UPDATE: Randstad Expects Healthy Growth In Staffing Markets

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

Randstad NV (EU:RAND)
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