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Americas fraud drags down Dutch firm’s earnings

March 01 2013

Dutch recruiter Brunel International reported today it discovered revenue and cost structure overstatements in the Americas that resulted in a €9.7 million (US$12.8 million) charge in the fourth-quarter. The staffing firm reported revenue of  €312 million in the quarter, up 7 percent from €291.0 million in the year-ago quarter.

Jan Arie van Barneveld, CEO of Brunel International, said one employee inflated revenue to make margins look better, Reuters reported. Revenue was manipulated for operations in the United States, Canada, South America, Chad and Angola, he said.

Due to the resulting charge, EBIT was €8.7 million, down from €20.1 million year over year. Gross profit fell 9 percent to €50.2 million from €55.1 million, while gross margin fell to 16.1 percent from 18.9 percent.

“Brunel experienced a difficult quarter as a result of control issues and incidental costs,” van Barneveld said.  “For me this is a disappointment. At the same time the business and the underlying trend of both revenue and profitability remained very good. There has been slight growth in the Netherlands. Our business in Germany and other European countries continued to grow strongly.

Still, full-year revenue rose 26. Percent to €1.23 billion (US$1.6 billion) and gross profit rose 14 percent to €220.0 million.

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