Revenue rises but profit falls for Staffline

Recruitment and training company Staffline Group reported 2023 revenue of £938.2m in an update on Tuesday, up 1.1% year-on-year, with gross profit at £80.8m, which was down 2.1%.

The AIM-traded firm said its gross profit margin dipped 0.3 percentage points to 8.6%, while underlying operating profit slid 15.8% to £10.1m and net cash pre-IFRS 16 stood at £3.8m, surpassing market expectations by £6.8m.

Net debt came in at £0.7m, swinging from net cash of £0.1m at the end of 2022.

The company said its Recruitment GB division delivered results comparable to the prior year, outperforming the broader recruitment sector.

Efficient cost management and market share gains offset weak demand and lower permanent recruitment fees.

Recruitment Ireland meanwhile saw a solid performance, despite challenges in Northern Ireland, as it secured a significant contract with the Republic of Ireland's Garda for 2024.

PeoplePlus's skills training division underwent restructuring, transitioning to digital training, and was reported as ‘discontinued’ in the 2023 results.

The core sectors of justice and employability continued to perform well.

Looking ahead to 2024, Staffline said it foresaw progress in its recruitment businesses, with the PeoplePlus division undergoing transformation and focusing on core markets.

Despite macroeconomic uncertainties, Staffline said it was confident in its ability to increase market share and seize opportunities as the economic recovery unfolded.

The renegotiation of banking facilities in the fourth quarter of 2023 reflected a strengthened balance sheet and reduced borrowing costs, effective from January.

“I am grateful for the commitment and support of the thousands of hard-working staff who are responsible for delivering this resilient result,” said chief executive officer Albert Ellis.

“I am delighted too, with the comparatively strong trading performance we achieved in 2023, despite facing significant macroeconomic challenges during the year.

“Our healthy balance sheet has enabled us to support organic growth and ensure we delivered labour at scale, to significant customers, such as GXO Logistics, Tesco and M&S during times of seasonal peak demand.

“I firmly believe there is significant growth potential and, as inflation and pressure on labour markets begin to ease, remain optimistic about the prospects for further organic growth generated from within the group.”

At 0834 GMT, shares in Staffline Group were down 8.16% at 22.5p.

Reporting by Josh White for Sharecast.com.