UPDATE: Randstad Expects Healthy Growth In Staffing Markets
October 28 2010 - 4:15AM
Dow Jones News
Dutch staffing group Randstad Holding NV (RAND.AE) said Thursday
it expects healthy growth in coming months as it reported an 18%
rise in third-quarter net profit due to a strong recovery in most
of its markets.
Randstad, which generates the bulk of its revenue in Western
Europe and the U.S., said that the recovery is robust and that it
expects "continued healthy growth" in the fourth quarter.
"The worldwide human resources services markets show cyclical
and structural growth trends," the company said in a statement.
This echoed comments from Swiss rival Adecco SA (ADEN.VX), the
world's biggest temporary staffing agency by sales, which last
month gave a similarly upbeat outlook and said it didn't see any
signs of a slowdown. U.S. peer Manpower Inc. (MAN) last week also
flagged encouraging trends in most of its markets.
Staffing companies were hit hard by the economic downturn as
companies cut staff in order to reduce their costs. This year has
seen a pickup in demand, although concerns remain. Some analysts
say growth may come to a halt in coming months due to the ongoing
uncertain economic prospects in the U.S. and Europe.
However, Randstad says it also creates opportunities as
companies, still recovering from the downturn, are reluctant to
hire permanent workers and instead opt to hire temporary staff.
The Diemen-based company, the world's second-largest staffing
firm by sales after Adecco, said net profit rose 18.4% to EUR70.2
million in the third quarter from EUR59.3 million a year
earlier.
Revenue rose 19% to EUR3.78 billion, with growth mainly coming
from Germany, the U.S. and the industrial and logistics sectors.
Randstad said that the late-cyclical white-collar segment, a more
lucrative business where the major staffing companies are pushing
to expand, is also showing improvement.
In the Netherlands, where Randstad generates about one-fifth of
total revenue, sales were still down due to the late-cyclical
nature of the country's economy, the company said. But the Dutch
market is slowly recovering and Randstad recorded organic growth
here in September, Chief Financial Officer Robert-Jan van de Kraats
told Dow Jones Newswires, without specifying.
Earnings before interest, taxes and amortization, or Ebita, a
figure closely watched by analysts to gauge operational
performance, rose 64% to EUR153 million.
Analysts said Randstad's results confirmed market trends in the
past months and noted that the outlook contained few surprises.
"Staffing markets continue to grow buoyantly," SNS Securities
analyst Frank van Wijk said in a report. "These conditions bode
well for Randstad and should result in another solid quarter," he
said.
At 0726 GMT, Randstad shares were up 0.7% at EUR35.24, slightly
higher than the AEX market in Amsterdam which was up 0.3%.
- By Maarten van Tartwijk; Dow Jones Newswires; +31 20 571 5201;
maarten.vantartwijk@dowjones.com
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