Australia-based staffing firm PeopleIn reported revenue today for the full year ended 30 June 2024 of AUD 1.17 billion (USD 761.5 million), a slight fall of 0.97% when compared to the same period a year ago.

While total revenue has only marginally declined from the prior year, there was a significant decrease in profit. This can primarily be attributed to an increase in volume of lower margin roles, in particular strong growth in Food Industry People Group which attracts lower margins relative to the rest of the group, and lower permanent placements as a result of a slowdown in the technology sector.

The group said significant decreases in revenues from permanent recruitment compounded by mix and reductions in on-hire labour hours were offset by an increase in margin, new business gains and cost savings.

While performance was lower compared to FY23, revenue and earnings have remained steady across the financial year, showing a stabilisation of conditions, the company said.

The company’s result was heavily impacted by the reduction in permanent placement revenue, down AUD 14 million (USD 9.5 million) from FY23. This reduction has been particularly evident across the IT and executive sectors as businesses defer recruitment decisions and increase the ‘time to hire’, due to low business confidence.

PeopleIn added that it developed a strong and sustainable business enabling it to successfully maintain revenue and expand market share, highlighting the strength and effectiveness of its strong sales culture.

The group stated it has responded to the market conditions by ensuring efficiencies across all areas of the group. The cost efficiency program that started in late FY23 has resulted in AUD 7.8 million (USD 5.3 million) of cost savings, ensuring that the group is lean and efficient when conditions improve.

“In addition, the group’s systems transformation program is nearing completion and is actively unlocking efficiencies and increasing data and AI capabilities,” PeopleIn stated in the report.

PeopleIn CEO Ross Thompson said, “FY24 presented significant challenges, with soft economic conditions driven by higher interest rates and declining business confidence across multiple sectors. Despite these headwinds, PeopleIn showed its resilience and responded swiftly. “We have been able to capitalise on our strong sales culture to increase market share, drive efficiency and set ourselves up for growth when markets turn.”

Challenging economic conditions, driven by high inflation and interest rates, together with subdued business confidence will continue to impact PeopleIn in the short term, the group stated.

However, when interest rates start to reduce and in turn business confidence improves, PeopleIn said it is well positioned to return to a growth footing due to the long-term demand for PeopleIn workers, its diversity and size, commitment to efficiency, as well as its dedicated staff and their pursuit of sales opportunities.

“As a result of our transformation programme, PeopleIn has enhanced its capability to acquire and then integrate businesses promptly to drive substantial organic growth through cross-selling services and cost-efficiency gains,” PeopleIn stated. “Opportunities for acquisition have started to emerge and PeopleIn is well placed to acquire earnings at lower multiples while maintaining its key ratios. Key focus sectors would include industrial and health.”

PeopleIn shares closed at AUD 0.75 (USD 0.51), up 4.90% on the day and 7.14% above its 52-week low of AUD 0.70 (USD 0.47), set on 7 June 2024. The company has a market cap of AUD 74.70 million (USD 50.6 million).