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Staffline Group PLC (STAF: LSE) reported revenue of £416.2 million for the year ending 31 December 2013, an increase of +13.4% compared with £367 million a year ago, though growth was helped by acquisitions made at the end of 2012 and during 2013. The company reported gross profit of £42 million, a year-on-year increase of +21.1% from £34.7 million. Net income for the period was £7.4 million, a rise of +15.6% from £6.4 million in 2012.
Andy Hogarth, Chief Executive of Staffline, commented: “The Group made excellent progress in 2013 during which time we maintained good levels of profit growth, while investing in our future. The core business continues to generate strong levels of interest from both new and existing customers; highlighting both our reputational and operational excellence.”
“Our growth strategy is now well advanced and is due to have a positive impact on the Group in the current year. Looking ahead, we have a clear strategy to grow the Group and remain focused on [the] broadening our service offering, whilst further enhancing shareholder value. The increase in the final dividend demonstrates both our confidence in the business and the future trading prospects of the Group,” he added.
The company’s most profitable business segment remains its Recruitment Services, which reported a +11.5% rise from £353 million in 2012 to £393.6 million this year. The company’s recruitment operations continued to make progress during 2013, despite the UK economy remaining broadly flat. Demand from many individual customers in the run up to Christmas 2013 was subdued, albeit peaking to record levels for the Group as a whole during December.
Following the acquisition of Select Appointments at the end of 2012, Staffline spent the past year improving systems and the operating environment of the company’s franchisees. As part of their growth strategy, the company opened a number of new divisions during the period and the initial start-up costs resulted in a slight reduction in profitability during the period. Staffline fully expects profit growth to return during the 2014 financial year.
In December 2013, the company announced the acquisition of Leicestershire-based specialist recruitment business Magna Recruitment. This acquisition is part of the company’s five-year strategic growth plan aimed at broadening their market reach and increasing the scale of their divisions.
The company’s other segment, Welfare to Work and Training also reported year-on-year growth, rising by +38.1% from £14 million last year to £22.6 million this year. The contract, which is held with HM Government’s Work Programme, has now entered the third year of its five year contract.
The Group both opened and directly invested in a number of new business divisions as part of a new five year growth strategy. This strategy is designed to grow Group revenues to over a billion pounds within five years. Looking forward, the Board remains confident that the current financial year will continue to generate growth for the Group.
Last week, the company was among those named by shadow business secretary, Chuka Umunna, as having been involved in the mis-selling of personal accident insurance to temporary workers prompting Business Secretary, Vince Cable, to say that his department would investigate.
In trading today, the company’s share price rose by +10.9% to £5.45, an increase of +86.4% compared with a year ago. Based on its current share price, the company has a market value of £125.2 million.