French staffing firm DLSI SA (ALDLS: PAR) reported on Friday after markets closed that consolidated revenue for the first six months of the 2024 financial year came to €102.86 million compared with €99.23 million as of 30 June 2023, up 3.7%), but down 6.1% at constant exchange rates and what the company describes as “before integration of external growth”.

This increase in revenue is mainly due to the successful integration of Prestim and ML Intérim, acquired in January 2024, and to a lesser extent, to a positive currency effect linked to the €/CHF exchange rate.

While DLSI had already reported revenue of €53.4 million for the second quarter ended 30 June 2024, the latest H1 report provides EBITDA information as well as net income and profit before tax.

In an uncertain economic climate, DLSI said the temping market slowed over the first half: temping in France fell in all sectors and for all qualifications. The positioning of public holidays in May 2024 also had an unfavourable impact on activity.

On a like-for-like basis, the overall share of management contracts in French revenues, mostly signed with larger accounts, reached 19.4%, compared with 18.8% for the first half of 2023.

Including external growth, sales in France reached €62.1 million, up 5.7% in the first half of the previous year. On a like-for-like basis, sales in France would have come to €53.8 million, down 10%.

DLSI noted that the Prism’emploi barometer forecasted a 6.7% drop in temporary employment over the first six months of 2024 compared with the first half of 2023.

International business (39.7% of consolidated revenue) held steady at €40.8 million, compared with €40.5 million in the first half of 2023. Despite the trend observed in the first half, a recovery in the markets in which the group operates is confirmed, and a return to slight growth on a like-for-like basis is expected over the full 2024 financial year.

Group share of net income showed a loss of €492,000, compared with a profit of €2.2 million in the H1 period ended 30 June 2023. This change is mainly due to:

• A deterioration in the Swiss labour market. According to the SwissStaffing index, the market for permanent jobs saw a 21% drop in revenue in the second quarter of 2024 compared to the second quarter of 2023, while the number of hours of temporary work fell by 5% in the first half of 2024 compared to the first half of 2023.
• The opening of new branches in Switzerland to reduce exposure to the construction sector, which was particularly hard hit, necessitated recruitment and increasing the payroll.
• A significant increase in group personnel costs, in line with salary inflation and ongoing investment in growth and digitalisation.

Several measures have been undertaken in Switzerland to restore the profitability of operations, mainly through FTE (full-time equivalent) staff reductions and the development of new business lines within PEMSA Genève, a construction staffing firm based in Geneva.

While the current environment remains difficult, the DLSI Group said it will continue to implement targeted performance actions by adapting its operating expenses and investments and remains confident in its business model and its ability to adapt in an uncertain international context.

The company added that its half-year results cannot be extrapolated to the full year due to the weaker seasonality of sales in the first half. However, net income for the year will likely be significantly lower than last year.

DLSI shares traded at €12.50, down 10.71% on the day and 13.64% above the 52-week low of €11.00 set on 21 November 2023. The company has a market cap of €35.26 million.