Challenging conditions in the UK impacted returns for recruiter Impellam (IPEL). The recent general election weighed heavily on the specialist staffing business and the healthcare division was put under increased strain following the introduction of IR35 – new regulations governing off-payroll contractors working in the public sector – which has meant a tax increase for many workers. This has led to a longer lead time on placements. Operating profit for the UK specialist staffing business was down 44 per cent to £7.1m. Managed services, the group’s outsourcing division, performed better but still saw a 17 per cent drop in profit for its UK operation.
The group has been working to reduce its dependency on the UK, and in the year non-UK gross profits rose to account for 37.6 per cent of the total, from 33.2 per cent prevously. However, profit was also down in the US, with specialist staffing and managed services both experiencing a drop in revenue. It was down 23 per cent on the same six months to June 2016 to total £7.1m across the two divisions. In spite of this, revenue was up 17 per cent.
Consensus forecasts on SharePad have EPS falling to 94.8p for the year to December 2017, rising to 103.9p in 2018 (from 107.6p in FY2016).
| IMPELLAM (IPEL) | ||||
| ORD PRICE: | 660p | MARKET VALUE: | £2.19bn | |
| TOUCH: | 650-670p | 12-MONTH HIGH: | 810p | LOW: 605p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 76p* | NET DEBT: | 37% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.05 | 17.5 | 29.9 | 7.00 |
| 2017 | 1.08 | 12.1 | 20.9 | 7.00 |
| % change | +2 | -31 | -30 | |
| Ex-div: | 31 Aug | |||
| Payment: | 06 Oct | |||
| *Includes intangible assets of £296m, or 89p a share | ||||
