REG - Staffline Group PLC - Trading Update

StafflineAnnouncement

04/02/2025 07:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250204:nRSD7492Va&default-theme=true

RNS Number : 7492V  Staffline Group PLC  04 February 2025

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

4 February 2025

 

STAFFLINE GROUP PLC

("Staffline", the "Company" or the "Group")

 

Trading Update

 

-  Strong performance with underlying operating profit exceeding market
expectations(1)

 

-  Net cash (pre-IFRS 16) significantly ahead of market expectations(1)
reflecting balance sheet strength

 

-  £2.5m share buyback programme completed in 2024 demonstrates ongoing
confidence in Staffline's operating model and market position

 

Staffline, the recruitment and training group, provides the following trading
update for the year ended 31 December 2024 ('FY 2024'), as well as the outlook
for 2025 ('FY 2025').

 

Financial Highlights(2)

 

                                                FY 2024     FY 2023   Change
 Revenue                                        £1,058.5m   £938.2m   +12.8%
 Gross profit                                   £88.1m      £80.8m    +9.0%
 Gross profit margin %                          8.3%        8.6%      -0.3%pts
 Underlying operating profit(3)                 £11.1m      £10.3m    +7.8%
 Gross profit to operating profit conversion %  12.6%       12.7%     -0.1%pts
 Net cash (pre-IFRS 16)                         £9.7m       £3.8m     +£5.9m
 Net cash/(debt) (post-IFRS 16)                 £4.4m       £(0.7)m   +£5.1m

 

·    12.8% increase in revenue, reflecting market share gains, and
strength of Staffline's business model despite a challenging market for
recruitment and training.

·    9.0% increase in gross profit driven by a strong performance across
the Group's recruitment activities and underpinned by an excellent result in
permanent placement fees from new customers.

·   7.8% increase in underlying operating profit to £11.1m (2023:
£10.3m), with stronger performance from Recruitment GB and Recruitment
Ireland offsetting a weaker performance from PeoplePlus.

·    Underlying profit before tax exceeded market expectations,
notwithstanding the impact of the slower than expected reduction in interest
rates, which partially offset the strong underlying operating profit
performance.

·    Net cash (pre-IFRS 16) well ahead of expectations at £9.7m (2023:
£3.8m) due to debtor day reduction and tight control of working capital
following peak trading during Q4.

(1)Company-compiled consensus for FY 2024 underlying operating profit, and net
debt (pre-IFRS 16), based on the mean average of two analyst estimates, stands
at £10.1m and £(0.6)m, respectively.

(2)Presented on a continuing basis. These figures are unaudited and
provisional.

(3)Underlying results exclude goodwill impairment, amortisation of intangible
assets arising on business combinations, reorganisation costs and other
non-underlying charges.

 

Summary

 

Staffline delivered an excellent trading and cashflow performance across FY
2024 against a continued challenging macroeconomic backdrop. Trading was
supported by strong financial results across the Group's recruitment
activities, with the recruitment businesses reporting a 10.1% increase in
gross profit. Cashflow was strong, facilitating a £2.5m share buyback
programme during FY 2024.

 

Recruitment GB

 

Blue-collar recruitment had an excellent year, with the traditional trading
peak during December in the run up to Christmas delivering a 12.3%
year-on-year increase in hours worked, bringing the full-year uplift to +10%
vs. the prior year. Despite weak retail sales and declining demand for
temporary workers in many sectors, the Group's growth continues to be driven
by market share gains in third-party outsourcing and large supermarket
customers, marking the fifth consecutive year of revenue and gross profit
growth for Recruitment GB. Strong volumes from our key food retailers
including Tesco, Sainsbury's, and Marks & Spencer, combined with good
demand from the logistics sector, bolstered by strong volumes over the Black
Friday period, supported Recruitment GB's performance. Mandates secured with
new customer G4S in H1 2024 delivered a 5% growth in permanent recruitment
during the year, further expanding our permanent placement service within the
sector and reinforcing our strategy to increase the proportion of permanent
recruitment.

 

Recruitment Ireland

 

Recruitment Ireland also had a remarkable year following a challenging FY 2023
with gross profit increasing alongside tight control of costs. Permanent
placement fees were up 38% on 2023 due to new customers and expanded HR
assessment and consulting services. The previously reported Garda contract win
(Ireland Police Service) started slower than expected but ended the year
broadly in line with management expectations.

