Specialist recruiter Empresaria (EMR) has continued its run of net fee income increases, which climbed 13 per cent in constant currency to reach £69.4m in 2017. On an adjusted basis, pre-tax profits and EPS were up 20 per cent and 11 per cent, respectively, but a quick glance at the statutory figures tells a less positive story, with profitability held in check by a rise in administrative costs as well as a loss on the sale of a business unit. However, the recruiter did register another rise in its conversion ratio (operating to gross profit), albeit only 10 basis points to 16.7 per cent, with the rate of growth held back by costs incurred on exiting property leases in the UK.
The top line benefited from increased activity in the IT & design sector in Japan and the retail sector in Chile. The UK is expected to grow this year, although the group continues to struggle in the face of a challenging environment for its technical and industrial brands, especially following the collapse of Carillion earlier this year.
In Germany, another of the group’s main markets, the temporary margin was down 2 per cent following the introduction of new regulations giving temporary workers increased benefits and capping their contracts at 18 months. This is expected to make the temp market more difficult through 2018, but management believes it will ultimately lead to a more attractive and stronger market.
Analysts at Arden Partners are forecasting adjusted pre tax profit of £11.2m, giving EPS of 12.7p for 2018 (£11m and 12.6p in 2017).
| EMPRESARIA (EMR) | ||||
| ORD PRICE: | 89p | MARKET VALUE: | £43m | |
| TOUCH: | 86-91p | 12-MONTH HIGH: | 168p | LOW: 86p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 86p* | NET DEBT: | 25% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 194 | 4.9 | 5.2 | 0.35 |
| 2014 | 188 | 5.9 | 7.8 | 0.70 |
| 2015 | 187 | 7.1 | 9.6 | 1.00 |
| 2016 | 270 | 7.9 | 9.6 | 1.15 |
| 2017 | 357 | 8.1 | 8.0 | 1.32 |
| % change | +32 | +3 | -17 | +15 |
| Ex-div: | 3 May | |||
| Payment: | 31 May | |||
| *Includes intangible assets of £54.1m, or 110p a share | ||||
