Australian recruitment firm Ignite (IGN:ASX) reported revenue decreased by 6.2% in the six months ended 31 December 2022 to AUD 55.7 million (USD 37.45 million).

The decrease in revenue was due to a continued focus in the Specialist Recruitment segment on higher margin placements, rather than on high volume, low margin placements as well as a significant reduction in the contribution of Managed Services. The improvement in gross margin is due to a focus of increasing the average margin for new contingent labour placements. The overall increase in total gross margin and gross margin percentage was impacted by the decrease in the relative contribution of the higher margin Managed Services business.

The group is organised around three operating segments across two geographic regions, which are all labour related. These segments are Specialist Recruitment, On Demand IT Services and Technology & Talent Solutions in Australia and New Zealand.

Looking ahead, the group said steps taken to reduce the cost base and continued focus on gross margin percentage will deliver a ‘significant net profit improvement’ in the final quarter of this financial year and into FY24.

Ignite last trade on Thursday when shares closed at AUD 0.08 (USD 0.05), 31.15% above the 52-week low of AUD 0.061 (USD 0.04) set on 10 November 2022 and no change on the day. The company has a market cap of AUD 7.17 million (USD 4.81 million).