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Must be one of the most undervalued stocks on the market at the moment and I've been building a very nice stake here for the rerating :-) DYOR http://www.edisoninvestmentresearch.com/?ACT=18&ID=10133
Empresaria Group is the sole owner of Skillhouse after purchasing the remaining 10 per cent interest in the recruitment company, the staffing specialist said Monday. The AIM-quoted group announced it bought the stake for a total consideration of £0.45m in cash. "In line with group strategy, discussions are ongoing with the senior managers of Skillhouse to implement an equity incentive plan for the next stage of growth," the company said in a statement. Skillhouse specialises in the placement of IT professionals on a permanent and temporary basis. The company generated revenue of £8.1m and profit before tax of £0.6m for the year to December 31st, 2011.
The year-end trading update confirms that Empresaria is set to deliver FY12 figures in line with market expectations – in itself a respectable result in difficult markets. It is as yet early days in the corporate recovery story and there is little, if any, help from underlying markets. The shares continue to trade at a heavy discount to the sector, but the group should now start to leave its historic issues behind and a more consistent performance should enable the rating to start on recovery.
There was a net £1.7 million cash outflow from operating activities – though this was more than entirely due to a net negative £2.3 million working capital movement. The company ended the period with net debt of £8.5 million, up from £6.1 million six months earlier – though net current assets stood at £4.3 million, compared to a net liabilities position of £2.4 million at the end of 2010 as the company renewed bank facilities in March. With also strong underlying cash flow cover of interest costs and net cash receipts of £0.8 million to be factored in following the recent sale of the company’s payroll processing business in Indonesia, the balance sheet continues to look solid enough – this with the stated net current assets balance including a £3 million provision as a current best estimate of potential retrospective claims in Germany. Looking forward, the company admits “the financial impact of the disruption to our German operations during the first half of the year has been greater and lasted longer than originally anticipated” and although a materially improved performance in the second half is anticipated, “with Germany accounting for approximately 40% of group Net Fee Income and softer market conditions in the UK, the growth generated from our Asian and Chilean operations is not sufficient to offset this short-term deficit within our largest market. As a consequence expect full year profits before exceptional provision to be lower than current market forecasts”.
Empresaria noted the financial impact of a legal ruling relating to certain collective labour agreements and requiring changes to pay tariffs for temporary workers in Germany “amounted to £1.7 million in lost net fee income and unplanned legal costs in the period”. The impact on the company’s overall result for the six months is evident in total adjusted pre-tax profit coming in at £1.2 million, down from £2.6 million in the comparative prior year period, with earnings per share totalling 0.9p, down from 1.9p. Increased Net Fee Income from the company’s ‘Rest of the World’ and UK operations meant overall Net Fee Income was held at £22.4 million - on total group revenue which edged higher to £105.2 million, from £104.4 million.
Staffing group Empresaria* saw its shares hit hard following yesterday’s interim numbers and news that long-serving Chief Executive Miles Hunt is to depart next year to pursue other opportunities. The results for the six months ended 30th June 2011 particularly reflected adverse developments in the group’s largest market, Germany – which, together with the news of Miles Hunt leaving, overshadowed that much positive progress is being made and that the results announcement brings a previously missing degree of certainty to the company’s situation in Germany. With this resultantly suggesting the fear which has driven the share price down to current levels is overdone,
Valuation: Heavily discounted Empresaria’s rating reflects a combination of discount factors. Firstly, that stocks with smaller market capitalisations are priced at roughly half the levels of the larger quoted stocks in the sector. Secondly, that the group suffered from considerable uncertainty last year due to the inability to quantify one-off and ongoing costs relating to the German situation. While the latter issue has been substantively resolved, this further disappointment may continue to delay the closing of the discount.
Valuation: Heavily discounted Empresaria’s rating reflects a combination of discount factors. Firstly, that stocks with smaller market capitalisations are priced at roughly half the levels of the larger quoted stocks in the sector. Secondly, that the group suffered from considerable uncertainty last year due to the inability to quantify one-off and ongoing costs relating to the German situation. With a new CEO, the market has also been waiting to see if there were substantive changes to the corporate strategy. As these uncertainties are resolved, we would expect the second and third elements of the discount to be closed, provided results continue to be delivered in line with market expectations.
