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(Sharecast News) - Recruitment and training company Staffline updated the market on its trading in 2020 on Monday, reporting "significant", improving its operational, financial and governance processes and board composition, including strengthening its financial position through a successful refinancing in June.
The AIM-traded firm said the net result had been an improvement in revenues, underlying operating profit, working capital and cash generation in the second half.
It said it expected to report underlying operating profit "marginally ahead" of expectations for the year ended 31 December.
Staffline said it experienced strong demand for temporary recruitment from the food, driving, logistics and e-commerce sectors in 2020, while the manufacturing, retail and automotive industries continued to be more challenging.
"Despite the national lockdown in November and restrictions in December, the group still experienced a strong Christmas trading peak, with significant demand from the group's food retail customers," the company said in its statement.#
"Furthermore, e-commerce and logistics experienced a very strong trading period as a result of consumers transitioning to online retail.
"PeoplePlus successfully completed the disposal of its Apprenticeships business in December 2020 for a nominal consideration, as part of a strategic re-focus on its core employability and adult skills capabilities."
Staffline said it expected PeoplePlus to report an underlying operating profit for the second half of 2020, swinging from a loss in the first half.
At 31 December, the group had pre-IFRS 16 net debt of £9.0m, narrowing from £59.5m, with average net debt throughout the year of £38.1m, down from £85.2m year-on-year.
The company said the year-end position represented an improvement against expectations resulting from the increased focus on working capital and cash generation during 2020, as well as a number of timing effects, including the benefit of deferred VAT relief from the second quarter of 2020 of £42.9m.
"The broader impact of the Covid-19 pandemic, which has caused disruption globally, has created both opportunities and challenges across Staffline," the board said.
"Whilst the current lockdown has not caused the significant spike in food customer demand first seen in March, volumes still remain high and look set to continue until Covid-19 restrictions ease across the UK.
"PeoplePlus took actions to reduce its cost base in the first half of 2020, together with implementing new digital operating models, however it continues to experience disruption to many of its classroom-based services as a result of the pandemic."
Staffline said it delivered a "robust performance" across 2020, underpinned by the new structures and processes implemented during the year.
"These initiatives have provided stability and ultimately positioned the Group for growth; however, the board is mindful that the near-term challenges created by the Covid-19 pandemic remain.
"The employment market experienced a structural shift in 2020, with the pandemic causing a significant rise in UK unemployment, which the board believes presents a number of opportunities for Staffline due to existing customer relationships and the Group's broad market offering."
At 1344 GMT, shares in Staffline Group were up 2.21% at 57.8p.
27 Apr 2015 11:00