Staffline grows by breaking the rules

Indeed, despite uncertainty created by the referendum result, 2016 was a good year for the group's staffing business, which accounted for 49 per cent of last year's gross profits (revenues after the wages passed on to workers) and 47 per cent of underlying operating profit. One reason for the resilience is arguably the company's focus on temporary staff, which employers are more willing to hire during uncertain times as they require less of a commitment than taking on permanent employees.

The company also benefits from its 'on-site' model where it sets up operations at the premises of its clients. Not only does this entrench its business with customers, but it also means less upfront investment is needed to expand and fewer staff are required than would be to operate a branch. Last year 52 new sites were opened, taking the total to 357 locations. Earlier this month, the staffing business was expanded further with the acquisition of Brightwork, which increases Staffline's presence in Scotland and reports have emerged that the group is in talks to take over NHS Professionals, a government agency responsible for supplying doctors and nurses to hospitals.

However, there are reasons to be nervous about the impact of Brexit on Staffline beyond the potential economic implications faced by the staffing sector as a whole. Analysts have highlighted that about three-quarters of the people working through the company are eastern European, raising the spectre of trouble on the supply side should levels of immigration drop. However, the company thinks increases to the national living wage and reforms to the welfare system have the potential to boost the indigenous workforce. What's more, any tightening of supply should boost demand for Staffline's services and could even prove a benefit as long as enough workers can still be found to fill posts.

Any shortage of labour also stands to benefit the other half of Staffline's operations. Its PeoplePlus division is involved in getting unemployed people off welfare and into work, including ex-prisoners. The company is involved with a number of government contracts and, while last year's performance was fairly pedestrian and the general election is likely to subdue activity for some of this year, the division has been improving its performance rating.