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Sweden – Troubled Uniflex report sales up but profits down for 2011

31 January 2012

Net sales were up by +35% at 1.5 billion Swedish Krona (€175.8 million*) for 2011 from 1.1 billion Swedish Krona (€130.3 million*) in 2010 at Uniflex AB (UFLXB: STO), the Sweden-based staffing group.

However, operating profit was down -3.9% at 66 million Swedish Krona (€7.58 million*) in 2011 compared to 70 million Swedish Krona (€7.89 million*) in 2010. Profit after tax was also down by +6.6% at 46 million Swedish Krona (€5.25 million*) in 2011 from 50 million Swedish Krona (€5.62 million*) in 2010. The company has attracted negative publicity this year over management failings in both Sweden and Norway

Commenting on the results Jan Bengtsson, CEO at Uniflex, said:

“We are pleased that we continue to grow strongly... [although] the end of the year was marked by lower demand from our customers because of the worsening world economic situation. Overall, we are pleased with our development in Sweden. Even in Norway, where we established ourselves last summer, it is good for us and our annual sales are already 27 million Swedish Krona (€3 million*) this year. In Finland and England, we have so far failed, but we are hopeful that 2012 will be better than 2011 in those markets.”

Sweden - Uniflex’s turnover in 2011 increased by 34% over the previous year. This was ascribed primarily to continued intensive sales work. At the end of the year, there was a marked slowdown mainly due to weaker economic activity. According to the Swedish staffing association, Bemanningsförtagen, for the first three quarters of 2011, the Swedish market was estimated to have grown by 38% over the same period in 2010. During this period Uniflex grew by 45%. 

Earlier this month, Uniflex were accused of having offered Swedish temporary employees fictional assignments to avoid paying a guaranteed salary to which they were legally entitled.

Norway - Growth in Norway is progressing as planned with branches having opened in three locations. However, in December it was discovered that the managing director of the Norwegian company deliberately manipulated accounts in the first half of 2011 so that the reported revenues were too high. The Managing Director left the company with immediate effect.  However, the company believes that the underlying operations in Norway are healthy and growing. In order to maintain the momentum Jan Bengtsson, the CEO of Uniflex, has been acting CEO of the Norwegian company. A new CEO has been appointed with effect from 1 February 2012. 

England - Earnings in the UK branch in Preston are still negative. A decision has been taken to close down unless the company reaches a minimum of a quarter’s positive operating result before the end of 2012. To make this possible, the cost base will be expanded with half a million each quarter. The money will be used for investments in sales and marketing. 

Finland - Revenues in the Finnish company is lower than expected, mainly due to management problems. The Company believes that revenues will increase in the future. 

In 2011 the five largest customers accounted for 37% (35% in the previous year) of the turnover; 72% of customers accounted for 80% of sales (71% in the previous year). During the past 12 months no single customer has accounted for more than 13% of Uniflex’s turnover.

Uniflex is a staffing agency that works in industry, warehousing, construction, electricity, customer services, sales, management, cleaning and retail. According to Staffing Industry Analysts’ recently published research, Uniflex is the fourth largest staffing firm in the fast-growing Swedish market with a 6% market share.

In early trading, Uniflex shares were down -5.75% at €4.11. This is down -14.71% from a year ago and down -33.69% from the 52- week high of €5.99. The company’s market capitalisation is €58.11 million.

*All Euro currency translations are Staffing Industry Analysts’ estimates based on average annual exchange rates for 2011 from www.oanda.com 

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