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World – Kelly Services expects headwinds as revenue drops -2%

01 February 2013

US recruiter Kelly Services (KELYA:NSQ) is expecting headwinds and mediocre job growth in the months ahead after revenue fell -2% in the fourth quarter to $1.4 billion, the firm reported on Thursday.

Kelly Services is the fifth-largest staffing firm in the world, and similar to rival company ManpowerGroup, the Group was hit by falling client demand and “anaemic” economic growth in the quarter.

Gross profit in the three months to December 2012 fell -1% to $222.2 million. Earnings from operations fell -23% to $9.8 million. Net earnings were down a sharp -63% to $8.9 million amid tight cost controls, following restructuring charges of $1.3 million in the quarter.

CEO, Carl T. Camden, said the quarter had been challenging. But he said the firm could benefit from demand for skilled workers who will remain in short supply this year. “Companies will continue to look for ways to better manage their workforce,” he said, including the services of staffing companies.

In the quarter, total revenue in Europe, Middle East and Africa fell -7% to $264.0 million. Major markets such as France saw revenue plummet by -14% (in constant currency) to $58.8 million while Switzerland saw growth of +1% to $61.2 million. Other countries such as the UK (-14%), Germany (-15%), Norway (-14%) and Portugal (-9%) saw further softening of market conditions as revenue declined during the quarter.

In Asia Pacific, revenues dropped by -11% in constant currency to $100.3 million. In Australia, its largest market in the region, revenue fell -6% to $33.9 million while in Singapore sales improved by +3% to $26.5 million. New Zealand and Malaysia both posted revenue declines of -6% and -1% respectively. In the Americas, revenues rose by +1% to $1.0 billion with the US posting a -1% fall in revenues.

Shares fell -8% to $15.94 in Thursday’s trading session on the New York stock exchange, a -1.4% decline from a year ago and -12% below its 52-week high of $18.09. Based on its market value, Kelly Services is the 20th-largest publicly listed staffing firm. 

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