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UK – Networkers revenue slips, hit by slowdown in telecom sector

15 April 2013

IT recruiter Networkers International (NWKI:LSE) today reported that 2012 full-year revenue slipped -10% to £170.67 million from £189.96 million in the prior year. But gross profit in the year rose by nearly +2% to £30.78 million from £30.31 million.

Networkers is one of the largest IT staffing firms in Europe according to research by Staffing Industry Analysts.

In 2012, profit from operations fell -8% to £5.95 million while profit after tax was down to £3.22 million from £4.23 million, a reduction of -24%.

CEO Spencer Manuel said the firm had started 2013 in line with management expectations. “Despite being in a lower starting position in terms of contractor numbers than this time last year, we have made a solid start to 2013 and we anticipate that the Group is able to grow throughout the current year which will place us in a stronger position as the year progresses and as our comparative numbers become less challenging,” he said.

“Whilst we remain mindful of the fragile global economic environment, there remain a number of opportunities for the Group to benefit from, including building upon the success of our international IT and Energy divisions. Furthermore, there is the pending global investment in 4G networks which should have a positive impact on our telecoms division.”

Although based in the UK, the firm has a strong international presence, deriving over 70% of its gross profit from abroad. But the firm’s telecom division saw softening market conditions during the year. Demand for telecom engineers decreased and, although activities started to pick up again, gross profit from contract placements in this division dropped -4% while permanent placements remained flat.

The company’s IT division saw gross profit rise +4%, helped by strong demand in its specialist technologies unit. But the ‘IT into Banking’ team experienced tougher market conditions in 2012 as gross profit fell -6% year-on-year. Networkers said its international and cross border IT offerings are now starting to gain scale with permanent placements doing particularly well. Overall, permanent IT placements were up +40% on 2011 with contractor gross profit falling -4%.

The energy & engineering business posted a +33% rise in gross profit with the firm expecting strong traditions conditions to continue into 2013. The recruiter focuses on specialist areas within the energy sector, including renewable energy and specific verticals within oil and gas. 

In early trading, the company’s share price was up by +3% to 46 pence, an increase of +12% from a year ago. Based on its stock price, Networkers has a market value of £37.21 million. 


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