Prime People profits more than doubled under new accounting policy

Prime People reported on Monday that its interim profits doubled following the adoption of new accounting standards, although management remained cautious due to "the uncertainties" hanging over UK markets.

For the six-month period ended 30 September, profit before tax increased by 146% to £1.6m versus the same period one year before as revenue increased by 12% to £12.6m and sales costs fell by 11% to £4.6m.

New accounting standards mean the company reported revenue based on invoices delivered, instead of value of contracts formed, and that if using the previous accounting standard and adjusted for the contribution from recently-acquired business Command Recruitment, profit growth would have been flat.

The AIM traded recruiter's cash and cash equivalents stood at £1.8m at 30 September, down from £2.6m at the same point last year.

Robert Macdonald, executive chairman of Prime People, said: “Given the uncertainties of UK markets through to March 2019 and potentially beyond, we do not expect the second half trading to exceed the first half. We expect underlying trading from our Asia offices to be comparable to the first half of this financial year.”

Macdonald added that the group’s current focus is managing business costs in relation to revenue, improving productivity and increasing profitability.

Prime People’s shares were down 1.96% at 75.00p at 1628 GMT.