TIDMSTAF
RNS Number : 5285A
Staffline Group PLC
23 January 2024
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the
publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
23 January 2024
STAFFLINE GROUP PLC
("Staffline", the "Company" or the "Group")
Trading Update
&
Notice of Results
-- Robust performance delivered full year Underlying operating
profit in-line with market expectations(1)
-- Net cash (pre-IFRS 16) significantly ahead of market
expectations maintaining ongoing balance sheet strength that
underpinned GBP5 million share buyback programme in 2023
Staffline, the recruitment and training group, provides the
following trading update for the year ended 31 December 2023 ('FY
2023'), as well as the outlook for 2024 ('FY 2024').
Financial Highlights(2)
FY 2023 FY 2022 Change
Revenue GBP938.2m GBP928.2m +1.1%
---------- ---------- ---------
Gross profit GBP80.8m GBP82.5m -2.1%
---------- ---------- ---------
Gross profit margin % 8.6% 8.9% -0.3%pts
---------- ---------- ---------
Underlying operating profit(3) GBP10.1m GBP12.0m -15.8%
---------- ---------- ---------
Gross profit to operating
profit conversion % 12.5% 14.5% -2.1%pts
---------- ---------- ---------
Net cash (pre-IFRS 16) GBP3.8m GBP5.0m -GBP1.2m
---------- ---------- ---------
Net (debt)/cash (post-IFRS GBP(0.7)m GBP0.1m -GBP0.8m
16)
---------- ---------- ---------
(1) Company-compiled consensus for FY 2023 underlying operating
profit and Net debt (pre-IFRS 16), based on the mean average of two
analyst estimates, stands at GBP10.15m and GBP3.0m,
respectively.
(2) Presented on a continuing basis. These figures are unaudited
and provisional.
(3) Underlying results exclude goodwill impairment, amortisation
of intangible assets arising on business combinations,
reorganisation costs and other non-underlying charges.
Highlights
-- Delivered Underlying operating profit in line with market
expectations (1) against challenging trading conditions in FY
2023
-- Net cash (pre-IFRS 16) of GBP3.8m (2022: GBP5.0m), ahead of
market expectations by GBP6.8m; strong trading cashflow supported
GBP5m share buyback programme during FY 2023
-- Revenue up 1.1% highlighting market share gains predominately
in Recruitment GB, with H2 2023 revenues up by 3.7%
-- Gross profit down in the Recruitment businesses by 1.1%,
which compares favourably to the recruitment market in general,
driven by lower permanent recruitment fees
-- Refinanced banking facilities with improved terms in Q4 2023,
reflecting progress in the business and ongoing balance sheet
strength
Staffline is pleased to report a robust trading and cashflow
performance for FY 2023, particularly in its Recruitment GB
division, against a challenging macroeconomic backdrop in the UK.
Underlying operating profit for the period was in line, and strong
cash flow was well ahead of market expectations (1) , underpinning
a GBP5m share buy back programme during FY 2023, as well as
management-initiated efficiency and overhead reduction
programmes.
The Group's banking facilities, renegotiated during Q4, reflect
the strengthened balance sheet and solid trading results, and will
result in reduced borrowing costs, effective from January 2024.
Recruitment GB
Full year results were broadly similar to the prior year, which
compares favourably to the wider recruitment sector, driven by
market share gains combined with additional streamlining and tight
control of the cost base. Weak demand in H1 2023 and lower
permanent fees throughout the year held back the strong underlying
trading result achieved in the second half. During 2023, the
business took focused actions to reduce costs, which will deliver
c.GBP3.0m of annualised savings . As a result, a non-underlying
restructuring charge of c.GBP1.8m was incurred.
The division benefitted, particularly in H2 2023, from its
strategy of driving organic growth, expanding key strategic
partnerships with GXO Logistics, AM Fresh Group, Sainsbury Argos
and Morrisons, whilst also renewing contracts with key customers
such as Tesco and M&S across the year. This contributed to the
traditional H2 trading peak in the run up to Christmas delivering
in line with expectations, supporting a strong H2 2023 result.
