Global markets and headcount issues see Nakama report loss

Recruitment consultancy Nakama saw its group revenue rise 7% to £22.5m in the year to 31 March, it reported in its preliminary results on Friday, as its net fee income improved 8% to £6.19m.

The AIM-traded company said its net fee income percentage increased to 27.5% from 27.3%, and claimed that revenue across the Asia-Pacific region was up 27% to £8.82m.

It still made a loss for the year, however, of £0.27m, having broken even in the 2016 financial year.

“As we advised on 20 June, we had been expecting a stronger second half performance, however fluctuations in headcount that we had seen in the first half and inconsistency in some of the global markets of our businesses meant that it regrettably took longer than expected to correct and the knock-on effect led to a slower than anticipated recovery, as reflected in the results,” explained CEO Rob Sheffield.

“The business has benefitted from the infrastructure improvements over the past 12 months and we have seen improvements in efficiency of operations.

“The business will continue to invest in improving and increasing the consistency and output of its sales staff globally and ensuring that cost savings and improvements are implemented through the use of technology.”

Sheffield said that from a wider perspective, while organic growth in the short to medium term would serve the business well for it to meet long-term objectives, the board would and had continued its efforts to identify suitable businesses to join the group in a bid to enhance profitability, add new service lines and expand into new geographies.

He said that included identifying businesses within the staffing and technology space that provided the use of technology platforms and human capital services.

“Trading in the first two months of the current financial year is ahead of the same period last year,” Rob Sheffield added.

“Whilst the market sectors in which Nakama operates are in high demand, the business needs stable local economies in the current trading locations, stability in current staff numbers and the continued hiring of new sales staff, to deliver against less specialised, but much larger competitors.

“The board looks to 2018 as a year in which the group will continue to grow organically in terms of net fee income and profit, whilst reviewing other options to build scale in its core markets.”