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Recruitment and conferencing provider RTC Group (RTC: LSE) reported revenue of £23.4 million during the first half of 2013, up +14.4% compared with £20.45 million a year ago. Net income for the period was only £5,000, a significant decline from £201,000 during the same period last year.
Gross profit for the first half of the year was £2.47 million, down from £2.57 million for the same period last year. Operating profit also fell from £262 million a year ago to £66 million in the past half year.
The decline in net profit is attributed to the implementation of staffing and structural changes in the ATA Recruitment UK division. Implementation of an enlarged middle management team in ATA Recruitment involved the replacement of high performing consultants with new intake, and as a result reduced the performance of the division in the last six months.
Bill Douie, chairman of RTC Group, commented: "During the six months ended 30 June 2013, we have taken the opportunity to establish, by internal promotion, an enlarged and enhanced quality middle management team in the ATA Recruitment UK division in order to permit future expansion in staff numbers and business volumes. This has involved the replacement of high performing consultants with new intake and has, as expected, reduced the performance in this division in the six months to 30 June 2013. Accordingly, Group profits in the period are modest at GBP5k as we build for the future.”
Looking forward, Mr Douie commented: “The staffing and structural changes in the ATA Recruitment UK division have settled in well and give the directors confidence that a much improved performance for the six months to 31 December 2013 can be achieved. Coupled with solid progress at Global Staffing Solutions Limited and continuing growth at Ganymede Solutions Limited, we remain confident that for the year as a whole, the Company will perform in line with market expectations".
In early trading the company’s share price dropped -9.38% to £14.50, an increase of +107% compared with a year ago. Based on its share price, the company has a current market value of £1.3 million.