Dillistone Group (DSG: LSE), the UK-based supplier of recruitment software to the international recruitment industry reported group revenue today of £2.52 million for the six months ended 30 June 2024, a decrease of 10.8% from £2.82 the year prior.

The company said the decrease was amid a tough recruitment market. 

The adjusted EBITDA (adjusted for government support) increased by 12% to £0.650 million from £0.581 million in H1 2023. This resulted in another increase in EBITDA margin to 25.8%, compared to 20.6% in H1 2023, reflecting the group’s continued focus on efficiency.

The group’s operating profit, before acquisition related, reorganisation and other items, increased by 369% to stand at £0.133 million from £0.036 million in H1 FY2023.

Inclusive of acquisition related and other items, the operating profit was £0.065 million compared to a loss of £0.027 million in H1 2023.

The loss before tax decreased to (£0.015 million) from (£0.046m) in H1 2023. Using a like-for-like measure, excluding government support of £0.059m for H1 2023, the comparative figure for H1 2023 is (£0.105m). This makes the result for H1 2024 a decrease in loss of 86%.

Recurring revenues represented 91% of total revenues (2022: 91%). Non-recurring revenues were down 12.5% at £0.175 million (2023: £0.200 million). Recurring revenue decreased by 10.5% to £2.293 million over the comparable period last year (2023: £2.564 million).  

Giles Fearnley, Non-Executive Chairman, said in the report, “In my statement in the annual report, I said that we had made a solid start to the year. These results confirm that statement with adjusted EBITDA and adjusted operating profit up £0.069 million and £0.097 million respectively on H1 2023 despite challenging conditions in our key markets. However, we are not immune to the challenges faced by the recruitment sector, and expect to see recurring revenue in H2 below that delivered in H1, driven in large part by significant staff downsizing among our client base.”

“The board said it is pleased to report a third consecutive half year of adjusted operating profit and an improving adjusted EBITDA margin, consolidating the group’s return to profitability,” Fearnley added.

 “The recruitment sector has undoubtedly had a turbulent time in recent months, and this has impacted upon demand for our services,” Fearnley continued. “Our investment in systems has allowed the group to be agile in responding to these challenges.”

Dillistone Group also reported rolling 12-month adjusted operating profit increases to £0.237 million (H1 2023: £0.009 million).

Dillistone Group shares last traded at £10.10, down 3.81% on the day and 26.25% above the 52-week low of £8.00 set on 22 July 2024. The company has a market cap of 2.14 million.