TIDMEMR
RNS Number : 2226B
Empresaria Group PLC
29 January 2020
29 January 2020
Empresaria Group plc ("Empresaria" or the "Group")
Trading Update and Notice of Results
Operational changes made to build a strong base for future
growth, profit in line with market expectations
Empresaria (AIM: EMR), the global specialist staffing group,
today provides a trading update for the financial year ended 31
December 2019 ahead of announcing its full year results on
Wednesday 18 March 2020.
The Board confirms that it expects the Group to deliver results
in line with current market expectations for the financial year
ended 31 December 2019.
Net fee income has grown 3% from the prior year, 2% in constant
currency. As expected, net fee income progress was weighted towards
the first half of the year with the second half flat year on year.
The growth in businesses such as in our Offshore Recruitment
Services sector, which has had another very strong year, has been
offset by the impact of the previously communicated challenges in
UK Engineering, the weakness in the German automotive sector and
Brexit.
Net fee income by sector for the year ended 31 December is as
follows:
% change
(constant
GBPm 2019 2018 % change currency)*
------------------------------- ------ ------ --------- ------------
Professional 27.3 26.8 +2% +1%
IT 14.4 13.6 +6% +3%
Healthcare 2.8 2.7 +4% +2%
Property, Construction and
Engineering 3.8 5.3 -28% -28%
Commercial 19.7 19.2 +3% +3%
Offshore Recruitment Services 7.0 5.1 +37% +37%
Intragroup (0.5) (0.4) - -
------------------------------- ------ ------ --------- ------------
Total 74.5 72.3 +3% +2%
------------------------------- ------ ------ --------- ------------
* The constant currency movement is calculated by translating
the 2018 results at the 2019 exchange rates.
** The Group has made further revisions to its sectors during
the second half of the year to reflect actions taken in the UK
Engineering business and to separately show the Group's healthcare
operations which are expected to be a strong driver of future
profit growth.
The Group's Professional sector has seen a small increase in net
fee income despite the adverse impact of Brexit, particularly on
those UK businesses that operate in the financial services and new
home sales markets. Additionally, our aviation business is now
seeing an adverse impact from the grounding of the Boeing 737 Max
and an ongoing reduction in demand for new pilots from a large
client which will continue to impact through 2020. As we
communicated in October we restructured and merged our
marketing/creative business under our professional services
business. This change is expected to drive both cost and sales
synergies and enable us to create greater size and scale in this
business.
The Group's IT sector has shown an increase in net fee income,
more than offsetting the challenges of rebuilding the temp base in
Japan following the regulatory changes in 2018. We are investing in
growing our presence in the US temp market and in strengthening our
position in temp in the UK in order to ensure we are well placed to
deliver future growth.
The Healthcare sector has shown positive growth in the second
half of the year after a weaker first half with management and
business model changes implemented during the year starting to have
an impact.
The previously announced material restructuring of the Group's
Property, Construction and Engineering sector is now complete
resulting in the closure of the majority of the UK Engineering
business. We have retained selected profitable elements and
incorporated these into another of our UK businesses which will now
have a broader service offering and more potential to expand.
Future growth and investment in this sector will be focused on the
skilled, white collar end of the market where we see greater
opportunity. This sector is expected to return to profit in 2020 as
a result of the actions taken.
The Group's Commercial sector has a significant presence in
Germany where the focus has been on rebuilding the temp base
following the changes in legislation in 2018. This has been
progressing well but has been offset by the impact from the weaker
German automotive sector which represents a key market. The Group's
investment in Peru in July 2018 contributed a full year's result
for the first time and accounts for a GBP1.0m increase in net fee
income over 2018.
The Group's Offshore Recruitment Services sector has continued
to build on the strong growth of 2018 with another year of
significant growth in 2019. We believe this sector will be a key
driver of future growth for the Group and we will be investing in
2020 to enable it to deliver on its growth potential.
Adjusted profit before tax is anticipated to be in line with
market expectations at GBP9.3m (2018: GBP11.4m). Adjusted profit
before tax is stated before exceptional costs incurred as a result
of the significant operational change made during the year
including the restructuring of our UK Engineering business and
costs associated with the change of CEO in June 2019. The reduction
in adjusted profit before tax reflects the impact of the material
declines in the UK Engineering business along with the impact of
Brexit in the UK and the slowdown of the German automotive
sector.
Adjusted net debt at 31 December 2019 is GBP19.1m, an increase
of GBP2m on the prior year reflecting the investment in additional
shares in our UK and US IT business for consideration of GBP3.5m,
the reduction in profits, and costs associated with the significant
operational changes made in the year.
Rhona Driggs, CEO of Empresaria, commented:
"We have delivered results for the year in line with
expectations as stated in October, with growth in net fee income
for the year despite a challenging trading environment. We have
made a number of significant operational changes in 2019 and have
identified further key areas for operational improvement and
investment in 2020 in order to build a stronger base for future
growth and deliver an improved financial performance. While we
invest in positioning the business for future growth in net fee
income and profitability, our diversity across sectors and
geographies continues to provide a strong, profitable and cash
generative foundation from which to build."
Enquiries:
Empresaria Group plc via Alma PR
Rhona Driggs, Chief Executive Officer
Tim Anderson, Chief Financial Officer
Arden Partners (Nominated Adviser and
Broker)
John Llewellyn-Lloyd
Ciaran Walsh 020 7614 5900
Alma PR (Financial PR) 020 3405 0205
Rebecca Sanders-Hewett empresaria@almapr.com
Sam Modlin
Hilary Buchanan
David Ison
Notes for editors:
-- Empresaria Group plc is a global specialist staffing group
offering temporary and contract recruitment, permanent recruitment
and offshore recruitment services across 6 sectors: Professional,
IT, Healthcare, Property, Construction and Engineering, Commercial
and Offshore Recruitment Services.
-- Empresaria operates in 20 countries across the world
including the 4 largest staffing markets of the US, Japan, UK and
Germany along with a strong presence elsewhere in Asia Pacific and
Latin America.
-- Empresaria is listed on AIM under ticker EMR. For more
information: empresaria.com
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END
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