Japanese staffing giant Persol (2181: JP) reported revenue today for the nine months ended 31 December 2020 of JPY 780.19 billion (USD 6.77 billion), an uptick of 10.8% when compared to the previous period.

The group said the business performance of the Staffing SBU (Strategic Business Unit), which is the core business, remained strong, and that of Career SBU also recovered steadily. Sales in other SBUs also increased.

Operating profit improved because of growth of the BPO (business process outsourcing) sector in Staffing SBU, progress in recovery of sales in the profitable Career SBU, which is attributed to demand recovering from the effect of Covid-19, as well as an increase in profits or a reduction of losses in all SBUs.

In the Staffing SBU, the group operates businesses such as temporary staffing, including mainly clerical and administrative staff dispatching and a wide range of staffing services, BPO, placement service mainly for administrative talent in Japan. Staffing Revenue for the nine months stood at JPY 426.08 billion (USD 3.70 billion), increasing 8.0% over the year.

Revenue in the temporary staffing sector increased due primarily to a year-on-year increase in the number of active temporary workers. Sales in the BPO sector increased because orders received remained strong, mainly in public-related projects.

In the Career SBU, the group mainly operates placement businesses, supporting corporate clients' mid-career hiring activities, and job recruitment media business. Sales for the period stood at JPY 53.64 billion (USD 465.7 million), increasing 23.9%. Sales in the placement business and job recruitment media business increased due to stronger sales promotion activities in addition to a recovery in demand for hiring among companies.

In the Professional Outsourcing SBU, the group operates a manufacturing and development outsourcing business in the IT and engineering areas and temporary staffing business specialised in engineer dispatching. Sales for the period were JPY 88.57 billion (USD 769.0 million), increasing 7.5%.

In the Solution SBU, the group provides digital solution services mainly for hiring talent and managing human resources and creates new businesses through incubation programs. Sales were USD 7.92 billion (USD 68.7 million), increasing 109.3%. Revenue significantly increased due to the continued growth of the career change application business and cloud POS business (cloud-based point of sale, an online software) mainly reflecting the recovery in companies’ demand for hiring and the effect of sales promotion activities.

In the Asia Pacific segment, the group operates temporary staffing and placement businesses in Asia as well as a staffing and maintenance business in Australia. These businesses are operated mainly under the PersolKelly brand in Asia and the Programmed brand in Australia. Sales were JPY 212.68 billion (USD 1.84 billion), increasing 13.9%. Sales increased due to progress in the recovery from the impact of Covid-19, continued strong sales in Singapore as the main market, and growth in sales of the placement business mainly in China, in addition to the effect of the stronger Australian dollar.

Persol announced that it will additionally acquire 46.5% of the 49% of shares in PersolKelly Pte. Ltd., which are held by Kelly Services Inc. This will substantially increase the equity stake in PersolKelly to 97.5%.

Kelly Services will continue to hold a 2.5% stake to maintain its relationships with major global companies that have signed contracts with KSI. Persol will apply cash on hand to the additional acquisition and the deal is planned to be completed on 1 March 2022. Even after the additional acquisition of the shares, the framework for collaboration with KSI will be maintained, and the service brand name, PersolKelly, will continue to be used. The group also announced that it will call off its cross-shareholding with KSI and dissolve the capital alliance with the company.

All of the shares in Persol held by KSI are planned to be sold in the market on and after 14 February 2022, Japan time. For the shares in KSI that Persol holds, the group has signed an acceptance agreement with KSI relating to the acquisition of treasury shares on 14 February 2022. Even after the dissolution of the capital alliance, Persol said it will maintain the friendly business alliance with KSI.

Furthermore, Persol states that the impact of the dissolution on its consolidated financial results for the current fiscal year will be minor.

Separately today, Kelly Services reported revenue of USD 1.25 billion, up 1.1% in constant currency.

Shares in Persol Holdings closed at JPY 3,040.00 (USD 26.39), down 2.72% on the day and 17.50% below its 52-week high of JPY 3,685.00 (USD 31.99) set on 19 November 2021. The company has a market cap of JPY 739.70 billion (USD 6.42 billion).