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Revenues were up by +45% from 83.4 million Pounds in H1 2010 to 120.9 million Pounds in H1 2011 at Staffline Group Plc (STAF:LSE), the recruitment and outsourced HR services provider to industry.
Interim results for the six months ended 30 June 2011 reveal that gross profit was up by +53% from 9.4 million Pounds in H1 2010 to 14.3 million Pounds in H1 2011.
Operating profit was up by +38% from 2.1 million Pounds in H1 2010 to 3 million Pounds in H1 2011. Profit before tax was up by +38% from 2.1 million Pounds in H1 2010 to 2.9 million Pounds in H1 2011.
On 4 January 2011 the company acquired the trade and assets of Kelburn Industrial Limited, based in Newcastle and on 14 March 2011 the company acquired Ethos Recruitment Limited, based in Daventry. The organisations will add, in aggregate, around 6 million Pounds in a full year to the group's revenues and are expected to make a positive contribution to profitability in 2011. They have been acquired with small upfront payments and profit related payments over the next 18 months.
On 21 April 2011 the company acquired Fourstar Group Limited from the Dutch company Lern Holding B.V, a company registered in the Netherlands, for 3 million Pounds in cash, plus a deferred payment of 300,000 Pounds, satisfied from the group's existing cash resources. Fourstar was an incumbent provider of the Flexible New Deal Programme and has secured the Work Programme contract for the West Midlands. Fourstar is paid for finding work for those claiming Job Seeker Allowance and Incapacity Benefit and keeping them in work.
The acquisition is expected to generate circa 90 million Pounds of revenue over the next five years, be earnings neutral in the first full year of ownership and earnings enhancing thereafter. On 20 June 2011 Fourstar changed its name to EOS Works Limited.
On 22 July 2011 certain trade and assets of Arnashade Recruitment Limited were acquired from the receivers for a cash payment.
These new acquisitions contributed to 30% of Staffline’s revenue growth and the average number of employees increased by 128 to 397 compared to the same period in 2010 of which, around half was due to the acquisitions made in the first half.
John Crabtree, Chairman, commented "I was appointed Chairman of the Staffline Group on 19 May 2011 so it is with great pleasure that I write my first statement."
"The group has continued to thrive in what remains a challenging environment, one which has seen mixed trading conditions for a number of our customers. Although growth in this period has slowed compared to the previous period, our performance continues to outstrip many of our peers with revenues for the six months up by +45% to 120.9 million Pounds and profit before tax up +38% to 2.9 million Pounds. This performance continues to highlight the stable nature of our business and the long term confidence many of our customers have in our services."
"The shape and size of the group continues to evolve with the number of OnSites growing by +6 to 141 during the six-month period and the acquisition of EOS taking us into the Welfare to Work arena where we believe good long-term growth is achievable."
"I fully expect us to have further opportunities to expand our business through both organic growth and additional selective bolt-on acquisitions. We remain keen to explore possible initiatives that complement our OnSite model and will continue to evaluate additional opportunities that exist in training and Welfare to Work programmes."
"I am delighted with the progress of the group, which continues to benefit from opportunities that exist around our outsourced model. We continue to develop strong relationships across our customer base, providing both service continuity and excellent revenue visibility. We look forward to the remainder of the current financial year with confidence."
In a rather more cautious trading statement, the Company said that “Trading conditions look set to toughen for the remainder of 2011 with margins remaining under pressure, however our business continues to perform in-line with our expectations”.
In early trading Staffline's shares were down by -5.82% to 223.20 Pence.