Midland-based recruitment group Staffline has seen its full-year pretax profit rise by 30 per cent to £4.4 million, compared with £3.4 million in the previous year.
The Nottingham firm, quoted on AIM, said the improved performance was due largely to higher revenues, which grew 43 per cent to £119.9 million and were driven by strong demand for services.
Staffline also said that trading for the first eight weeks of 2008 had been ahead of the same period last year and in line with expectations. The group specialises on the food processing sector, which represents 60 per cent of its total turnover. It said it expects the sector to withstand the economic slowdown and therefore demand for workers would remain constant. Its largest area of activity was its OnSite outsourced operation, which represents 73 per cent of sales.
The group said its strategy continued to be to grow organically by expanding the number of OnSite locations and by opening new high street branches. The number of OnSite locations grew to 101 at year end compared to 71 a year earlier. As in previous years, it said organic growth had been driven by existing clients taking on additional OnSites as well as new client wins. "Clients continue to be attracted to a combination of the benefits of outsourcing their temporary recruitment function, allowing them to focus on managing their core business, together with the operating efficiencies that the appointment of Staffline delivers," it said.
It said it estimated that it still only has a three to four per cent market share and it was confident that growth was possible. In addition, following the successful acquisition and integration of OSP during 2007, the group said it would continue to consider suitable acquisitions provided they broaden service offering. Staffline said it was also seeing a gradual change in the mix of its business as consumer growth in internet shopping drives the need for additional workers in the distribution market. Managing director Andy Hogarth said the company was mindful of the potential slowdown in the economy, but was confident of continuing progress in the current year and beyond. In reaction, Altium Securities said that the Staffline results were in line with market expectations, with sales some way ahead owing to a higher number of OnSite agreements and stronger throughput generally.
The broker added that earnings per share improved 29.4 per cent year-on-year to 14.1p, while the dividend payout was higher than the market expected - up 41 per cent at 3.8p compared to 2.7p in 2006.
Staffline shares closed up 9.5p at 123.5p.