(Alliance News) - Staffline Group PLC on Tuesday launched a GBP4.0 million share buyback, saying "the current time presents a good opportunity to make share purchases", amid underlying profitability and a downward trend in average borrowings.
Staffline shares were up 5.1% at 26.75 pence in London at midday.
The buyback announcement came as the Nottingham, England-based recruitment and training firm reported half-year results. Its pretax loss widened to GBP4.3 million in the six months that ended June 30 from GBP1.0 million a year before, as revenue slipped by 0.9% to GBP434.1 million from GBP438.0 million.
Staffline booked GBP2.4 million in underlying operating profit, though this was down 40% from GBP4.0 million in the first half of 2022, as gross margin narrowed to 8.8% from 9.1%.
However, the company said underlying operating profit for the full year will be in line with market expectations. It expects "significant improvement" in the second half, in line with the normal season weighting of its Recruitment division.
Staffline announced that long-term customer GXO Logistics Inc has awarded Recruitment GB a contract to supply temporary labour for a further 14 distribution centres in the UK serving "several major High Street brands".
"Whilst the outlook for permanent recruitment is more subdued, a number of new temporary staffing contract opportunities are currently in the pipeline, in addition to the seasonal boost expected in the final half of the year including the Women's Football and Men's Rugby World Cups," said Chief Executive Officer Albert Ellis.
Significantly, net debt was reduced to GBP3.5 million as of June 30 from GBP9.7 million a year before.
The buyback will be Staffline's only shareholder return so far this year. It declared no interim dividend, unchanged from a year before.
By Tom Waite, Alliance News editor
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Staffline (STAF)