(Alliance News) - Empresaria Group PLC on Tuesday said challenging market conditions caused "material" harm to its half-year earnings, but that it is still making good progress on its longer-term strategy.
Shares in Empresaria were down 1.2% at 40.00 pence on Tuesday late morning in London.
The Crawley, England-based recruitment company said it swung to a GBP200,000 pretax loss in the first half of 2023, compared with a GBP3.3 million profit the year before. Empresaria also swung to a diluted loss per share of 2.0 pence, from earnings of 2.7p per share the prior year.
Revenue meanwhile decreased by 3.2% to GBP125.7 million from GBP129.8 million, and operating profit fell by 84% to GBP600,000 from GBP3.8 million. The company did not declare an interim dividend, unchanged from 2022.
Empresaria said the challenging market environment from the second half of 2022, with softening demand and slower hiring decisions, continued into the current year, impacting its net fee income which decreased 8.9% to GBP29.7 million from GBP32.6 million. The IT and healthcare sectors in the US saw especially "significant declines".
"The market has yet to show any significant or sustained signs of improvement as client and candidate confidence remains at lower levels across the majority of our markets and sectors," commented Chief Executive Officer Rhona Driggs. "Our cost base at the start of 2023 was elevated compared to the first half of 2022 reflecting inflationary pressures and targeted investments we made in headcount...As a result, the fall in net fee income has had a material impact on our profits."
Empresaria said it continues to work towards delivering its strategic initiatives, having launched its Professional sector-focused operation in the US. It said it is "already seeing some good early success" from its focus on leveraging its existing US client base.
Regardless, Empresaria expects the tough market conditions to continue to impact its activities throughout 2023, although relatively low levels of unemployment and skills shortages remain. It expects these to underpin and accelerate its recovery.
"While we are disappointed with the start to 2023, we are making progress on our key strategic actions to deliver growth," said Driggs. "Given current market conditions we continue to review our operational and investment priorities to ensure the group is best placed to realise our medium-term ambition."
By Emma Curzon, Alliance News reporter
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Empresaria Group (EMR)