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UK – Norman Broadbent grows overseas while UK revenue stumbles

26 September 2013

International executive recruitment firm Norman Broadbent (NBB: LSE) reported revenue of £4 million for the first six months of 2013, on par with revenue reported for the same period a year ago. Gross profit for the period fell slightly by -5.2%, to £3.7 million from £3.9 million, year-on-year.

The Group reported an operating loss of £221,000 during H1 2013, a substantial drop from an operating profit of £66,000 a year ago.

Peirce Casey, Executive Chairman of Norman Broadbent, commented: “It is encouraging to note that market sentiment and activity has improved in all areas of our diverse suite of human capital offerings. And that the timing of our recent entry into a specialist segment of contingent recruitment and into social media recruitment and consulting looks opportune and has created a strong platform for growth across the Group.”

Segmentally, the Group’s Executive Search division was responsible for the biggest proportion of company revenue. During the first half of 2013 the Executive Search division’s revenue was £3.15 million, down -12.5% from revenue of £3.6 million a year ago. 

The Overseas Royalty division also reported lower revenue, year-on-year, of £126,000, a drop of -33.3% from revenue of £189,000 last year. The Assessment, Coaching & Talent Management division was the only division to report increased revenue, year-on-year. During the first half of the year revenue more than doubled to £573,000 from £252,000 a year ago, an increase of +127%. 

The company’s newest divisions, Contingent Recruitment and Social Media Search & Consulting reported revenue of £18,000 and £144,000, respectively.

Group revenue is mostly derived from the United Kingdom, with revenue of £3.3 million accounting for 82% of total revenue. Revenue from the UK fell by -9.4% from £3.6 million a year ago. Revenue from the Executive Search division in the UK declined by -14% to £2.9 million from £3.4 million. 

European revenue for the period was £489,000, an increase of +81.8% from £269,000 last year. Revenue from outside Europe also grew, year-on-year, increasing by +94.5% to £232,000 from £119,000 a year ago.

The wholly owned overseas search offices in Los Angeles, Paris and Singapore, all start-ups in the last 12 months, according to Norman Broadbent should, collectively, contribute modest profits in the second half of the year. Licenced overseas search has a mixed outlook; remaining resilient in Spain and Latin America, whilst the Middle East and Italy were both softer. The Group’s acquired leadership assessment business in Belgium is reportedly performing well and provides a good platform for growth into neighbouring countries.  

Looking forward Pierce Casey added: “We continue to review potential new opportunities in the human capital sector both in the UK and overseas, and our flexible approach and ability to partner with strong entrepreneurs should give us an edge in continuing to grow the Group in scale. The Board is optimistic moving forward.”

In trading today, the company’s share price fell -3.1% to £0.48, an increase of +31.9% compared with a year ago. Based on its share price, the company has a current market value of £6.39 million.  

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