REG - Empresaria Group PLC - Trading Update

EmpresariaAnnouncement

26/01/2023 07:00

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RNS Number : 8924N  Empresaria Group PLC  26 January 2023

26 January 2023

 

Empresaria Group plc

("Empresaria" or the "Group")

 

Trading Update and Notice of Results

 

 

Solid net fee income growth with full year profits expected to be in line with
market forecasts

Empresaria (AIM: EMR), the global specialist staffing group, today provides a
trading update for the financial year ended 31 December 2022 ahead of
announcing its full year results on 28 March 2023.

 

Trading update

 

·      Net fee income up 10% to £65.4m (up 8% in constant currency)

·      Adjusted profit before tax and diluted earnings per share
expected to be in line with market expectations

·      Adjusted net debt of £7.9m, significantly better than market
expectations

·      Very strong performance from APAC and Offshore Services with net
fee income up 75%, outweighing reductions in UK & Europe and Americas

·      Communicated roadmap to deliver our ambition to double adjusted
operating profit in the medium term

 

The first half of the year saw greater growth (+15%) reflecting a strong
recovery in client demand particularly for permanent placements.  While solid
growth continued into the third quarter, growth eased in the fourth quarter
reflecting a strong prior year comparative and some reduction in demand from
specific clients in key sectors such as IT.

 

The Group has continued to invest for the future and communicated its roadmap
to double adjusted operating profit to £20m in the medium term at a capital
markets day in October 2022.  The actions outlined remain on track and
delivery against this plan continues to be a key focus.

 

Financial position

 

Adjusted net debt has significantly reduced at 31 December 2022 to £7.9m,
£6.1m lower than 31 December 2021 and £2.9m lower than 30 June 2022.  This
reflects the profits generated by the Group in the year, along with a
reduction in working capital requirements driven by a move in the weighting of
revenue from temporary and contract to permanent placements.  Headroom,
excluding invoice financing, has increased to £17.9m.

 

 

Performance by sector

 

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

 £m                 2022   2021   % change  % change (constant currency)*
 UK & Europe        28.4   29.0   -2%       -2%
 APAC               15.8   14.1   +12%      +12%
 Americas           8.7    9.9    -12%      -19%
 Offshore Services  13.5   7.7    +75%      +67%
 Intragroup         (1.0)  (1.2)  -17%      -17%
 Total              65.4   59.5   +10%      +8%

* The constant currency movement is calculated by translating the 2021 results
at the 2022 exchange rates.

 

The UK & Europe saw mixed performances in 2022 with net fee income falling
by 2%.  In the UK, net fee income was up by 3% with strong growth in
Professional, driven by increased permanent placement demand, offset by a
weaker performance in IT.  In our blue-collar Commercial businesses in
Germany, we saw good recovery in our logistics operation which returned to
growth after a challenging 2021, however, our temporary business was adversely
impacted by client supply chain issues earlier in the year and higher sickness
levels resulting in net fee income falling year on year.

 

In APAC, year-on-year net fee income growth of 12% reflected strong
performances across most of the region with record net fee income in
Singapore, Indonesia, Philippines, Thailand and Japan driven by growth in our
Professional and IT sectors.  Aviation failed to improve significantly in
2022, with recovery in our core Asia market lagging behind that in the US and
Europe, reflecting the continued closure of China throughout 2022 and
significant restrictions on travel to Japan.

 

In the Americas, net fee income fell by 12% with the main driver being the
expected reduction in Healthcare in the US following an extremely strong 2021
that was driven by COVID-19 vaccination and testing related demand.  Our US
IT business also had a challenging year, particularly in the second half where
our permanent recruitment offering was impacted by significant technology
lay-offs at key clients.

 

Offshore Services had a very strong 2022 with net fee income up 75%
year-on-year.  UK demand, driven by healthcare, remained very strong and
continued to grow throughout the year.  The US was more challenging primarily
driven by reduced demand from the IT sector.

 

Rhona Driggs, CEO of Empresaria, commented:

 

"We are pleased with our overall progress and performance in the year.   As
we move into 2023, we look ahead with some caution given the wider economic
environment, however, we are continuing to see strong demand in many of our
markets largely driven by ongoing skills and labour shortages.

 

The transformation of the Group in recent years, along with the proven
benefits from our diversification by geography and sector, improves our
resilience and provides us with a strong foundation for growth.  Executing
our 'Roadmap to £20m' remains our key focus and we are confident we are well
placed to deliver on our medium-term ambition to double our adjusted operating
profit."

 

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.

 

- 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
 Cenkos Securities plc (Joint Broker)                   020 7397 3900
 Katy Birkin / Charlie Combe (Corporate Finance)

Michael Johnson / Jasper Berry (Sales)
 Alma PR (Financial PR)                                 020 3405 0205
 Sam Modlin
empresaria@almapr.com

 Hilary Buchanan

 Pippa Crabtree

 

Notes for editors:

§ Empresaria Group plc is a global specialist staffing group.  We are driven
by our purpose to positively impact the lives of people, while delivering
exceptional talent to our clients globally.  We offer temporary and contract
recruitment, permanent recruitment and offshore services across six sectors:
Professional, IT, Healthcare, Property, Construction & Engineering,
Commercial and Offshore Services.

 

§ Empresaria is structured in four regions (UK & Europe, APAC, Americas
and Offshore Services) and operates from locations across the world including
the four 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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