Staffline sees rise in H1 profits, shares surge

By Michele Maatouk

Date: Wednesday 28 Jul 2021

LONDON (ShareCast) - (Sharecast News) - Staffline said on Wednesday that first-half gross profit was set to rise amid continued "strong" trading across the board, sending shares of the recruitment and training specialist sharply higher.
In an update for the six months to the end of June, the company said gross profit was expected to jump 14% on the same period a year ago to 39m, while revenue was set to increase 4.7% to 450.7m.

Staffline said recruitment GB performed strongly throughout the first half across food, logistics and e-commerce, with additional margin gains from new business wins in online food distribution and the effect of exiting legacy lower margin contracts.

"This was achieved despite challenges in the specialist driving division due to the widely reported acute labour shortages," it said.

In Ireland, recruitment delivered a "strong" six months, it said, amid good trading in the core Northern Ireland business, tight cost control and continued growth in the Republic of Ireland.

The company's PeoplePlus segment reported an "excellent" performance from its core 'employability' division, it added.

Non-executive chairman Ian Lawson said: "Trading has continued to be strong across the first six months of the year to 30 June 2021 and is ahead of expectations with all three of Staffline's core divisions delivering a solid performance in the first half.

"This, coupled with the benefits of the group's cost reduction measures implemented in 2020, in addition to securing new higher margin business, continues to underpin underlying operating profit growth."

Staffline expects to report a net cash position of 20.9m at the end of June, compared to net debt of 36.2m the year before. This was attributed mainly to net proceeds of 44.4m from an equity raise last month and VAT payment relief of 40.7m still to be repaid, among other things.

At 1330 BST, the shares were up 12% at 65p.