Employment agencies are at the sharp edge of the economic cycle and Ireland's downturn has certainly hit CPL in the second half. It's a repeat of the story outside of Ireland - permanent placement has been first to feel the pinch, in CPL's case with a drop of 18 per cent in fees in the second half, notably in banking, construction and manufacturing, while temporary placement is holding up.
Shorter-term prospects in Ireland aren't encouraging - given the weakening economy and sharply rising levels of unemployment there. But the downturn in permanent placement should be offset to some extent by resilience in the temporary sector, although this is lower margin business. And there are some areas, such as technology, which accounts for around a fifth of profits, which are doing relatively well. But CPL is looking to continental Europe for future growth, and for more bolt-on acquisitions - after buying Alliance last year the healthcare sector is targeted as a promising area.
Broker Goodbody's existing 2009 pre-tax profit estimate of €10.2m, EPS of 24.3¢, is likely to be reduced.
| ORD PRICE: | 145p | MARKET VALUE: | £53.9m | |
| TOUCH: | 135-155p | 12-MONTH HIGH: | 438p | LOW: 128p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 162¢ | NET CASH: | €37.5m | |
| Year to 30 Jun | Revenue ( €m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2004 | 73.9 | 2.56 | 6.0 | 1.0 |
| 2005 | 105 | 5.78 | 13.8 | 1.4 |
| 2006 | 148 | 10.6 | 25.1 | 2.9 |
| 2007 | 196 | 19.3 | 45.1 | 4.0 |
| 2008 | 258 | 20.7 | 48.3 | 5.0 |
| % change | +32 | +7 | +7 | +25 |
Ex-div: 17 Sep Payment: 31 Oct *Includes intangibles of €18.5m, or 50¢ per share £1 = €1.23 | ||||
