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The troubled recruitment agency Healthcare Locums (HLO:LSE) reported “disappointing” half-year results with UK gross profit not meeting management’s expectations, the firm said in a trading update today. Due to weaker trading, it expects a negative half-year adjusted EBITDA (earnings before depreciation, amortisation, interest and tax and before highlighted operating costs and share based charges or credits).
This comes after the firm said last month that court proceedings in the US, filed by various hedge fund investors, have started again over alleged misrepresentation of the company’s profitability and accounting practices. In a high-profile case earlier this year, the staffing firm won an unfair dismissal case against the company’s founder.
The healthcare staffing provider is still restructuring its UK operations and said that this year’s UK growth rate is likely to be affected by unexpected delays in the tendering processes of several National Health Service (NHS) procurement frameworks, which impact HCL supply agreements. Therefore UK gross profit in the first six months of the year has not met expectations.
In Australia, trading in May and June have been “disappointing” for the nursing agency and is also below expectations. However, the firm is expecting better market conditions in the second half of the year due to the seasonally busier summer months.
Looking ahead the firm said that “despite the disappointing trading in the first half, the Board remains confident that HCL is well placed to increase its share of NHS framework business and the increased cost it has put into Australia will begin to reap its reward.”
Healthcare Locums was formed in 2003, providing workforce solutions to the health and social care industries. The firm supplies temporary and permanent doctors, nurses, allied health professionals and qualified social workers to public and private sector clients in the UK and internationally.
In early trading this morning, the company’s share price dropped by -7.9% to 2.05 pence, down a staggering -97.6% from a year ago and +0.6% above the 52-week low of 1.57 pence seen in April 2012. The firm has a market value of £18.86 million.