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Staffline revenue up 12.8%, FY 2025 faces macroeconomic uncertainty

Staffline revenue up 12.8%, FY 2025 faces macroeconomic uncertainty

Danny Romero
| February 4, 2025
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Staffline Group, the UK-based recruitment and training group, reported revenue of £1.06 billion for the full year ended 31 December 2024, up 12.8% over the same period a year ago, according to the company’s trading update.

The 12.8% increase in revenue reflected market share gains and the strength of Staffline’s business model despite a challenging market for recruitment and training, it said.

“The group delivered an outstanding operational and financial performance in 2024, driven by increased market share and new customers combined with a disciplined approach to costs. The traditional peak trading period in the run-up to Christmas was a success due to the company’s commitment to service excellence. Strong trading cash flow exceeded expectations, underpinning the share buy-back programme, and resulted in £9.7 million of net cash (pre-IFRS16) at the end of the year,” Albert Ellis, CEO of Staffline, said in a press release.

(£ millions)

FY 2024

FY 2023

Change

Revenue

1,058.5

938.2

12.8%

Gross profit

88.1

80.8

9.0%

Gross margin

8.3%

8.6%

-

Underlying operating profit

11.1

10.3

7.8%

The 9.0% increase in gross profit was driven by a strong performance across the group’s recruitment activities. The group said this was underpinned by an ‘excellent result in permanent placement fees from new customers.

The 7.8% increase in underlying operating profit to £11.1 million (2023: £10.3 million) was achieved with stronger performances from Recruitment GB and Recruitment Ireland offsetting a weaker performance from PeoplePlus, the company’s adult education and training provider.

Staffline said underlying profit before tax exceeded market expectations, notwithstanding the impact of the slower-than-expected reduction in interest rates, which partially offset the strong underlying operating profit performance.

Within the Recruitment GB business, the company said blue-collar recruitment had an ‘excellent year’, with the traditional trading peak during December in the run-up to Christmas delivering a 12.3% year-on-year increase in hours worked, bringing the full-year uplift to 10% against the prior year.

Despite weak retail sales and declining demand for temporary workers in many sectors, the group’s growth continues to be driven by market share gains in third-party outsourcing and supermarket customers, marking the fifth consecutive year of revenue and gross profit growth for Recruitment GB.

Strong volumes from key food retailers including Tesco, Sainsbury’s, and Marks & Spencer, combined with demand from the logistics sector, bolstered by strong volumes over the Black Friday period, supported Recruitment GB’s performance. Mandates secured with new customer G4S in H1 2024 delivered a 5% growth in permanent recruitment during the year, further expanding the permanent placement service within the sector and reinforcing the company’s strategy to increase the proportion of permanent recruitment.

Within the Recruitment Ireland business, permanent placement fees were up 38% in 2023 due to new customers and expanded HR assessment and consulting services. The previously reported Garda contract win (Ireland Police Service) started slower than expected but ended the year broadly in line with management expectations.

PeoplePlus reported resilient results despite being affected by a weak market for training and employability. The division is still awaiting delayed bid results in England and Wales due to uncertainty following the UK general election; these are multi-year contracts worth an estimated £190 million of revenue.

In its FY 2025 outlook, the group said its performance will be impacted by ongoing macroeconomic uncertainty. This may affect recruitment customers operating in blue-collar markets, as a result of the increase in employers’ national insurance, and also impact permanent white-collar demand, to which the Ireland division is more exposed.  

“Nevertheless, we anticipate continued growth in blue-collar recruitment across Great Britain, driven by market share expansion, strong momentum in new business wins, and sustained demand for essential workforce solutions,” the company stated.

PeoplePlus faces challenges due to prolonged delays in public sector bid announcements, which will weigh on short-term results. Interest rate levels higher than originally anticipated will increase the cost of working capital compared to previous expectations.

Despite these challenges, Staffline said it remains confident in its ability to navigate the evolving landscape. The group’s extensive scale, reach and financial strength, combined with a proven track record of exceptional service, position it well to leverage the opportunities in the markets in which it operates.

“Staffline remains a trusted strategic partner across a number of key sectors, both in the UK and Ireland, and I am confident that despite the challenging backdrop, our track record in continuing to increase market share will continue to support growth in 2025,” Ellis said.

Staffline’s update, which saw profits surpassing forecasts, boosted its shares to £22.90 as of last trade, up 21.81% for the day and 27.22% above the 52-week low of £18.00 set on 3 February 2025. The company has a market cap of £26.76 million.