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Rubicor (ASX:RUB), one of Australia’s largest staffing firms, said the recruitment market remained challenging with the company expecting a significant drop in profits this year, following tough trading seen in previous months.
The firm provided a market update for the full year ending 30 June 2013, saying lower business confidence had impacted hiring activities. Profits could drop as much as -76% year-on-year in 2013, the firm said.
“In view of continued tough trading conditions across a broad range of industries and sectors, which have negatively impacted hiring intentions, the Board has issued guidance for Statutory EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)] before abnormals for the full year ending June 30, 2013 and expects it to be in the range of AUD 1.6 million (USD 1.7 million( to AUD 2.1 million (USD 2.2 million(. This compares to AUD 6.8 million (USD 7.0 million) for the previous financial year,” the firm said.
The recruiter based its guidance on actual results up to March 2013 and forecast results for the final quarter. It does not expect significant changes in market conditions for the remainder of its financial year.
The firm is also in the middle of restructuring debt facilities. “Negotiations between Rubicor Group Limited and its bank in connection with an agreed framework for restructure of outstanding debt facilities are progressing. Whilst these negotiations continue, there is no certainty as to the form and terms of any definitive transaction as there is no certainty that any such transaction will complete,” Rubicor said.
In the six-month period to December 2012, the firm posted a -15% decline in revenue which dropped to USD 130.7 million (AUD 126.5 million). The company also reported a net loss of USD 12.6 million (AUD 12.2 million). Rubicor CEO, Kevin Levine, blamed economic uncertainty for a decline across recruitment markets in Australia, New Zealand and Singapore.
Shareholders were unimpressed with the company’s stock price today falling by -11% to AUD 0.008, down -70% from a year ago. The firm has a current market value of USD 1.0 million (AUD 995,650).