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UK – Empresaria revenue down but profits improve

06 September 2012

UK staffing specialist Empresaria (EMR:LSE) felt the bite of the European debt crisis in the first six months of the year as revenue dropped by -4% to £97.8 million, the recruiter reported on Thursday.

The temporary staffing business saw a -5% decline in revenue although the temporary margin improved by +0.1% to 16.6%. The permanent business fared better, seeing a revenue increase of +13%.

Despite the overall fall in revenue, profits improved in the period. Gross profit increased +1% to £22.4 million. Operating profit was £1.8 million, seeing a recovery from last year’s operating loss of £1.4 million. Profit after tax was £0.9 million against a loss of £1.6 million seen at the same time last year.

“The UK performance was stable overall and we have seen some particularly strong performances within the Asian region. In Europe operating profit increased against last year, although revenue declined,” said chief executive Joost Kreulen.

Looking ahead, Mr Kreulen expects improved performance this year with profits slightly ahead of last year.

The firm’s financial performance across the globe was mixed during the first half of 2012.

In the UK, revenue was up +4% to £33.7 million while gross profit increased by +1% to £7.9 million.  Permanent recruitment revenues were flat but the temporary staffing business drove UK revenue, helped by a strong performance in the construction sector. The banking and financial services industry suffered from “significant declines” and dragged down profits in the region.  

In Continental Europe revenue in the period fell by -14% to £43.3 million and gross profit declined by -6% to £8.5 million.  Adjusted operating profit improved to £0.2 million, mainly due to cost saving measures.

The firm saw lower numbers of temporary workers in Europe although there are now some signs of improvement, the company said. The temporary margin for the first half was up +0.5%. In Germany, a restructuring project is likely to impact short-term profits negatively. Collective agreements in the country are also increasing pay rates and the firm expecting lower full-year profits there.

In the Baltic region, the healthcare business saw an increase in gross profit while the specialist businesses in the Czech Republic and Slovakia turned around operating losses from 2011 into a break-even position this year.

In the Rest of the World, revenue in the period increased by +11% to £20.8 million and gross profit was up +11% to £6.0 million. The firm saw a decline in adjusted operating profit of -17%.  The Asia Pacific region performed strongly, with revenue growing +17%. In Japan profits improved while business across South-East Asia has seen further growth in Indonesia, Thailand and the Philippines.  In Chile, the firm exited a major contract leading to transitional losses in the first half. 

Empresaria is among the top 50 staffing firms in the UK. The agency provides recruitment and HR related services, including temporary and permanent recruitment, recruitment process outsourcing, HR consulting and corporate training.

In early trading this morning, the company’s share price was flat at 25 pence, down -28.6% from a year ago and +47.1% above the 52-week low of 17 pence seen in December 2011. The firm has a market capitalisation of £11.14 million, making it the 82th largest staffing firm in the world based on market value.  


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