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Australian recruiter Clarius Group (CND: ASX) reported a -17.6% drop in revenue for the full year 2013, falling to AUD 225 million (USD 204.3 million) from AUD 273 million (USD 2.47.9 million) last year. Group operating loss after tax for the period was AUD 900,000 (USD 817,227), accurately predicted by the company in June.
The 2013 financial year continued to present challenges to the recruitment market as evidenced by the fall in revenue of AUD 48 million (USD 43.6 million) with a reduction in the Group’s overall gross margin from 16.9% to 16.6%.
Kym Quick, managing director of Clarius Group, commented: “Our client retention over the year was good. We managed to not only retain all of the major clients we’ve had longer term relationships with, but also to win significant new accounts. We believe this means the opportunities for us are a little better than they’ve been over the last couple of years. Having said that, the bigger organisations we’re working with aren’t actively hiring extensively at the moment, however once conditions improve, our growth will escalate alongside that.”
Over the course of the year job advertisements continued to fall and the demand for permanent recruitment remained weak. The Group’s mix of temporary and permanent business changed during the period with permanent recruitment accounting for 30.6% of revenue, compared with 25% a year ago.
The Group’s Asian recruitment business has performed well, particularly the operations in Greater China. Operations in Hong Kong were closed in October 2012 in response to difficult market conditions. Singapore’s permanent and contract business continues to perform in line with management expectations.
Restructuring undertaken during 2013 is expected to generate annualised savings of AUD 6.5 million (USD 5.9 million). The company invested AUD 3 million (USD 2.7 million) increasing headcount in China as a result of growth in the regional market; however reductions were made in areas with weaker market conditions.
Kym Quick commented: “We’ve done a substantial amount of restructuring of the business which has allowed us to take significant costs out, particularly salary costs, and this will stand us in good stead if conditions don’t improve.”
Looking forward, the Group is confident that it is well positioned to continue to manage through the current economic cycle. The Group’s cost base and resourcing levels will continue to be optimised so as to ensure strong profit conversion on any uptick in markets.