 

PeoplePlus

 

PeoplePlus reported resilient results despite being affected by a weak market
for training and employability.

The division is still awaiting delayed bid results in England and Wales due to
uncertainty following the UK general election; these are multi-year contracts
worth an estimated £190m of revenue. Pleasingly, PeoplePlus saw a marked
increase in new business wins, with new contracts secured with HMP Millsike
alongside our partner Mitie Plc, and an exclusive partnership secured with
Scottish Prison Services to provide education and training in Scotland for the
first time. This £28m contract will go live in September 2025 with 16 prisons
and circa 89 staff joining the PeoplePlus Justice Division.

 

FY 2025 Outlook

We believe FY 2025's performance will be impacted by ongoing macroeconomic
uncertainty. This may affect our recruitment customers operating in
blue-collar markets, as a result of the increase in employers' national
insurance, and also impact permanent white-collar demand, to which our Ireland
division is more exposed.  Nevertheless, we anticipate continued growth in
blue-collar recruitment across Great Britain, driven by market share
expansion, strong momentum in new business wins, and sustained demand for
essential workforce solutions.

PeoplePlus faces challenges due to prolonged delays in public sector bid
announcements, which will weigh on short-term results.

Interest rate levels higher than originally anticipated, will increase the
cost of working capital compared to previous expectations.

Despite these challenges, Staffline remains confident in its ability to
navigate the evolving landscape. The Group's extensive scale, reach and
financial strength, combined with a proven track record of exceptional
service, position it well to leverage the opportunities in the markets in
which it operates.

Albert Ellis, Chief Executive Officer of Staffline, commented:

 

"The Group delivered an outstanding operational and financial performance in
2024, driven by increased market share and new customers combined with a
disciplined approach to costs. The traditional peak trading period in the run
up to Christmas was a success due to the Company's commitment to service
excellence. Strong trading cash flow exceeded expectations, underpinning the
share buy-back programme, and resulted in £9.7m of net cash (pre-IFRS16) at
the end of the year.

 

Staffline remains a trusted strategic partner across a number of key sectors,
both in the UK and Ireland, and I am confident that despite the challenging
backdrop, our track record in continuing to increase market share will
continue to support growth in 2025."

 

For further information, please contact:

 

 Staffline Group plc                                                 via Vigo Consulting

 www.stafflinegroupplc.co.uk (http://www.stafflinegroupplc.co.uk/)

 Albert Ellis, Chief Executive Officer

 Daniel Quint, Chief Financial Officer

                                                                     020 3100 2222

 Panmure Liberum (Nominated Adviser and Broker)

 www.panmureliberum.com (http://www.panmureliberum.com)

 Richard Lindley

 Satbir Kler

 Zeus (Joint Broker)                                                 020 3829 5000

 www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)

 David Foreman (Investment Banking)

 Nick Searle (Sales)

 Vigo Consulting (Financial PR)                                      020 7390 0230

 www.vigoconsulting.com (http://www.vigoconsulting.com/)             Staffline@vigoconsulting.com

 Jeremy Garcia / Verity Snow

 

About Staffline - Recruitment, Training and Support

Enabling the Future of Work™

Staffline is the UK's market leading Recruitment and Training group. It has
three divisions:

 

Recruitment GB

The Recruitment GB business is a leading provider of flexible blue-collar
workers, supplying up to c.35,000 staff per day on average from around 400
sites, across a wide range of industries including supermarkets, drinks,
driving, food processing, logistics and manufacturing.

 

Recruitment Ireland

The Recruitment Ireland business is a leading end to end solutions provider
operating across multiple industries, ten branch locations and ten onsite
customer locations, supplying c.4,500 staff per day on average, and offering
RPO, MSP, temporary and permanent solutions across public and private sectors
throughout the island of Ireland.

 

PeoplePlus Division

The PeoplePlus business is a leading provider of employability,
adult training, prison education and skills-based programmes across the
country to those who are disadvantaged in society. In addition, it delivers
Community Service support as well as social value services and expertise to
employers.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTSSDEFDEISESE