Staffline Group (STAF: LSE), the UK-based staffing and employability organisation, reported revenue for the six months ending 30 June 2018 of £481.0 million, an increase of 12.4% compared with the first half of 2017.

Underlying results were as follows for H1 2018.

Underlying profit was reduced by 6.8% in the period. Gross profit decreased by £0.5 million, or 1%, to £53.6 million (H1 2017: £54.1 million).

“With the business mix increasingly weighted towards the more seasonal recruitment business, the phasing of profits has moved slightly to H2,” the group stated.

Staffline has recently made a number of acquisitions. In July 2018 the group acquired Grafton Recruitment’s Irish business. Also during the same month, Staffline announced that it had completed its acquisition of LDA, a UK-based Apprenticeship Levy provider from Learndirect Apprenticeships Limited. In March 2018, Staffline announced that it completed the acquisition of Endeavour Group Limited ("Endeavour") and its subsidiary Vital Recruitment Limited.

Speaking exclusively to Staffing Industry Analysts, CEO of Staffline Group Chris Pullen commented on the acquisition of Grafton’s Irish business, “The business of Grafton was a key competitor in the same business doing the same work that we’ve been doing, so the acquisition really just consolidates our presence.”

Staffline’s core sector is blue-collar industrial temporary workers. When asked about further acquisitions, Pullen said the group is keen to further consolidate this market, “partly by organic growth, but also by appropriate acquisitions.”

“We are looking for companies that fit the operating model of being on-site blue-collar industrial, but are also extremely well-run companies,” Pullen said. “Good businesses with a strong customer-base and minimal overlap with our existing customer base and in a region where we have a limited presence. Vital is a good example of that.”

Staffline will continue to look in the UK, and Ireland with Pullen saying that in due course, the group will look to expand in Continental Europe.

On the LDA acquisition, Pullen commented to SIA, “PeoplePlus has been going through a transition the last couple of years where the Work Programme, which has been a core business of PeoplePlus, has been winding down the last couple of years.”

“We have been transitioning the business to be a skills training provider. Our transition is going well and the acquisition of LDA just further cements that transition,” Pullen said. “Within PeoplePlus, we anticipate organic growth as we further build out the Apprenticeship Levy business”.

Staffline operates in two divisions: Recruitment and PeoplePlus, the group’s employment support, training services and justice company.

The decrease in PeoplePlus revenues reflected the continued wind down of the division’s Work Programme and the ceasing of new referrals in March 2017. The group added that non-Work Programme revenues grew by 28%. The acquisition of LDA is expected to have a positive impact on the PeoplePlus division. The group added that it has also made good progress delivering Fair Start Scotland, which launched in April.

In its recruitment division, Staffline said it has invested in digital platforms which are both “increasing candidate attraction and retention capability”.

“We have made an excellent start as we continue to achieve good organic growth in Recruitment, supported by a series of accretive bolt on acquisitions,” Pullen said. “Our investment in digital transformation, combined with our worker engagement strategy, will provide Recruitment with increasing differentiation as we seek to further consolidate the market.”

“In PeoplePlus, we have transitioned from reliance on the Work Programme, harnessing our knowledge and experience in the area, to become the market leading Skills and Training provider. In PeoplePlus Apprenticeships, we have developed a market leading position and an excellent platform for future growth,” Pullen said. “We are confident that the strategic decisions taken in the first half of 2018 will enable us to deliver our current 2018 expectations and provide the basis for our continued future growth."

Looking ahead, Pullen commented to SIA on the possible impact that the UK leaving the EU would have on its business, “We see the potential risk from Brexit decreasing all the time and we’re becoming increasingly confident that we won’t be affected by the Brexit process.”

He added that Staffline is confident in government initiatives to retain the maximum number of EU migrant workers in the UK and is also confident that the pool of workers in the UK is not going to diminish with Brexit.

Staffline said its outlook for the second half of 2018 remains positive and will continue to focus on the consolidation of its core vertical of blue collar industrial temporary workers.

“The integration of the Recruitment H1 2018 acquisitions are progressing as planned and the PeoplePlus transition away from the work programme is nearly complete,” Pullen said. “As a result, we are confident of delivering on current underlying profit market expectations for FY 2018.”

“Staffline continues to work towards its five-year growth ambitions and expect a meaningful growth in group earnings in 2019, driven by the full year effect of recruitment acquisitions in the current year,” Pullen said.

As of last trade, Staffline Group traded at £1,048.20, down 0.36% on the day and 19.11% above the 52 week low of £880.00 set on 20 March 2018. Based on its current share price the company has a market value of £299.56 million.