staf12 Oct 2013 00:01
When a company promises to treble its profits in five years, you would be forgiven for taking that with a large pinch of salt. But in Staffline's (STAF) case, the management's track record suggests this is a promise to be taken seriously. The training and recruitment company has trebled in size twice already since its 2004 listing and is targeting a near trebling of 2012 underlying profit before tax to £30m by 2017. This target is not predicated on an economic recovery; nor does it assume growth by acquisition. Rather, the company has identified opportunities for growth and is positioning itself to be in the right place at the right time.
Staffline's core business is the supply of mainly blue-collar workers through its OnSite model, which accounts for 85 per cent of total revenues. The OnSite model, in which Staffline has a team based at its clients' premises, allows Staffline to build an embedded position that generates plenty of repeat business. Staffline currently supplies staff to the distribution centres of every major high street supermarket chain, many leading UK manufacturers and is one of the UK's largest suppliers of food industry staff.
But while the OnSite model provides the bread and butter, a growing presence in other, newer activities provides the jam. The acquisition in 2011 of Eos took Staffline into the Welfare to Work segment; a government scheme that helps the long-term unemployed back into the job market. Eos, whose contract covers Birmingham, Solihull and the Black Country, has been ranked the best performing contract of the 40 work programme contracts across the UK. And the contract is now cash positive with the division moving into profit during the first half. Given Eos's strong performance on its current contract, it looks well-placed to grab further work from underperforming peers in this space.
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