REG - Empresaria Group PLC - Trading Update and Notice of Results

EmpresariaAnnouncement

27/01/2022 07:00

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RNS Number : 7581Z  Empresaria Group PLC  27 January 2022

27 January 2022

 

Empresaria Group plc

("Empresaria" or the "Group")

 

Trading Update and Notice of Results

 

 

Strong net fee income growth with targeted investment to drive future
profitability

Empresaria (AIM: EMR), the global specialist staffing group, today provides a
trading update for the financial year ended 31 December 2021 ahead of
announcing its full year results on 17 March 2022.

 

Trading update

 

·      Adjusted profit before tax expected to be slightly above recently
upgraded market expectations.

·      Net fee income up 10% to £59.5m (up 14% in constant currency),
H2 up by 21% (26% in constant currency).

·      Adjusted net debt of £14.0m, significantly lower than market
expectations.

·      All five of our key sectors delivered year-on-year net fee income
growth (constant currency).

·      Very strong performance from Offshore Recruitment Services - net
fee income up 26% (35% in constant currency) and headcount now above 2,000.

·      Invested in new regional structure and senior leadership team and
continued progress in our front office technology implementation.

 

Net fee income recovery has continued, with the second half of 2021 up 21% on
the second half of 2020 (26% in constant currency) and the full year up 10% on
prior year (14% in constant currency).  The Group's diversity by sector and
geography, which helped mitigate the impacts of COVID-19 in 2020, means that
we are seeing differences in growth rates across the Group with very strong
growth in some areas, such as Healthcare and Offshore Recruitment Services,
partially offset by more challenging conditions elsewhere, such as in
Commercial (logistics) and Professional (aviation), as discussed in more
detail below.

 

The Group invested significantly in its senior leadership during 2021 with the
appointment of highly experienced industry professionals into new roles
leading UK & Europe, APAC and North America.  We are already seeing the
benefits of this enhanced team accelerating the execution of our strategy and
growth plans throughout the Group.

 

Going into 2022, we continue to experience favourable market conditions across
parts of the Group.  We are investing in growing our sales and recruitment
teams in targeted markets to take advantage of market recoveries and to
accelerate long-term growth.

 

Financial position

 

Adjusted net debt at 31 December 2021 was £14.0m, an increase of £0.4m from
31 December 2020, and a decrease of £2.5m against 30 June 2021.  As net fee
income has recovered, working capital requirements have increased, but these
have been largely offset by the cash generated by the business during the
period.  Headroom, excluding invoice financing, remains strong at £12.9m.

 

 

Performance by sector

 

Net fee income by sector for the year ended 31 December:

 £m                                        2021   2020   % change  % change (constant currency)*
 Professional                              17.6   15.4   +14%      +16%
 IT                                        13.3   12.7   +5%       +10%
 Healthcare                                4.2    2.5    +68%      +75%
 Property, Construction & Engineering      0.7    0.7    -         -
 Commercial                                17.2   17.2   -         +4%
 Offshore Recruitment Services             7.7    6.1    +26%      +35%
 Intragroup                                (1.2)  (0.6)  +100%     +100%
 Total                                     59.5   54.0   +10%      +14%

* The constant currency movement is calculated by translating the 2020 results
at the 2021 exchange rates.

 

The Group's Professional sector has seen a strong recovery in 2021. This is
despite the ongoing challenges in aviation, particularly in Asia, which was
previously a significant contributor to this sector.  Excluding aviation, net
fee income was up 27% with strong performances across all operations. Overall
net fee income was up 14% (up 16% in constant currency).

 

In IT, net fee income increased by 5% (up 10% in constant currency).  This
was driven by very strong performances in both the US and Japan offset by a
fall in net fee income in the UK where numbers for temporary staff have been
slow to recover.

 

The Group's Healthcare sector delivered a record year with net fee income up
68% compared to 2020 (up 75% in constant currency).  This was led by our US
operations where additional demand was driven by COVID-19 vaccination
programmes.

 

In Property, Construction and Engineering, the Group's smallest sector, net
fee income was in line with prior year with demand for new home sales
temporary staff remaining muted.

 

The Group's Commercial sector delivered net fee income in line with 2020, (up
4% in constant currency).  Performance in this sector has been mixed with
strong recoveries in our temporary staffing business in Germany and in our
operations in Austria and Chile.  However, this has been offset by falls in
net fee income in Peru and in our logistics business in Germany, which, after
a very strong 2020, has experienced significant challenges in filling lower
paid roles as the economy and labour market have recovered.

 

In Offshore Recruitment Services, net fee income was up 26% (up 35% in
constant currency) after another very strong year.  Recovery, combined with
new growth, has been rapid during 2021 with headcount increasing by more than
900 to close the year at over 2,000.

 

 

Rhona Driggs, CEO of Empresaria, commented:

 

"We are pleased with our recovery in net fee income and encouraged by the very
strong recovery in our expected profits. Our Healthcare and Offshore
Recruitment Services sectors both delivered particularly strong performances
with record net fee income levels.  Although challenges remain in some of our
markets, these have been outweighed by positives elsewhere, highlighting the
benefits of being a geographically and operationally diverse Group.

 

As the year progressed, we shifted from recovery mode to growth mode while
continuing to make significant investments in driving the future growth of the
Group.  This includes the appointment of three new senior leaders who,
working with our existing leadership, will be instrumental in accelerating the
delivery of the Group's strategy.  We have also continued to make progress on
our technology implementation with a further nine operations going live on our
common front office platform during the year.

 

As part of our strategy to accelerate the Group's growth, we are making
targeted investment in our sales and recruiting teams for 2022 in those areas
where we see strong long-term growth opportunities and to ensure that we
realise the benefits we are seeing from the talent shortages and wage
inflation clients are experiencing in some of our markets.

 

Looking ahead, we continue to see positive signs in many of our markets. We
are well positioned with the right leadership team and structure, and we look
forward to 2022 with optimism."

 

- Ends -

 

Enquiries:

 Empresaria Group plc                                   via Alma PR
 Rhona Driggs, Chief Executive Officer

Tim Anderson, Chief Financial Officer
 Singer Capital Markets (Nominated Adviser and Broker)  020 7496 3000
 Shaun Dobson / James Moat
 Alma PR (Financial PR)                                 020 3405 0205
 Sam Modlin
empresaria@almapr.com

 David Ison

 Hilary Buchanan

 

Notes for editors:

§ Empresaria Group plc is a global specialist staffing group offering
temporary and contract recruitment, permanent recruitment and offshore
recruitment services across 6 sectors: Professional, IT, Healthcare, Property,
Construction and Engineering, Commercial and Offshore Recruitment Services.

 

§ Empresaria operates from locations across the world including the 4 largest
staffing markets of the US, Japan, UK and Germany along with a strong presence
elsewhere in Asia Pacific and Latin America.

 

§ Empresaria is listed on AIM under ticker EMR.  For more information visit
empresaria.com.

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