Empresaria Group plc (AIM: EMR), the international specialist staffing group has announced its unaudited interim results for the six-month period ended 30 June 2021 with revenue 3% lower in constant currency than the previous year.

The 3% decrease in constant currency is an improvement over last year’s 20% decline.

When compared to 2019, revenue was down 24% in constant currency.

Empresaria said the strong recovery in profits reflected market recovery and the benefits of operational investments. Adjusted profit before tax was up 67% on prior year (to £4.0 million) and 8% ahead of 2019.

Chief Executive Officer, Rhona Driggs, said, “We have had an outstanding first half performance delivering a 67% year-on-year increase in adjusted profit before tax. Our H1 results reflect not only an improving global economic environment but evidence the operational improvements we have put in place and the acceleration of many of these initiatives last year.”

Revenue by Sector

Excluding aviation, the group’s Professional sector had a strong first half with net fee income up 8% and strong growth in profits reflecting good performances across the sector which were reflected in a 59% increase in net fee income in the second quarter compared to 2020.

The group’s IT sector has seen a 3% fall in net fee income (2% rise in constant currency) compared to the first half of 2020 with a 5% increase in the second quarter against the prior year. 2020 was a strong comparative period with a delayed impact on the sector from Covid-19. As a result, revenue is down 14% year-on-year but improvements in gross margin on temporary and contract work has benefitted net fee income and this, combined with the benefits of restructuring activity in the UK, has led to an increase in adjusted operating profit of 33% compared to 2020.

The group’s healthcare sector performed extremely strongly in 2021 with net fee income 83% ahead of the first half of 2020 and adjusted operating profit up 800%.

Empresaria’s Property, Construction & Engineering sector is flat year on year and continues to see low levels of demand, particularly in our business supplying sales staff to the new home sector which has continued to operate under Covid-19 restrictions, limiting the demand for temporary staff.

The group’s Commercial sector has had a solid first half with net fee income up 5% on 2020, with the second quarter up by 17%. It has seen good recovery in its operations in Chile and in its temporary staffing businesses in Germany and Austria. However, the logistics business in Germany, which had a very strong 2020, has seen a fall in net fee income.

In Offshore Recruitment Services, net fee income has reduced by 6%, primarily driven by foreign currency fluctuations and the exit from a loss-making operation in Dubai with effect from 1 January which contributed £0.4 million of net fee income in 2020.

Revenue by Region

During 2021 the group implemented a new regional management structure and intends to align its internal and external reporting around this new structure with effect from 2022.

In the UK, revenue fell year on year but net fee income was stable reflecting improved gross margins. Adjusted operating profit increased as benefits from cost base changes made in 2020 continued into 2021.

In Continental Europe, the overall results were positive with growth in revenue, net fee income and adjusted operating profit. Strong performances in the Healthcare business in Finland along with the temporary staffing businesses in Germany and Austria more than offset the impact of the reduced performance from the company’s German logistics recruitment operation.

In Asia Pacific, the reduction in revenue and net fee income was driven by the group’s business supplying the aviation sector. Adjusted operating profit grew year on year, with contributions from the IT, Professional and Offshore Recruitment Services operations.

In the Americas, the company has seen significant growth, driven by the US Healthcare business. Elsewhere, the Commercial operation in Chile also provided strong year-on-year growth.

Looking ahead, the group stated, “We are encouraged by our strong start to 2021 and as a result, profits for the full year are now expected to be significantly ahead of the prior year and current market expectations. However, we remain cognisant of the ongoing challenges in some of our key markets and sectors.”

Shares in Empresaria Group last traded at £93.00 as of 15:44 GMT, up 15.80% on the day according to Google Finance. The company's year range for its share price is £40.00-£94.00. Empresaria has a market cap of £40.15 million.