Despite the shifting political landscape, Staffline (STAF) sustained the momentum generated in the first half of 2016. Organic revenues were up 21 per cent, while another 52 sites were opened through the period, bringing the total to 357. Underlying operating profits were up a third to £40m to the December year-end, complemented by improving free cash flows and another substantial reduction in net debt, down 42 per cent year on year to £36.7m.
Chief executive Andy Hogarth told the IC that while "the labour market was tightening" in the lead-up to last June's EU referendum, "the vote hasn't affected recruitment levels" in Staffline's key markets. Investors won't be completely mollified, however, until there is some clarity on the issue of temporary immigration controls.
Staffline, unlike many other recruiters, has deliberately moved away from a cyclical business model. Around 70 per cent of the positions it fills are linked to blue-collar roles in the food industry; farm produce, processing, through to distribution. This integrated approach to a relatively predictable corner of the labour market gives the stock a defensive quality.
Berenberg expects adjusted EPS of 124p for the 2017 year-end, up from 115p in FY2016.
| STAFFLINE (STAF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,042p | MARKET VALUE: | £289m | |
| TOUCH: | 1,038p-1,042p | 12-MONTH HIGH: | 1,400p | LOW: 725p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 302p* | NET DEBT: | 44% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 367 | 8.5 | 29.7 | 8.1 |
| 2013 | 416 | 8.6 | 33.3 | 10.0 |
| 2014 | 503 | 10.5 | 28.6 | 13.5 |
| 2015 (restated) | 702 | 5.5 | 12.4 | 20.0 |
| 2016 | 882 | 18.9 | 59.1 | 25.8 |
| % change | +26 | +244 | +377 | +29 |
Ex-div: 1 Jun Payment: 4 Jul *Includes intangible assets of £117m, or 424p a share. | ||||
