UK staffing firm Impellam Group plc (IPEL:LSE) reported revenue for the full year ending 31 December 2016 of £2,140.2 million, an increase of 20.4% compared to the previous year.

While revenue increased strongly, operating profit had a more modest lift of 5.8% to £47.1 million.

 “Despite a backdrop of challenging market conditions and uncertain political times, Impellam Group has delivered 20.4% increase in revenue growth. Some of our markets have continued to feel the pressure, especially healthcare and education. Many continue to face a shortage of candidates as skills gaps increase around the world,” Lord Ashcroft KCMG PC, Chairman said. “However, our focused strategy and diverse portfolio of Managed Services and Specialist Staffing businesses have enabled us to maintain growth, trade in-line with expectations and make good progress against our strategic plan. Most significantly, 2016 saw Bartech's first full year of operation within the group. This acquisition, along with our growth in Australasia, has continued to diversify our revenue streams and create further opportunities for the future.”

Impellam expanded its global workforce solutions provision through the acquisitions of Bartech in December 2015 and Global Medics in 30 July 2015. The company did not provide any indication of organic revenue growth excluding these acquisitions but did state that the integration of Bartech and Global Medics delivered in-year synergy savings of £2.1 million and the company projects annualised cost synergies will be in the region of USD 6 million by 2018. 

Revenue by Segment

Overall, Specialist Staffing saw revenues increase from £869.9 million to £1,022.2 million. Gross profit grew from £157.3 million to £178.4 million. Adjusted EBITDA increased from £34.5 million to £37.3 million. US Specialist Staffing delivered gross profit growth across all the company’s brands and sales efforts resulted in more than 150 new customer wins. However, in the UK, Specialist Staffing encountered a mixed trading environment, with the uncertainty of the EU Referendum, as well as NHS caps on locum pay rates and agency margins. Despite this turbulent period in the NHS, the nursing business still grew gross profit by 15% during 2016. In addition, Chadwick Nott and Carbon60 increased their revenue year-on-year by 13.5% and 7.7% respectively.

The company’s Managed Services businesses celebrated a number of important customer wins including Veolia, King's College Hospital and Pfizer. The company states that Pfizer selected Guidant Group based on their experience of Managed Service provision within the Life Sciences sector, coupled with its approach to supply chain management. Impellam also expanded its consulting and business process outsourcing offering into several customers including Ford, as well as delivering service enhancements and programme expansions at Delphi.

Julia Robertson, Group Chief Executive Officer, commented,

“The Brexit negotiations will likely be long-running and complex. Brexit itself does not have any particular implications for how we operate. If, for example, the free movement of EU labour were to come under threat, this would have no material effect on the vast majority of our employees and candidates. But in the wider context of customer sentiment, Brexit, and possibly the agenda of the new US administration, may continue to slow down decision-making for certain types of customer.”

“In the UK, the healthcare market continues to be challenging due to government caps and the possible impact of the new rules relating to off-payroll working in the public sector ('IR35'). Education will continue to face a lack of candidates, as increasing numbers of existing and potential teachers see more fulfilment and better rewards elsewhere.”

“In 2017, we also see new opportunities emerging. The fast-growing 'human cloud' market presents us with opportunities to diversify our offering to customers and candidates. As leading advocates of the benefits of flexible workforces, we see this market as an opportunity for growth and differentiation where we create economic value for our stakeholders.”

“The new Apprenticeship Levy comes into effect in 2017. All companies (with a salary commitment of more than £3m) will be required to invest 0.5% of their total salary bill in apprenticeships. We will help our clients embrace and prosper from this new requirement, as indeed we will ourselves; as I reported earlier, we enthusiastically support many apprentices of our own, with exceptional results. We expect to see both the investment and the return increase in 2017,” Robertson said.

“Our 2016 performance demonstrates what committed, purposeful and ambitious people can achieve, and I would like to thank our employees, our candidates, customers and investors for their trust, loyalty and commitment. We look forward to delivering on our promises again in 2017,” Robertson said.

In trading today, Impellam Group traded at £768.00, up 0.72% on the day and 11.72% below its 52-week high of £870.00, set on 6 April 2016. Based on its current share price the company has a market value of £383.8 million.