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Large Scandinavian recruiter Uniflex (UFLXB: STO) has been hit by weak demand in the first quarter of the year with net sales falling -9% to €39.1 million (SEK 332.6 million). Sales were down in Sweden, its largest business division.
In the three months to March, the company posted an operating profit of €0.2 million (SEK 1.7 million), a sharp decline from the €0.8 million (SEK 7.0 million) seen a year ago. In the period the firm posted a loss of €23,000 (SEK 0.2 million), compared to a profit after tax of €0.5 million (SEK 4.4 million) in the prior year.
CEO Jan Bengtsson blamed overall weak demand for staffing services for the poor results. In Sweden, the firm recently lost out on a lucrative contract with one of its biggest customers, which will lead to job cuts and a decline in revenue. “Revenues will decrease by €0.47 million (SEK 40 million) per quarter from May 2013,” the company warned. Management expects redundancy costs of up to €0.6 million (SEK 5 million) in the second quarter of the year.
The firm recently entered the German market and expects to be profitable by 2014. Mr Bengtsson added that business operations in Finland are strong while its Norwegian business, largely focused on the construction industry, was impacted by lower seasonal activity.
The company has won several contracts this year, including with engineering company Metso, which should add nearly €5 million to annual revenue.
Uniflex has a market share of around 6% in Sweden, according to research by Staffing Industry Analysts. The firm provides staffing services to industry, warehousing, construction, and management sectors.