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LONDON (Alliance News) - AIM-listed recruitment company Empresaria Group PLC Thursday said its first half pretax profit rose by 25%, though results were hurt by adverse currency movements, especially in its rest of the world region, and reported improving market conditions in the UK and Germany.
In addition, Empresaria said it is confident that earnings for the full year will be in line with market expectations, citing its performance to date.
In a statement, Empresaria, which is more biased towards temporary than to permanent recruitment, said it made a GBP2.0 million pretax profit in the six months ended June 30, compared with GBP1.6 million in the corresponding period last year. According to Empresaria, pretax profit increased by 41% at constant currency.
Revenue slipped to GBP94.0 million from GBP95.6 million, but the group said that margins improved due to growth in permanent revenue, which is a higher-margin business than temporary recruitment.
Net revenue, or gross profit, increased to GBP21.6 million from GBP20.9 million, with Empresaria reporting a one percentage point improvement in gross margin to 23%. The group said it maintained its temporary margin at 15.3% despite the sale of its higher margin UK payroll business in 2013.
Chief Executive Joost Kreulen said the group is continuing to invest in its brands in order to drive growth, with new offices opened in Hong Kong, Malaysia, Chile and Mexico. During the period, Empresaria also invested in a Dubai based professional search firm, as it entered into a new geographic region.
"We continue to investigate further investment opportunities to help drive our business forward," Kreulen said in a statement.
"Despite currency headwinds we see exciting growth opportunities ahead and are confident in our ability to deliver profit growth over the next few years. Based on performance to date, we are confident that earnings for the full year will be in line with market expectations and look forward to delivering further growth," Kreulen said.
He also suggested that investing in the group's existing brands will not be the only way of driving growth going forward.
"We are also identifying suitable investment opportunities to bolt on to existing brands, to fill gaps within our current sector coverage or improve our geographic spread," the CEO added.
Empresaria will not pay an interim dividend, it said, because of its policy to invest in growing the business.
Empresaria shares were Thursday quoted down 4.7% at 48.12 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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