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Dutch staffing firm USG People (USG:AEX) expects market conditions in most European countries to remain fragile in 2013 after demand for staff slowed in the past year. The firm today reported that revenue in the fourth quarter fell -11% to €704.7 million.
The firm also announced selling off its USG Energy brand to private equity firm Rabo Capital in order to streamline service offerings. The Group expects to register a gain of €39 million in the first quarter from the sale.
USG People, which is among the ten-largest staffing companies in the world, has kept cost controls tight. But the firm could not avert a slip in profits during the three months to December as gross profit dropped -15% to €143.6 million. Net income was down a sharp -22% to €6.9 million. During the quarter, the firm faced a non-recurring charge of €3.8 million.
“2012 was a transitional year for USG People, in which we achieved a great deal, in challenging economic circumstances,” said Rob Zandbergen, CEO of USG People.
“We also devoted a great deal of attention to stepping up our commercial activities and making them more professional. In the fourth quarter of 2012 in particular this resulted in a large number of new contracts, the positive impact on revenue of which we will start to experience in the coming months.”
The firm saw revenue in its staffing segments slide during the quarter. General Staffing revenues fell -10% to €409.2 million in the fourth quarter. The Netherlands still registered a slight decline whilst revenue in Belgium and France stabilised. Spain saw a +6% increase in revenue in the fourth quarter and Poland also returned to revenue growth.
Revenue in the Specialist Staffing unit fell by -14% to €237.6 million in the quarter with the revenue decline slowing in the Netherlands but accelerate in Belgium. In Germany and Italy, the revenue decline narrowed after stabilising in the previous quarter.
Revenue at Professionals rose +2% to €57.9 million, but organically revenue was down -4%. The greatest growth was realised in the finance segment as a result of organic growth in Belgium. Demand in other professional areas weakened, impacting ICT and marketing & communication the most.
In early trading, the company’s share price was up a slight +0.2% at €6.16, down -20% from a year ago. The firm has a market value of €490.25 million, based on its stock price.