(Correcting that Empresaria's expectation of no short-term recovery applies to the aviation division only and not the Professional sector as a whole.)
(Alliance News) - Empresaria Group PLC said it swung to a loss in its first half with a particularly weak revenue performance from the Professional employment sector during the pandemic.
The West Sussex-based staffing firm swung to a GP1.2 million pretax loss for the six months ended June 30 from a GBP2.3 million profit a year before.
Empresaria reported a 22% drop in revenue to GBP136.1 million from GBP175.5 million as Professional sector revenue fell a sharp 43% to GBP35.3 million from GP62.2 million. This sector did, however, manage to generate a small adjusted operating profit, albeit 71% lower than the prior year.
Empresaria said: "Our Professional sector saw a significant adverse impact from Covid-19 across all businesses. The 36% fall in net fee income was largely offset by cost reductions which meant that the sector continued to generate a profit despite the prevailing trading conditions. The sector is more than 60% permanent placement which has been significantly impacted. We also saw a particularly adverse impact where we supply the aviation sector which has experienced substantial and sustained reduction in demand. We do not expect to see a recovery in this business to pre-Covid-19 levels in the short term, but believe that this industry offers good growth potential for the group in the medium and long term. We have taken action to restructure this business, to right size its cost base and ensure it is well placed to rebuild as the market comes back.
"This remains our largest sector and while it has been hit hard by Covid-19, we believe this sector will be a significant profit driver for the group as we move forward and continue our focus on growing our temporary and contract business."
On the outlook as a whole, Chief Executive Rhona Driggs said: "Given the ongoing uncertainty and risks from Covid-19, we are cautious on the speed of recovery but remain confident in the group's ability to fulfil its longer-term growth ambitions. A great deal of progress has been made in incorporating new ways of working since the outbreak. We are confident that by maintaining a steadfast focus on our strategic priorities of operational excellence and productivity while ensuring we continue to manage our costs, we will emerge in a strong position to take advantage as and when demand returns."
By Anna Farley; annafarley@alliancenews.com
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Empresaria Group (EMR)