Australian recruitment firm Ignite (IGN:ASX) reported revenue on Friday of AUD 26.3 million (USD 16.5 million) for the first quarter ended 30 September 2023, down 9% compared to the same period last year, according to the company’s quarterly activity report.

Gross profit of AUD 3.03 million (USD 1.90 million) is down 11% on the comparative quarter the year prior as Specialist Recruitment, contingent labour hire gross margin decreased by 5% due to the continued focus on lower volume, high margin engagements that has seen a 20% increase in average gross margin per contractor versus the comparative quarter.

When compared to Q4 2023, contingent labour hire gross margin increased by 12%. Managed Services gross margin decreased by 62% (and 40% compared to Q4 2023) due to the expiration of several high margin projects that were present in the comparative quarter.

Gross profit margin was 11.5%, down from 11.9% for the comparative quarter in FY23, largely due to the decline in the proportion of profit contribution of higher margin Managed Services and Permanent Revenue. Contingent labour hire represented 88% of the group’s gross margin in the current quarter, compared to 77% in the comparative quarter the year prior.

EBITDA stood at AUD 305k (USD 192k), up 173% over the year. Net profit after tax totalled AUD 140k (USD 65k), up 123% over the year.

Meanwhile, the group’s active contractors as of 30 September 2023 decreased by 155 (21%) to 579 compared to the comparative quarter the year prior, with Managed Services responsible for 53 of this decrease and Business Support reporting a further reduction of 79 contractors. Active contractors reduced by 77 (12%) compared to Q4 2023 where there were 656 active contractors, with Managed Services responsible for 28 of this decrease.

Cash receipts from customers of AUD 28.2 million (USD 17.7 million) decreased by 8% compared to the comparative quarter the year prior and decreased by 6% compared to Q4 2023. Meanwhile, payments for contingent labour of AUD 23.3 million (USD 14.6 million) decreased by 10% relative to the comparative year quarter and decreased by 5% compared to Q4.

Ignite shares last traded on 16 October at AUD 0.05 (USD 0.03). The company has a market cap of AUD 4.57 million (USD 2.87 million).