GO2 People (GO2: ASX), a provider of vertically integrated recruitment and building services throughout Australia and New Zealand, published an update today for the first quarter ended 30 September 2022.

The business reported continued momentum across its various service offerings in the quarter with another record quarter of cash receipts from customers at AUD 21.63 million (USD 13.87 million), equating to an annualised run rate of AUD 86.5 million. This has grown from an annualised run rate of AUD 77.5 million in Q1 FY2022, the first full quarter of revenue incorporating both Hunter Executive and Skill Hire.

The group said the recruitment division performed strongly, with significant momentum building towards the back end of the quarter. This momentum is being achieved across all of recruitment’s three operating states of Western Australia, South Australia and Queensland, the group added.

Within the Advanced Traffic Management division, the group said contract revenue reached its targeted AUD 22 million (USD 14.1 million) per annum run rate towards the end of September. The Traffic Management division is expected to continue growing strongly into the busy Christmas/New Year period, with several additional orders already in hand.

During the quarter, the group’s Workforce Development Division started servicing its new contracts for the federal government’s Department of Employment and Workforce Relations (DEWR). Transition to Work, Career Transition Assistance and Employability Skills Training contracts commenced on 1 July 2022.

For the Apprentice and Training businesses, strong demand in the division did not translate to improved results this quarter. The number of apprentices on-hired through the group training Organisation remained static in the quarter, and challenges in securing sufficient training resources hindered the company’s ability to capitalise on demand.

Within the White-Collar recruitment division, Hunter Executive continued to perform well in the quarter, and in late September secured a significant opportunity with a large federal government department for executive search and board recruitment. GO2People said this win will now underpin Hunter’s national growth and expansion, which will have a positive impact on revenue and margins.

“Whilst significant progress and new client wins were achieved in the quarter which have started flowing into revenue and cash collections, the group remains focused on overall margin improvement, the generation of EBITDA and a strong positive cashflow,” the group stated. “The client wins and margin improvements outlined above are expected to start flowing into improved operating results in Q2 FY2023, and the group is working on a number of other significant initiatives which, if successful, will also contribute materially to revenue, margins, EBITDA and cashflow.”

GO2 Board Chair Darren Cooper said, “Once again, we have had another quarter of pleasing progress, with continued revenue growth translating into record cash receipts, and the retention of our main labour hire client in Queensland on a fresh 4-year term and with significantly improved margins being particularly notable. That margin improvement, along with a number of other recently renegotiated client terms, will start to flow into the numbers in the December quarter.”

GO2 People shares last traded on Wednesday. The market has not yet reacted to the group’s results. The company last traded at AUD 0.013 (USD 0.0083), 30.00% above the 52 week low of 0.01 set on 1 August 2022. The company has a market cap of AUD 5.29 million (USD 3.39 million).