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Sweden – NGS Group plans for acquisitions despite squeeze on profits

19 August 2014

Swedish healthcare and education recruitment firm NGS Group AB (NGS: SS) reported revenue of SEK 120.2 million (€13.1 million) for the second quarter ending 30 June 2014, an increase of +26.3% compared with SEK 95.2 million (€10.4 million) during the same period last year.

NGS Group achieved an operating income of SEK 8.5 million (€925,788), a rise of +1.8% from SEK 8.3 million (€909,534) a year ago. Net profit for the period fell slightly by -2% to SEK 6.5 million (€704,022), down from SEK 6.6 million (€718,093) last year.

The company’s revenue growth can be attributed to its acquisition of Nurse Partner Scandinavia in May 2013, which increased NGS Group’s healthcare market share in Sweden and Norway.    

The company reported an operating margin of 7.1% during Q2 2014, compared with 8.8% during Q2 2013. The decline in operating margin is attributed to lower demand in the education sector coupled with increased costs in Norway. The company also incurred greater costs compared with last year, primarily from increased use of subcontractors and an increase in staff costs.

Ingrid Nordlund, Managing Director of NGS Group, commented: “During the second quarter of the year we achieved revenue growth of +26% and organic growth of +10% compared with the same quarter in 2013. Considering that a large volume of NGS’ core business comes from the acquisition of Nurse Partner over a year ago, I am very happy with this result.”

“Our healthcare business operations continue to develop positively in both medical and nurse staffing in Sweden. The summer period is traditionally the period with the greatest demand for healthcare. We have chosen to focus on the Swedish market, which is now perceived as more attractive than the Norwegian by our staff. Growth in the healthcare sector in NGS Sweden is +31%. The growth we have achieved with existing and new customers are we have a good spread across the country.”

“As for the Norwegian market, we are experiencing continued sluggishness. Sales in Norway accounted for 8% of business activity in the second quarter. The good news is that there was an improvement in the operating margins of our Norwegian business during the second quarter, compared with the beginning of the year,” she added.

Looking forward, NGS Group has ambitions to grow organically by at least +15% per year over the coming years. The company also advised that it has plans to grow through acquisitions.  

In trading today, the company’s share price fell by -13.7% to SEK 113 (€12.33), an increase of +31.7% compared with a year ago. Based on its current share price, the company has a market value of SEK 252 million (€27.5 million).  

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