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Uniflex (UFLXB: STO), one of the largest staffing companies in Scandinavia, has decided to close its operations in the UK after the company failed to make profits there since entering the market.
After announcing the news this morning, the company’s share price dropped by -1.8% to SEK 33.40, which is down by -38% from a year ago.
In the past, Uniflex had already warned it would shut down its UK business if profits continue to fall. Most recently in the first quarter of 2012, things were looking meagre in the UK as financial results there remained in the minus.
“Last autumn, we announced that we would shut down operations in the UK by December 2012 if we do not at least see a quarter with a positive operating income,” said Jan Bengtsson, CEO at the firm.
“Unfortunately, the business has not improved and the Board considers it unlikely that there will be profits before the year-end. Therefore, we have now chosen to close down,” he added.
Mr Bengtsson also said that the operating loss in the second quarter of 2012 in the UK will amount to around €222,000 (SEK 2 million), which includes the cost of the closedown.
The firm said in April that overall first-quarter revenue was up by +4% to €41.2 million (SEK365.6 million), compared to €39.5 million (SEK€350.7 million) a year ago. But operating income dropped significantly by -44% to €0.78 million (SEK7.0 million) in the quarter, from €1.42 million (SEK12.6 million) a year ago.
Uniflex is a staffing agency that specialises in industry, warehousing, construction, electricity, customer services, sales, management, cleaning and retail. According to Staffing Industry Analysts’ latest research, Uniflex is the fifth largest staffing firm in the fast-growing Scandinavian market with a 6% market share in Sweden.