Last checked at 18 Jun 2009 07:00
18 June 2009
Empresaria Group plc
AGM Statement
At today's Annual General Meeting of Empresaria Group plc ("Empresaria" or "the Group"), the international specialist staffing group, the Board will make the following statement:
Group strategy is to develop an international specialist staffing group balanced by geography and sector and with a strong emphasis on temporary staffing operations. There are two drivers behind this strategy; to gain access to higher growth economies and staffing markets, and to reduce the risks inherent in cyclical markets and volatile economies through diversification and focus on more stable revenue streams. In 2008, 60% of net fee income was derived from markets outside the UK. The Group now operates in 20 countries and generates over 75% of its net fee income from temporary staffing operations.
Our focus on developing markets and economies has alleviated some of the downward pressure on revenues and margins, and the management equity philosophy that underpins Group strategy ensures that we have motivated management teams showing flexibility, creativity and commitment in tackling more difficult market conditions.
Revenues for the current financial year to April, excluding discontinued operations, are 4% down on the same period in 2008 and net fee income is down 22% on the same period. These volume reductions are driven largely by reductions in permanent fee income levels (34% down at the end of April) with temporary revenues remaining consistent with the previous year. Declines in temporary revenues within Continental Europe, particularly Germany where we have some exposure to the manufacturing sector, have been offset by growth in other markets. It is encouraging to note that temp numbers have been growing again in Germany since mid-April.
Not all markets and economies have experienced material change. We continue to see growth in our Property Services operations in the UK, driven largely by demand within the infrastructure and transport environment, as well as for our healthcare operations in Scandinavia, our engineering and logistics divisions in Germany, our outsourcing operations in South America and within certain developing economies in Asia.
To combat the reduction in Group net fee income we have been reducing overheads, closing or selling off a number of poorly performing branches and operations and holding back on investment activity and capital expenditure.
In addition to reducing costs we have also raised approximately £2.7m, net of expenses, through the issue of new shares in May this year. The rationale behind the new share issue was to provide the financial flexibility to support our growing businesses in emerging markets as well as strengthen the Group in anticipation of the eventual market upturn.
Although we are not seeing any dramatic improvement in specific economies and markets, there is evidence in recent weeks of increased market stability and in some cases of improved levels of confidence reflected in increased numbers of enquires, vacancies, job orders and in temporary staffing revenues. Our business, due to seasonality, is heavily weighted towards the second half of the year. With a reduced cost base and assuming a continuation of these early signs of increased market stability, the Board's expectations for the full year remain unchanged.
For further information contact:
| Miles Hunt |
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| Chief Executive, Empresaria Group plc | 01293 649 900 |
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| Stuart Kilpatrick |
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| Finance Director, Empresaria Group plc | 01293 649 900 |
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| Nicholas How |
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| Singer Capital Markets Limited | 020 3205 7620 |
Notes for editors:
About Empresaria
*Empresaria operates out of 20 countries and approximately 135 offices and has over 1,000 internal staff.
*60% of the Group's net fee income is generated outside the UK, and over 75% of net fee income is generated from temporary and contract business
*Empresaria applies a management equity philosophy and business model with each group company management team holding significant equity in its own business