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Sweden – Profits down at Uniflex

20 April 2012

The Sweden-based staffing Group, Uniflex AB (UFLXB: STO), increased sales in the first quarter of 2012 by +4% to €41.2 million (SEK365.6 million), compared to €39.5 million (SEK€350.7 million) a year ago.

But operating income dropped significantly by -44% to €0.78 million (SEK7.0 million) in the quarter, from €1.42 million (SEK12.6 million) a year ago. This resulted in a lower operating margin of 1.9%, which is a reduction of -1.7% year-on-year. Over the past five years, the operating margin at Uniflex has averaged 4.5% and the current margin is well below this.

Profit after tax more than halved to €0.49 (SEK4.4 million), down from €1.0 million (SEK9.1 million) in 2011.

Uniflex has a heavy presence across the Scandinavian staffing market and Sweden is the firm’s largest division. Turnover during the first quarter there increased by +2% although the staffing company experienced weaker demand at the beginning of the year. Swedish business activities contributed €39.6 million (SEK351.2 million) of the total turnover, which is up from €39.0 million (SEK346.0 million) a year ago.

The firm said that it was progressing “according to plan” in Norway, where turnover has surged by over +250% when compared to a year ago.

But things were looking meagre in the UK as financial results there remained in the minus. The firm announced that it will exit the UK market if it does not achieve positive operating results by the end of the year.

Revenues in the Finland division were also lower than expected but the firm remained positive that revenues will increase in the future.

Jan Bengtsson, CEO at Uniflex, said that the company continues to make profits despite the difficult economic climate. “In Sweden we are performing with an operating margin of 2.7% which is pretty normal for Uniflex during the first quarter.” He also said that the firm has been careful with its expenses as there has been weaker demand in the period.

Talking about the Norwegian business, Mr Bengtsson added that “In Norway we are ahead of the competition.” Although the company was reporting an operating loss there, this was mainly due to investments aiming to increases sales in the region.

Uniflex is a staffing agency that specialises in industry, warehousing, construction, electricity, customer services, sales, management, cleaning and retail. According to Staffing Industry Analysts’ latest research, Uniflex is the fifth largest staffing firm in the fast-growing Scandinavian market with a 6% market share in Sweden.

In early trading this morning, Uniflex shares were down slightly by -0.26% to SEK8.50 which is down -18.60% from a year ago but +36.52% above the 52-week low of SEK28.20 set on 9 August 2011. The company is valued at €58.18 million.

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