FINANCIALS: Empresaria reveals fall in profits, but Offshore Services delivers growth

Empresaria’s Offshore Services operations proved to be the shining light in the company’s fortunes in 2023, according to the global specialist staffing group’s annual results.

For the year ended 31 December 2023, the group suffered a 4% dip in revenue to £250.3m, a 12% drop to £57.5m in net fee income (NFI) and an 80% drop in operating profit to £1.7m during FY23. Empresaria also saw its adjusted net debt increase to £11.1m in FY23 from £7.9m in 2022, resulting from adverse foreign exchange movements, a higher proportion of tax cash payments reflecting the impact of loss-making subsidiaries “and cash outflows in other areas such as capital expenditure and dividends”, the company said. 

In October 2023, Empresaria exited its loss-making operation in Vietnam with four other businesses in the group, as yet not identified publicly, set for exit at some time this year.

Headcount was trimmed by 17% across the group, excluding Offshore Services.

In a year of “challenging market conditions” for the group overall, Offshore Services delivered year-on-year growth with revenue increased by 6% (13% in constant currency) to £26.9m, NFI increased by 4% (9% in constant currency) to £14m and profits increased by 6% (12% in constant currency). 

Based in India and the Philippines, the services’ specialism is supporting the staffing sector, primarily in the UK and the US, and provide aspects of the end-to-end recruitment process, along compliance, finance & accounting and other services. Clients are primarily recruitment process outsourcing firms but Empresaria says the operation also supports activity across their group. Offshore Services currently accounts for 24% of the group’s NFI.

Empresaria CEO Rhona Driggs said: “Throughout 2023, we took clear action to control costs… We are focused on simplifying how we operate to reduce complexity, creating greater opportunities for cross-selling across our core sectors. We have streamlined our leadership structure and brought our core sector businesses under a single leader in key markets such as the UK and the US… we have also been able to reduce the size of our senior management team, without impacting collaboration across the group.”

Driggs added the company had also accelerated the roll-out of its ‘180 operating model’ in markets that had not already adopted it, separating their sales and delivery functions into specialised teams.

Results highlights:

  • Revenue fell by 6% in the UK and Europe, and NFI by 12%, with operating profit down by 36%.
  • Core operations in the UK were brought together in the UK in late 2023 under a single leader and single management structure.
  • Commercial operations in Germany and Austria were brought together under a single leader at the start of 2024.
  • APAC’s revenue increased by 4% and NFI dropped by 14%, with the region delivering a loss of £800k.
  • Operations in Chile saw its NFI grow by 11% and profits up by 25%.

Driggs told Recruiter: “The biggest unique differentiator in our business is Offshore Services… and it is a growing business. And I think that business will continue to do quite well in the coming years, especially as clients and our sector continue to look at cost controls and cost measures. I think offshoring will become a very strategic play for many of the staffing companies out there today, and that’s the client base that we serve.”

Looking ahead, CFO Tim Anderson said: “We still see a soft market. You know, we expect the wider staffing market to be muted through the first half of this year, although we’re cautiously optimistic that the second half will bring a little bit stronger momentum in to close out the year.”

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