FINANCIALS: Staffline shows increase in revenue

A trading update today [25 January] from Staffline Group has revealed a 1.6% increase, or £15.1m, in revenue in financial year 2021 from FY 2020, with gross profit improving by 11% over the same period.

The revenue increase does not reflect the costs of management actions to exit low margin contracts in the year ended 31 December 2021, a group statement said. “As a result of these actions and the turnaround plan, the group is anticipated to deliver underlying operating profit for FY2021 of around £10m.” That would reflect what the company termed “a significant increase” of “about 108.3% and around 11% ahead of market expectations for 2021”, the statement went on to say.

All three of the group’s divisions – Recruitment GB, Recruitment Ireland and PeoplePlus – delivered “a strong performance” in the year.

In particular, the exits by Recruitment GB from certain lower-margin contracts, equating to about £40m of annual revenue, was mitigated by “strong new business momentum both in securing new contracts and expanding with existing customers”, the statement said.

Also, “high levels of consultant productivity” were credited by the company for Recruitment Ireland’s H2 2021 performance. “A focus on margin growth and gross profit mix in favour of permanent recruitment, particularly in the white-collar sector, ensured a strong flow through to operating profit,” the statement said.

The future outlook is promising, the company statement said. “The momentum is expected to continue into 2022, supported by a strong new business pipeline, a lower overhead cost base and the expected post-Covid recovery of historically strong Staffline recruitment sectors, such as automotive, manufacturing, aerospace and travel.”

The group expects to report its annual results for the year ended 31 December 2021 on 22 March.

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