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Australia – Rubicor struggles in difficult market

29 August 2013

Rubicor (RUB: ASX) reported revenue of AUD 237.7 million (USD 212.4 million) for the full year ending 30 June 2013, compared with AUD 290.5 million (USD 259.6 million) for the same period last year, a drop of -18.2%. An operating of AUD 23.9 million (USD 21.4 million) was reported for the year, an improvement from an operating loss of AUD 61.1 million (USD 54.6 million) in 2012.

Mr Kevin Levine, CEO of Rubicor, commented, “Today’s result demonstrates that our business continues to operate within a challenging market, evidenced by our reduced year-on-year revenues.  Business confidence and sentiment remains weak and progressively worsened, particularly after Q1.  Coupled with inactivity across the government sector in anticipation of the upcoming federal election and the fall of investment across the resources sector, has had and continues to have an adverse effect on hiring activity, directly impacting our NDR and earnings.”

He continued: “Performance levels across the Group were down in the second half of the year, in line with reduced market activity. While we did recognise improved productivity from our consultants, the impact was neutralised due to a decline in our overall headcount. Despite reduced consultant numbers, permanent and contracting volumes stabilised through H2. Positively, we successfully re-signed all our key high volume accounts that were up for review during the period. This did result in some margin reduction, however; it provides ongoing stability and underpins the strength of our contractor revenue base.”

Rubicor, one of Australia’s largest staffing firms, has restructured its offices, reducing the number of offices from 23 to 17. Further office consolidation and rental savings have been identified for 2014. In recent months, significant investments have been made to grow operations in Singapore. Expansion into Asia remains a priority for Rubicor moving forward. 

Mr Levine added; “Our Group has been constrained for a considerable period of time by the significant level of debt we were operating under. This was a clear distraction for the business, management and staff, and we were unable to invest in growing consultant headcount and pursue or invest in potential growth opportunities.”

Looking forward, Rubicor anticipates that difficult market condition will continue, with soft demand persisting throughout 2014. 

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