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Sweden – Wise Group’s strong Q4 unable to offset weak year

21 February 2014

Swedish staffing firm Wise Group AB (WISE: SS) reported revenue for the fourth quarter ending 31 December 2013 of SEK 133.7 million (€14.9 million), an increase of +4.4% compared with SEK 128.1 million (€13.6 million) for the same period last year.

Wise Group reported an operating provide of SEK 8.3 million (€926,370), a fall of -26.6% from SEK 11.3 million (€1.3 million) in Q4 2012. The company achieved a net income of SEK 5.4 million (€602,699), a fall of -25% from SEK 7.2 million (€803,598) a year ago.

On an annual basis, the company reported revenue for 2013 of SEK 468.7 million (€52.3 million), a year-on-year increase of +3.8% from SEK 451.6 million (€50.4 million) in 2012. Wise Group achieved an operating profit of SEK 10.9 million (€1.2 million), a fall of -66.3% from SEK 32.3 million (€3.6 million) in 2012. Net income for the period fell by -64.4% to SEK 7.7 million (€859,404), down from SEK 21.6 million (€2.4 million) a year ago.

Roland Gustavsson, CEO of Wise Group, commented: “Our fourth quarter developed well, with growth of +4% over the previous year and an operating profit of SEK 8.3 million (€926,370), which was in line with the previous year. In the fourth quarter, the new recruiters we have taken on during the year began to have an impact. We believe that our strategy to retain all of our employees and continue to recruit for ourselves, despite reduced demand and lower profitability in the first half, was absolutely right.”

“Therefore we ended 2013 on a positive note, even though, as a whole, the year was slightly worse than expected. It was mainly the recruitment segments that was worst affected. Despite a very good effort by all of our employees, even Wise Group couldn’t avoid being affected as demand for recruitment services, according to the Staffing Indicator, fell by -16% during the first three months of the year compared with 2012. Our HR Services segment performed well, particularly in terms of profitability, while the consultant recruitment division grew in terms of sales but with a slightly weaker margin.”

Wise Group’s largest business segment remains its consultant recruitment service, which reported revenue during the fourth quarter of SEK 54.1 million (€6 million), a year on year increase of +5% compared with SEK 51.5 million (€5.7 million) in Q4 2012.

The company’s recruitment services business reported revenue growth of +13.3% to SEK 26.5 million (€3 million), up from SEK 23.3 million (€2.6 million) a year ago.

Revenue derived from HR Services faltered slightly, dropping from SEK 53.3 million (€5.95 million) in Q4 2012 to SEK 53.1 million (€5.92 million) in Q4 2013, a year-on-year drop of -0.4%.

Looking forward, Mr Gustavsson is optimistic about the coming year: “With a final strong fourth quarter as a starting point, I see a bright 2014. I am convinced that it will be a good year for the Wise Group.”

In trading today, the company’s share price remained unchanged at SEK 1.28 (€0.14), a fall of -13.1% compared with a year ago. Based on its current share price, the company has a market value of SEK 191.8 million (€21.4 million).    


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