.5 million (€9.4 million), a decrease of 0.9% compared to the previous year.

“The fourth quarter went worse than expected, mainly due to a weakening order intake in December,” Per Ogunro, CEO of SJR, said. “In January, however, the order intake has recovered and January has a positive trend.”

Ogunro added that SJR’s expansion into other business areas led to operating profit being impacted by approximately SEK 6 million (€0.5 million).

In 2017, SJR merged with its subsidiary SW in Scandinavia AB, which provides consulting and recruitment services. Ogunro said the merger was made to “focus on more qualified assignments, which results in improved profitability and broadening our contact area with customers.”

“Another change that has been implemented during the year is an expansion of SJR's business areas,” Ogunro said. “SJR now offers consulting and recruitment services in Finance, HR, IT and Supply Chain.”

“Profitability is expected to be achieved after about 1-2 years depending on the business area's complexity and the required skills,” Ogunro added.

“The investment in our new business areas has largely gone according to plan during the year,” Ogunro said. “The new investments have impacted operating profit by approximately SEK 6 million (€0.5 million) in 2018. The goal is for the new ventures to contribute positively to the results in 2019.”

In November 2018, the company entered into an agreement to acquire Sweden-based Women Executive Search Sweden AB and, in January 2019, WES became a subsidiary of SJR. SJR stated that it was the first acquisition made the company since 1993.

WES is a managerial recruitment company with a focus on increasing equality and diversity in business. The purchase price consists of an initial purchase price and an additional purchase price based on WES operating profit during the period 2018-2020. This means the purchase price can be up to SEK 48 million (€4.5 million).

SJR said the acquisition will contribute positively to the group's sales and operating profit in 2019.

The company also reported full year results with net sales amounting to SEK 396.0 million (€37.8 million). Up 3.1% compared to the previous year.

Looking ahead, Ogunro said that changes and measures that the company has taken in 2018 are expected to bring about improved growth and improved operating profit in 2019.

In trading last Friday SJR in Scandinavia shared closed at SEK 51.20 (€4.89), down 3.40% on the day and 7.91% below its 52-week high of SEK 55.60 (€5.31), set on 30 January 2019. Based on its current share price the company has a market value of SEK 501.76 million (€47.9 million).