Empresaria Group plc (AIM: EMR), the international specialist staffing group has announced its unaudited interim results for the six-month period ended 30 June 2019 with revenue 2% lower in constant currency and operating profit sliding by almost a third. However, the company states that it is still on track to meet full year market expectations for profit.

The company said that the decline in revenue was due to a change in mix between temp, perm and offshore recruitment services. The fall in profits in the first half was as expected given a low starting point for temps in Germany and Japan following regulatory changes in 2018, investment in the company’s central team from 2018 H2, and the impact of Brexit uncertainty in certain UK markets.

In June 2019 Spencer Wreford stepped down as CEO and the company’s COO, Rhona Driggs, was appointed in his place. Commenting on the results, Rhona Driggs said: "We are encouraged by our net fee income growth and we remain focused on efforts to further improve organic growth across the Group.  Although as expected, profit in the first half was lower than the prior year we remain on track to meet full year market expectations for profit."

"Our core geographies continue to show economic growth but there are headwinds from Brexit, a weakening German economy and increased geo-political risk. Operationally we are taking steps to ensure that we are truly leveraging the benefits of being a diversified group.  As part of this, we have recently announced the alignment of our business into core sectors to improve collaboration and to leverage synergies in our operations.  Our diversified and specialist model provides a hedge against exposure to any one region or sector."

"We believe the actions we are taking are the right ones and that we are well placed to continue to drive organic growth and to improve profitability."

Revenue by Sector

By sector, strong revenue growth in commercial staffing and the company’s offshore recruitment services was offset by declines across its professional staffing sectors. The company attributed its success in commercial staffing to its investment in Peru in July 2018.

 Revenue by Region

In the UK, Empresaria, saw an adverse impact from Brexit uncertainty across a number of businesses with hiring activity reducing in financial services and construction related industries.

In Continental Europe, Empresaria experienced a reduction in revenue as its businesses in Germany looked to rebuild their temporary numbers following regulatory changes last year. Weakness in the automotive industry in Germany also had an adverse impact.

In Asia Pacific, revenue declined in the airline pilots business. Revenue also fell in the Japanese IT sector following regulatory changes last year.

The Americas segment saw solid performances from Latin America businesses, including the contribution from the July 2018 investment in Peru, which was offset by a dip in the company’s US IT business which had a challenging comparative following an excellent start to last year.

During the first six months of 2019, the company has opened three new offices, with ConSol Partners opening in Austin, USA and Become opening offices in Brisbane, Australia and Auckland, New Zealand. 

In July, Empresaria signed a deal with Bullhorn to bring their technology platform to multiple brands in the Group.  The company states that its businesses have historically under invested in technology and, therefore, expects to experience significant benefits once this technology is fully implemented.

Empresaria’s Board is confident that the Group's strong diversified platform will drive its next stage of growth and that structural drivers remain strong, with high demand for specialist skills across target sectors. While the macro economic environment is mixed, the Group's core geographies are still showing economic growth. The Group remains on track to deliver full year expectations for profit and looks forward to the future with optimism.

In trading today, Empresaria’s shares last traded at £60.25, down 5.8 on the day and 4.3% below its 52-week low set on August 19th. Based on its current share price, the company has a market value of £31.37 million.