Profits before tax (PBT) rose +22.7% to £32.9 million for FY 2011, up from £26.8 million in 2010 at Impellam Group Plc (IPEL:LSE). The company said it will be in a position to pay a cash dividend starting with the 2012 interims, pending shareholder approval.

Preliminary results for the full year ended 30 December 2011 show revenue up by just under +2% at £1,131.4 million from £1,113.6 million the year before. Gross profit remained largely unchanged at £182.3 million from £182.2 million while underlying operating profit increased +13.4% to £34.8 million (2010: £30.7 million). 

The company has made significant advances in improving its debt position. Net debt reduced by £19.6 million to a net cash position of £1.8 million as at 30 December 2011 (31 December 2010: £17.8 million net debt). Debt has progressively been paid down since 2008 when it stood at £61.8 million.

Speaking about the results Cheryl Jones, Chairman at Impellam commented: “The financial structuring of the Group has been critical for the company in that a highly leveraged historic debt position had to be addressed. Conversion of margin to profit and through to cash flows has been an imperative in this regard and remains so going forward.”

“The strategy requires the Group to align its brands into focused market-facing businesses. To support this divisional and group strategy, two new holding companies have been established in 2011 to house the realigned Medacs Healthcare and Carlisle Support Services brands.”

The UK and US Staffing businesses have begun the realignment of their brands to support accelerated development of evolving client requirements for Managed Service Offerings and Client Innovation; moreover, accelerated development of the Science, Engineering and Technology related brand activities is also key. Restructuring of these businesses is underway”, Mr Jones added. 

However, looking forward, Cheryl Jones said that “the primary trading markets of the UK and US are anticipated to continue to show tough conditions.”

Revenue in the UK Commercial Staffing business increased +4.9% to £496.1 million for the year from £472.9 million. Gross profit was up +2.7%. Operating profit was £19.8 million in 2011 compared to £14.9 million in 2010.

Focus on the evolving managed services market has supported much of the revenue growth in these businesses. Both Tate and Blue Arrow Catering brands saw reduced revenues year-on-year, resulting from market-related conditions.

Revenue in UK Staffing – Professional & Technical, which comprised the Science and Technology and Professional parts of the business, rose +14.9% to £193.1 million from £168.1 million. Gross margins increased +11.6%. Operating profit was £7.8 million in 2011 compared to £4.3 million in the prior year.

Science and Technology sectors, through the SRG and Scom brands, had a +16.3% increase in revenues, reflecting the focus to this sector and the higher demand for services. The Professional brands achieved an 8.8% improvement in revenues as the client service offering was expanded to support managed service requirements in the market.

Revenue in US Staffing increased 5.0% (in local currency) during the year to £166.6 million from £164.9 million. Gross profits were up +3.3% and operating profit was £4.7 million compared to £4.0 million in 2010. According to the company, the US Staffing segment continued to expand its current client base and to emphasise its managed service offerings to clients so as to meet the evolving demand for strategic solutions in the marketplace. The US operations faced tough economic challenges, whilst completing efficiency programmes planned for the end of the year so as to continue to lower their cost of service delivery.

Medacs Healthcare Group, which provides healthcare recruitment and managed healthcare services to the public and private sectors, was hit by the turbulence faced by the UK public sector. Revenue in 2011 dropped -7.7% to £186.8 million over the prior year. Gross profit was down -12.8% and operating profit fell from £11.6 million in 2010 to £9.1 million in 2011. 

Orders for doctor assignments declined -14.5% and average hours for these assignments declined -17.6%. By increasing client density and fill rates, Medacs limited overall shrinkage in invoiced doctor hours to 8.8%. The nursing and social care sectors increased invoiced hours by 6.6% and 7.0% respectively.

Carlisle Support Services, the company’s outsourced facilities services arm (just under 8% of Impellam’s total revenue) fared less well. Reported revenue declined -6.8% to £88.8 million in 2011 compared to £105.3 in the prior year.

Days sales outstanding (DSO) for the Group was 35.3 at 30 December 2011 compared to 36.0 at 31 December 2010.

Impellam Group plc conducts business primarily in the UK and the US, with smaller operations in Australia, Ireland, New Zealand and mainland Europe. The Group employs nearly 6,000 people, including 2,200 managers and consultants and more than 3,500 support services workers, across a network of 230 branch and regional offices. Impellam Group is ranked 15th in our 2010 Top Global Staffing Companies List.

In early trading today, Impellam’s share price was 30.5 pence, up +7.16% on the prior day and up +18.6% on a year before. The share price is also 45.43% above the 52-week low of 21 pence set on 16 January 2012. This values the company at £127.58 million.