Recruitment Ireland
Recruitment Ireland reported a solid performance with a
challenging market in Northern Ireland in contrast to the Republic
of Ireland. With an historically higher exposure to the
white-collar permanent hiring market than Recruitment GB,
underlying operating profit was more affected by lower levels of
demand as well as local political uncertainty. However, during Q4
2023 the business secured a significant contract win with the
Republic of Ireland's Garda which commences in 2024.
PeoplePlus
As previously reported, PeoplePlus's Skills training division
was restructured during the year, with a shift away from in-person
classroom-based training to focus on digital training.
Consequently, these results are disclosed as being "Discontinued"
in our FY 2023 results. Its core sectors of Justice and
Employability (including Restart) continued to deliver. However, a
number of recent profitable contracts have come to a natural end,
alongside a quieter commissioning period. Although the near-term
bid pipeline is substantial, any benefit will only be expected to
flow into the Group from 2025 and beyond.
Outlook
The Group's recruitment businesses will deliver progress into
2024 despite widely reported headwinds in the sector. In
PeoplePlus, political uncertainty, low levels of unemployment and
the impact of new contract revenue streams only flowing from
2025/6, will reduce short term profitability by around two thirds,
in 2024, versus expectations. The division is, however, now
transformed with a more efficient cost base and new management,
focusing on its two core markets, Justice and Employability, where
it has good market share and strong prospects.
Despite the macro uncertainty, the Board remains confident that
the Group's extensive scale and reach, coupled with its proven
track record of exceptional delivery, will continue to increase its
market share and maximise opportunities as the economic recovery
unfolds.
Albert Ellis, Chief Executive Officer of Staffline,
commented:
"I am grateful for the commitment and support of the thousands
of hard-working staff who are responsible for delivering this
resilient result.
I am delighted too, with the comparatively strong trading
performance we achieved in FY 2023, despite facing significant
macroeconomic challenges during the year. Our healthy balance sheet
has enabled us to support organic growth and ensure we delivered
labour at scale, to significant customers, such as GXO Logistics,
Tesco and M&S during times of seasonal peak demand.
I firmly believe there is significant growth potential and, as
inflation and pressure on labour markets begin to ease, remain
optimistic about the prospects for further organic growth generated
from within the Group."
Investor Call
Management will be hosting a short presentation and Q&A for
investors and analysts at 8.30 a.m. on Tuesday, 23 January 2024.
The presentation will be hosted on the Investor Meet Company
digital platform.
To register for the event please visit:
https://www.investormeetcompany.com/staffline-group-plc/register-investor
Notice of Results
The Group expects to report its results for FY 2023 on Tuesday,
19 March 2024.
For further information, please contact:
Staffline Group plc via Vigo Consulting
www.stafflinegroupplc.co.uk
Albert Ellis, Chief Executive Officer
Daniel Quint, Chief Financial Officer
Liberum (Nominated Adviser and Broker)
www.liberum.com
Richard Lindley
Satbir Kler 020 3100 2222
Zeus (Joint Broker)
www.zeuscapital.co.uk
David Foreman (Investment Banking)
Nick Searle (Sales) 020 3829 5000
Vigo Consulting (Financial PR) 020 7390 0230
www.vigoconsulting.com Staffline@vigoconsulting.com
Jeremy Garcia / Verity Snow
About Staffline - Recruitment, Training and Support
Enabling the Future of Work(TM)
Staffline is the UK's market leading Recruitment and Training
group. It has three divisions:
Recruitment GB
Staffline is a leading provider of flexible blue-collar workers,
supplying c.31,000 staff per day from around 400 sites, across a
wide range of industries including supermarkets, drinks, driving,
food processing, logistics and manufacturing.
Recruitment Ireland
The Recruitment Ireland business is a leading end to end
solutions provider operating across twenty industries, ten branch
locations and ten onsite customer locations, supplying c.4,500
staff per day, and offering RPO, MSP, temporary and permanent
solutions across the island of Ireland.
PeoplePlus Division
Staffline is the leading adult skills and training provider in
the UK, delivering adult education, prison education and
skills-based employability programmes across the country.
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END
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