"Global economic conditions remain uncertain and, while we continue to see generally good candidate and client demand, confidence is fragile and necessitates a cautious approach, especially in the UK and Continental Europe," said Chairman Tony Martin
Pre-tax profit at recruitment firm Empresaria slumped by 71% from £6.5m to £1.9m in 2011. The major reason for this was lower profits in Germany, where new collective bargaining agreement required the group to raise pay rates for some of its temporary works and to incur significant legal fees. Meanwhile revenue rose 1% from £206.8m to £208.9m with growth held back by falling sales in the UK.
Anyone have any thoughts here? Does this look like a reasonable bet, or has the boat been missed?
Chief Executive Joost Kreulen said: "After a disappointing first half result, the Group saw an improved second half performance across all regions, despite more challenging trading conditions in Europe in the last quarter of the year. The Rest of World region delivered stronger second half profits than in the prior year, even after the costs of investing in new offices in Asia. In Germany, margins improved as a result of price increases and cost reduction measures. The potential claims for retrospective pay and social security contributions in Germany are still subject to ongoing court proceedings. The social security department has started to audit our branch network in Germany and we hope to update the market when we present our full year results in March. The global economic conditions remain uncertain, however, we still see opportunities for organic growth, in particular in the emerging markets"
Trading Update Empresaria Group plc ("Empresaria" or the "Group"), the international specialist staffing group, today issues a trading update for its financial year ended 31 December 2011, ahead of its results for that period which it expects to announce on 21 March 2012. The Board today confirms that full year trading is expected to be broadly in line with current market expectations.
http://www.investegate.co.uk/Article.aspx?id=201201190700138054V
9th September 2011 Analyst: Steve Moore Email: steven.moore@gecr.co.uk Tel: 0207 562 3370 Empresaria Group* - Interim Results comment. 'Speculative Buy' at 25p; Target Price 38.4p
14th June 2011 Analyst: Derren Nathan Email: derren.nathan@gecr.co.uk Tel: 0207 562 3371 Empresaria Group* - Forecasts pared, price target 77p (85p) - stance at 51p remains buy
2nd April 2011 Analyst: Derren Nathan Email: derren.nathan@gecr.co.uk Tel: 0207 562 3371 Empresaria Group*: Finals - Buy at 58.5p with a target price of 85p
TODAY'S HOT TIP ON SHARECRAZY Empresaria Group* : Buy at 65.5p - Trading statement ahead of expectations. Increase in forecasts and target price moved from 78p to 85p A report by Growth Equities & Company Research Empresaria Group, the multinational specialist staffing group, has today issued an upbeat trading statement indicating that financial results for the year ending 31st December 2010, are slightly ahead of expectations and suggesting that 2011 market estimates are too low. At £223 million revenues were £1 million ahead of our forecasts and Net Fee Income of £49 million was broadly in line with our expectation. Full year adjusted pre-tax profits are expected to be slightly ahead of expectations and we have increased our forecast marginally to £6.5 million (£6.2 million).
Haven't they got iro 9m debt?
take a look at this share - again was subject to heavy sell of during last month but hasnt caught the eye of many yet. Huge growth potential currently has p/e of around 17/18! Strong broker recommendation in may by Daniel Stewart! DYOR but i would have to say buy!
Excellent interim results for first 6 months up to 30th June, with the company also traditionally making their main profit in secomnd half of the year. Financial highlights * Turnover of £33.9m (2005 £24.5m), up 38% * Net fee income of £9.9m (2005 £7.0m), up 41% * Adjusted operating profit of £1.15m (2005 £0.89k), up 29%* * Adjusted profit before tax of £0.95m (2005 £0.75m) up 27%* * Adjusted earnings per share 2.3p (2005 1.8p) up 28%*