One of the peculiar features of this triple-dip recession has been the relatively low levels of unemployment, and this has been a boon for Staffline (STAF). The company announced record revenues as employers uncertain about the future turned to the blue-collar recruitment specialist to provide thousands of temporary staff, but delayed payments on new welfare to work contracts meant adjusted pre-tax profits edged up only 2 per cent to £10.3m.
Staffline delivered 22 per cent of its revenue growth organically through locating recruitment services at its clients. During the year, 16 new 'OnSites' were opened, bringing the total to 179 sites. Four acquisitions provided the remaining growth, one of which, Select Appointments, represented a move into white collar staffing in the autumn.
Gross margins were down from 10.8 per cent to 9.5 per cent, which was largely due to the welfare to work specialist EOS. Revenues in this business jumped a third to £12.9m, but operating profits almost halved to £808,000. Chief executive Andy Hogarth explained that this was largely due to the six-month delay of payments and, following a strong increase in volumes from June, he expects a much improved cash and profit performance in the year ahead.
Broker Liberum upgraded current year EPS estimates by 3 per cent to 40.7p (from 35.9p in 2012).
STAFFLINE (STAF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 350p | MARKET VALUE: | £80m | |
| TOUCH: | 337-350p | 12-MONTH HIGH: | 350p | LOW: 207p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 174p* | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 121 | 3.38 | 11.1 | 2.9 |
| 2009 | 115 | 3.48 | 11.5 | 3.1 |
| 2010 | 206 | 6.98 | 23.7 | 6.2 |
| 2011 | 288 | 7.53 | 25.9 | 7.1 |
| 2012 | 367 | 8.52 | 29.7 | 8.1 |
| % change | +27 | +13 | +15 | +14 |
Ex-div: 29 May Payment: 3 Jul *Includes intangible assets of £34m, or 148p a share | ||||
