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UK – Healthcare Locums needs more funding, trading remains tough

24 January 2013

Health and social care staffing company Healthcare Locums (HLO:LSE) suffered difficult trading conditions in the UK and Australia last year and expects market uncertainty to continue into 2013, the firm said in a message to shareholders on Wednesday.

HCL is now exploring options to protect its business strategy to cut costs and improve profitability. The firm needs additional funding and has approached two substantial shareholders to provide extra capital.

But investors were not reassured by the news as the company’s stock price dropped to a new 52-week low of 0.50 pence in Wednesday’s trading session.

The firm said its UK business slowed in 2012 because of delays in NHS framework renewals, depressing performance in its doctors and allied health professional divisions. The social care division remained under margin pressure due to public sector cuts.

In Australia, demand for healthcare staff has fallen in both the private and public sectors due to worsening economic conditions. The firm made changes to senior management in the country, but “the current uncertainties in demand make Australia a challenging market”, HCL said.

The staffing company also confirmed its continued involvement in two legal proceedings, one in the US. The other case involves former executive vice chairman Kate Bleasdale who had brought an unfair dismissal claim against the firm, a case she lost last year. Ms Bleasdale has since appealed against the ruling, but was initially rejected. She has now requested a further hearing.

The firm did not provide any specifics on its 2012 financial performance. Back in August 2012, it reported “disappointing” half-year results with UK gross profit not meeting expectations. 

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