Impellam’s (IPEL) revenues and gross profits for the six months to July edged ahead of comparators in the prior half year, though increased amortisation charges and legal/restructuring costs constrained profitability, with a resultant negative impact on margins: underlying adjusted operating profit at £15.9m was down a fifth on a like-for-like basis.
Management at the staffing group doesn't foresee any improvement in market conditions in the second half of 2019, though it anticipates that the transition from gross profits to earnings will benefit from tightened cost controls. A central feature of the ongoing efficiency drive is the elimination of wasteful duplication across IT systems, support services and recruitment processes. You might highlight the increase in cashflow as a proportion of operating profit as proof-positive of the impact of changes underway, though the relative improvement was largely down to a steep decrease in trade/payables at the 2018 half-year.
The group is in the midst of a restructuring, in order to focus on its managed services and specialist staffing businesses. To this end, it demerged Carlisle Support Services in March, and post-period-end it acquired Flexy Corporation, an AI-powered staffing platform, for around £3m.
House broker Cenkos is forecasting adjusted EPS of 57.2p for the full year, up from 56.9p in 2018.
| IMPELLAM (IPEL) | ||||
| ORD PRICE: | 442p | MARKET VALUE: | £ 214m | |
| TOUCH: | 440-444p | 12-MONTH HIGH: | 647p | LOW: 442p |
| DIVIDEND YIELD: | nil | PE RATIO: | 29 | |
| NET ASSET VALUE: | 538p* | NET DEBT: | 38% | |
| Half-year to 05 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018** | 1.11 | 12.1 | 21.0 | nil |
| 2019 | 1.14 | 5.6 | 9.9 | nil |
| % change | +2 | -54 | -53 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £280m, or 578p a share **Prior period ended 29 June 2018 | ||||
