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UK – Networkers International reports fall in revenue

19 September 2013

International recruitment company Networkers International PLC (NWKI: AIM) reports revenue of £79.4 million for the six months to 30 June 2013, a fall of -12.4% from revenue of £90.6 million for the same period last year.

Gross profit for the first half of the year was £14.7 million, down by -7.6% from £15.9 million a year ago. Net profit for the period was £1.95 million, a fall of -7.2% from £2.1 million during H1 2012. The Group’s average gross profit margin totalled 18.5% during H1 2013, an improvement on the 17.5% achieved during H1 2012.

During the first half of the year net fee income relating to permanent placements rose to 25.6% from 20% a year ago. In absolute terms, permanent fee income has shown growth of +19.2%, whereas contract net fee income declined by -14.4% during the first half of the year.

Spencer Manuel, CEO of Networkers International, said: “I am satisfied with the progress the Group has made during the period particularly in increasing our permanent placement revenue stream, which now counts for over 25% of our net fee income and the continued expansion of our Energy & Engineering division, which now represents 11% of Group net fee income, up from 6% last year.”

“As outlined in our July trading update, the telecoms market remains flat, albeit with some more positive sentiment in terms of future investment expectations from our key telecoms clients. I am also pleased to report some improvement in market conditions within our UK IT and Energy & Engineering divisions.”

This Group’s Information Technology division is involved in the sourcing, recruitment, and supply of IT personnel across a range of industries both in the UK and globally. This division generates 52% of the Group's revenue, unchanged from last year. Revenue from the IT division fell to £40.97 million, down -12.5% from £46.8 million last year. 

This Telecommunications division is involved in the sourcing, recruitment, and supply of highly skilled telecom engineers to global telecommunication enterprises. This division of the business generates 42% of the Group's revenue, down from 45% last year. Revenue from the Telecommunications fell to £33.5 million from £40.8 million, year-on-year, a drop of -17.9%.

The Energy & Engineering division is involved in the sourcing, recruitment, and supply of Energy & Engineering personnel to a range of global industries. This division of the business generates 6% to the Group's revenue, up from 3% last year. Revenue from the Energy & Engineering division rose +58% to £4.9 million from £3.1 million a year ago.

Europe remains Networkers International’s largest region, despite revenue falling by -16.5%, from £75.3 million during H1 2012 to £62.9 million this year. MENA revenue also declined year-on-year, from £5.5 million last year to £4.4 million this year, a drop of -20%. Asia-Pacific reported revenue of £1.9 million, -29.7% lower than revenue of £2.7 million a year ago.

The only region to report growth was the Americas, where revenue increased by +50.7% from £7.1 million to £10.1 million, year-on-year.  

Mr Manuel concluded: “Whilst it has been a challenging period for the Group, particularly for the telecoms division where we were up against strong comparable figures from H1 last year, there does appear to be an improvement in general market sentiment in our sectors. Whilst the Group’s profits were slightly down on H1 last year, at this stage we remain on track to have a strong finish to the year and to meet management expectations.”

There has been no movement in the company’s share price today, which has a free float of 25.24 million shares. Based on its current share price of £0.41, a rise of +10.86% compared with a year ago, the company has a market value of £33.75 million. 

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