Wise Group (WISE:SS), the Swedish staffing firm reported revenue yesterday for the first quarter ending 31 March 2019 of SEK 244.1 million (€22.7 million), an increase of 7.3% compared with the same quarter last year. 

The first quarter results were hit with non-recurring costs of SEK 6.0 million (€0.5 million) relating to the restructuring of subsidiary Edge HR AB as well as expansion costs and the development of a technical platform in subsidiary Brilliant Future AB.

During the period, Lars Gundersen was appointed new acting CEO of the subsidiary Brilliant Future AB and took office on 1 February 2019 and then joined the Wise Group's management team.

“The first quarter of the year for Wise Group's part has entailed a number of challenges,” CEO Ingrid Höög said.

Höög added that revenue growth was significantly lower than the group’s long-term goal, and that business deteriorated significantly, partly due to costs for the restructuring of the subsidiary Edge HR.

Revenue by business segment

According to the group, the recruitment & consultancy business segment continued to grow well. However, the group added that profitability declined, which to some extent is linked to waiting for customers' purchase decisions.

The HR Consulting and Leader Development segment continued its strong growth and profitability. However, profitability is lower than last year, where the first quarter contributed a very good margin, according to the group.

The digital HR services segment was charged with the cost of SEK 6.0 million relating to the restructuring of Edge HR and is affected by expansion costs and the development of technical platform in Brilliant Future.

Wise Group has operations in Sweden and Finland. The previous operations in Denmark are largely discontinued and the remaining operations are now reported in the Swedish segment.

Revenue by geography

The Swedish segment result was charged with SEK 6.0 million cost relating to Edge HR and Brilliant Future costs.

Meanwhile, the group said Finland had a weak start to the year, with sales at a lower level than last year. It is primarily in the recruitment & consultancy segment that sales have declined, which is due to longer processes at the customer.

“In the coming quarters, the group's focus will be on further increasing its market presence and increasing productivity in existing businesses. I have initiated measures to increase cross-selling between subsidiaries and to keep costs down as far as possible without hampering the core business,” Höög said.

The company stated that the Board, has begun a strategic review of Brilliant Future with regard to how the company's growth opportunities can best be utilised.

In trading yesterday, Wise Group shares closed at SEK 50.00 (€4.66), down 4.2% on the day. Based on its current share price the company has a market value of SEK 353.28 million (€32.89 million).