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Australia – Ambition performs well in Asia but struggles at home and in UK

28 August 2013

Australia-based boutique recruitment business Ambition Group (AMB: AU) reported half year revenue of AUD 40.4 million (USD 36.3 million) for the period ending 30 June 2013. This represents a fall of -9% compared with revenue of AUD 44.4 million (USD 39.8 million) for the same period last year.

Gross profit also fell, from AUD 20.1 million (USD 18 million) during H1 2012 to AUD 19 million (USD 17 million) for H1 2013, a fall of -5%. Restructuring costs amounted to AUD 500,000 (USD 448,705) compared with AUD 100,000 (USD 89,741) last year. Ambition reported an operating loss of AUD 400,000 (USD 358,964), compared with operating profit of AUD 500,000 (USD 448,705) a year ago.

Guy Day, CEO of Ambition Group, commented: “Ambition experienced varying conditions in its respective markets of Australia, Hong Kong, Singapore, and the United Kingdom. Our Asian Business continued to make good progress. Whilst the challenging trading conditions in Australia and the United Kingdom persisted. The Directors made significant progress restructuring and repositioning the business in those locations.” 

“To address the market environment, our company structure has been refined and headcount reductions implemented that we anticipate will deliver annualised employment cost savings in excess of AUD 1 million (USD 897,410). Reductions to the senior management team have been made and a new Chief Financial Officer will be appointed with an expanded remit,” he added.

In Australia. Ambition’s largest market, revenues declined -11% compared with a year ago, falling to AUD 28.2 million (USD 25.3 million) from AUD 31.6 million (USD 32.4 million) contributing to a material reduction in operating profit of AUD 174,000 (USD 156,149). Despite no significant exposure to the mining and resources sectors, the slowdown in this sector compounded weakening hiring sentiment and wider economic confidence remains at its lowest level for many years. In early June, the company responded to disappointing monthly financial results by reducing employee headcount by -10%, principally across the senior management and non-fee generating staff.

Asia is the group’s strategic growth priority and good progress was made in the period. Revenues increased by +37% to AUD 5.6 million (USD 5 million) from AUD 4.1 million (USD 3.7 million) and operating profits more than doubled to AUD 756,000 (USD 678,422) compared with a year ago. Hong Kong and Singapore are highly competitive markets, but the company is confident that further opportunities exist and plan to continue investing in both offices. Consultant headcount for the region increased +30% during the year. In July, the board approved the establishment of an office In Kuala Lumpur and trading is expected to begin at the end of the year.

The UK reported an operating loss of AUD 167,000 (USD 149,867) for the period, with total costs in London reduced by -20% compared with a year ago. Revenue for the period fell to AUD 6.6 million (USD 5.9 million) from AUD 8.7 million (USD 7.8 million) a year ago. The company suggests there is some evidence pointing to ‘green shoots’ of recovering in the UK, especially in certain segments of professional services. However, the overall economic sentiment remains relatively fragile and the company anticipates trading conditions to remain challenging. 


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