"It's a safe investment and one that should keep growing," said chief executive Andy Hogarth as blue collar recruiter Staffline announced a 32 per cent rise in adjusted operating profit to £10.3m and underlying EPS of 33.9p beat analyst estimates by 9 per cent.
While large sections of the recruitment industry have been suffering due to cuts in the banking and professional services sectors, Mr Hogarth said that Staffline is benefiting from resilient demand for manual workers in both the food packaging and manufacturing industries where it supplies companies with staff through offices located at the client's sites. The company started operating from a further 28 new sites during the year, bringing the total to 163, accounting for 85 per cent of total sales.
Staffline also expanded into the government Welfare-to-work programme through the acquisition of Eos (formerly FourStar) in April 2011. Eos subsequently won a £93m contract in the Birmingham region and a £53m contract for the Midlands and Yorkshire. The Eos acquisition led to an increase in amortisation charges from £0.7m to £2.6m, which held back reported profits in our table, but Mr Hogarth added that in the absence of further deals this charge should fall sharply.
House broker Liberum upgraded forecast 2012 adjusted EPS estimates by 6 per cent to 33.4p.
STAFFLINE (STAF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 210p | MARKET VALUE: | £48m | |
| TOUCH: | 208-213p | 12-MONTH HIGH: | 265p | LOW: 159p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 153p* | NET DEBT: | 14% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 120 | 4.37 | 14.2 | 3.80 |
| 2008 | 121 | 3.38 | 11.1 | 2.90 |
| 2009 | 115 | 3.48 | 11.5 | 3.10 |
| 2010 | 206 | 6.98 | 23.7 | 6.20 |
| 2011 | 288 | 7.53 | 25.9 | 7.10 |
| % change | +40 | +8 | +9 | +15 |
Ex-div: 30 May Payment: 4 Jul *Includes intangible assets of £34m, or 149p a share. | ||||
