Impellam profits up as business changes underway
30 July 2014
The UK’s fifth largest recruitment company, Impellam, increased its gross profit in the UK… click here for more
Wed, 30 Jul 2014The UK’s fifth largest recruitment company, Impellam, increased its gross profit in the UK in the first half of 2014 by more than 12% to nearly £57m, the company revealed today.
In announcing its interim results for the 26 weeks ended 27 June, Impellam also revealed the increased hiring of consultants at its businesses in light of improving market conditions.
In addition, the group disclosed that changes were underway at its engineering and technical business Carbon60, and finance and accountancy recruiter Hewitson Walker. The results also revealed challenges faced by Impellam businesses Medacs Healthcare Group and volume recruiter Carlisle Support Services.
Former Metropolitan Police commissioner Sir Paul Stephenson was also identified as one of the company’s two new non-executive directors. Retired Army Major General Michael Laurie, who also held the chief executive’s role at crime-fighting charity Crimestoppers for 10 years, is the second.
Impellam revealed that UK operating profit in the segment improved to £14.2m from £12.3m during the same period last year. The profit included a £1.4m contribution from its education recruiter Career Teachers, which Impellam acquired last March.
The company’s UK revenue increased 10.5% to £411m and gross profit increased by 12.2% to £56.9m. Overall, the company’s revenue increased to £612.3m from £591.7m for the same period last year, with gross profit for the first half of this year at £91m, compared to £83.8m for the same period in 2013.
In detailing activities at its various businesses, Impellam noted that underperformance at Carbon60, in which management has recently been changed, and at Hewitson Walker had “masked” the impact of growth at “traditional network businesses” Tate and Blue Arrow. The Hewitson Walker business is being re-engineered to focus on qualified staff, the results report said.
In the healthcare sector, Impellam’s Medacs reported a 2.5% decrease in revenue for the half-year but a 16.4% increase in gross profit. The company attributed decline in revenue to changing buying patterns in the NHS with “shorter lead times and multiple buying frameworks for medical professionals alongside increased competition from new entrants, particularly those offering solutions aimed at enabling the NHS to reduce VAT-related costs”.
The report went on to say: “This is evident in the revenue decline in this segment as the NHS is directly responsible for payroll costs under these direct engagement models.”
At the same time, Impellam reported that Medacs had taken “an early lead” in the emerging managed services market in the healthcare sector… and is also reaping the benefit of a growing profile in the ‘Wellness’ market”.
At Carlisle Support Services, revenue decreased by 12% but gross profit increased by 50%. The results report said: “Following a period of substantial upheaval, the new management team has made considerable progress in stabilising the business, exiting from poor contracts and improving the service delivery in others.
“Importantly,” it went on to say, “we have also negotiated the exit of the onerous contract, the expected losses of which were previously provided for in full to the end of the contract. An orderly handover of the services is ongoing with an agreed termination date at the end of September this year.” It did not identify the partner in “the onerous contract”.
“The outlook for this business continues to improve,” the report said. “However the progress… will take time to achieve. We are confident that the losses have been stemmed.” The company went on to say that Impellam were continuing to “evaluate options for this non-core business” and would update shareholders in due course.
The company is the 11th largest recruitment company in Europe and the 17th largest worldwide. It has 15 brands and around 6,000 employees.
In announcing its interim results for the 26 weeks ended 27 June, Impellam also revealed the increased hiring of consultants at its businesses in light of improving market conditions.
In addition, the group disclosed that changes were underway at its engineering and technical business Carbon60, and finance and accountancy recruiter Hewitson Walker. The results also revealed challenges faced by Impellam businesses Medacs Healthcare Group and volume recruiter Carlisle Support Services.
Former Metropolitan Police commissioner Sir Paul Stephenson was also identified as one of the company’s two new non-executive directors. Retired Army Major General Michael Laurie, who also held the chief executive’s role at crime-fighting charity Crimestoppers for 10 years, is the second.
Impellam revealed that UK operating profit in the segment improved to £14.2m from £12.3m during the same period last year. The profit included a £1.4m contribution from its education recruiter Career Teachers, which Impellam acquired last March.
The company’s UK revenue increased 10.5% to £411m and gross profit increased by 12.2% to £56.9m. Overall, the company’s revenue increased to £612.3m from £591.7m for the same period last year, with gross profit for the first half of this year at £91m, compared to £83.8m for the same period in 2013.
In detailing activities at its various businesses, Impellam noted that underperformance at Carbon60, in which management has recently been changed, and at Hewitson Walker had “masked” the impact of growth at “traditional network businesses” Tate and Blue Arrow. The Hewitson Walker business is being re-engineered to focus on qualified staff, the results report said.
In the healthcare sector, Impellam’s Medacs reported a 2.5% decrease in revenue for the half-year but a 16.4% increase in gross profit. The company attributed decline in revenue to changing buying patterns in the NHS with “shorter lead times and multiple buying frameworks for medical professionals alongside increased competition from new entrants, particularly those offering solutions aimed at enabling the NHS to reduce VAT-related costs”.
The report went on to say: “This is evident in the revenue decline in this segment as the NHS is directly responsible for payroll costs under these direct engagement models.”
At the same time, Impellam reported that Medacs had taken “an early lead” in the emerging managed services market in the healthcare sector… and is also reaping the benefit of a growing profile in the ‘Wellness’ market”.
At Carlisle Support Services, revenue decreased by 12% but gross profit increased by 50%. The results report said: “Following a period of substantial upheaval, the new management team has made considerable progress in stabilising the business, exiting from poor contracts and improving the service delivery in others.
“Importantly,” it went on to say, “we have also negotiated the exit of the onerous contract, the expected losses of which were previously provided for in full to the end of the contract. An orderly handover of the services is ongoing with an agreed termination date at the end of September this year.” It did not identify the partner in “the onerous contract”.
“The outlook for this business continues to improve,” the report said. “However the progress… will take time to achieve. We are confident that the losses have been stemmed.” The company went on to say that Impellam were continuing to “evaluate options for this non-core business” and would update shareholders in due course.
The company is the 11th largest recruitment company in Europe and the 17th largest worldwide. It has 15 brands and around 6,000 employees.
