Norfolk-based Jark Recruitment says its margins are under pressure following the rise of the minimum wage from £5.05 to £5.35 at the beginning of the month.

Industrial director Richard Morrissey told Recruiter: "We've asked our clients for an increase in margins to cover the rise. We're wearing a lot of the cost. So far we've retained all our customers, but it's to our detriment. It's hard to take but it's out of our control."

However, the company is continuing to perform well, and achieved growth 52% year-on-year, according to Morrissey. "We are achieving steady growth and our retention of staff is industry-leading because we invest in our people and offer them long-term career prospects," he adds.

Jark has opened a new industrial branch in Huddersfield from where it plans to push for national accounts. It has also has opened new construction branches in London and in Leicester. Construction director Paul Mizen, says: "We're also looking at really pushing the electrical and mechanical sector, it's an area we will be investing in."

The company is also launching a new commercial arm, to be based in London's Docklands, to focus on office and secretarial positions. Morrissey says: "It is very competitive but it is a huge market. We are also kicking around the idea of expanding into IT: it is very specialist, but is witnessing huge growth at the moment."

A second commercial branch will open in Reading later this year, and Jark has plans to open a further 20 commercial offices across the country by 2010.

Meanwhile, the company is withdrawing from the driver side of the industrial business. Morrissey said: "We're not focusing on it, it's too specialised, and there are more opportunities in other sectors."