REG - Empresaria Group PLC - Trading Update and Notice of Results

EmpresariaAnnouncement

25/07/2024 07:00

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RNS Number : 7385X  Empresaria Group PLC  25 July 2024

25 July 2024

 

Empresaria Group plc

("Empresaria" or the "Group")

 

Trading Update and Notice of Results

 

 

Encouraging resilience in temporary and contract despite ongoing challenging
market conditions

Empresaria (AIM: EMR), the global specialist staffing group, today provides a
trading update ahead of announcing its interim results on 20 August 2024.

 

Trading update

 

 ·                     H1 revenue up 4% against prior year in constant currency, excluding exited

                     operations (CC LFL), reflecting relative strength in temporary and contract.
                       Reported revenue down 3% to £121.8m.
 ·                     H1 net fee income down 9% year-on-year CC LFL, largely driven by a fall in
                       permanent placement.  Reported net fee income down 15% to £25.3m.
 ·                     Adjusted net debt increased to £13.5m (31 December 2023: £11.1m).
 ·                     Full year adjusted results are expected to be in line with current market
                       expectations although market conditions remain challenging.

 

The industry-wide weakening of demand and slowing of hiring decisions, that
started in late 2022 and persisted across 2023, continued through the first
half of 2024. This has impacted results across the Group with each of our
regions showing a year-on-year decline in net fee income for the first half of
the year. Permanent recruitment has been most heavily impacted with net fee
income down 21% CC LFL (reported figure down 27%). Temporary and contract
performed relatively strongly with net fee income down 1% CC LFL (reported
figure down 8%), while Offshore Services, which delivered a record year in
2023, reduced by 10% CC (reported figure down 14%). The reduction in Offshore
Services was driven by a fall in UK Healthcare at the end of 2023 and at the
start of 2024 due to the NHS looking to reduce agency spend, a situation that
has now stabilised.  Offshore Services demand remains muted across both the
UK and US, reflecting the current reliance on its recruitment industry client
base, however our pipeline is strong.

 

As part of our focus on our core sectors and reducing the complexity of the
Group, we announced in March our intention to exit four of our smaller
operations in markets or sub-sectors where we do not plan to invest. In the
first half of 2024 we have sold our loss-making Healthcare operation in
Finland and closed our Professional operation in China.

 

We continue to maintain tight control of our cost base, with administrative
costs for the first half of 2024 down £2.3m CC LFL on the prior year, while
at the same time protecting our core consultant base to ensure we are
positioned to take advantage when the market recovers.

 

Financial position

 

Adjusted net debt as at 30 June 2024 increased to £13.5m (31 December 2023:
£11.1m) reflecting the trading results, normal H1 cash flows such as
dividends, and a working capital outflow driven by an increase in trade
debtors in Germany as a result of the issue highlighted in the paragraph
below. Headroom remains strong at £10.5m.

 

We note the announcement on 16 July by weLOG, a significant client of the
Group in Germany, regarding its entry into provisional self-administration in
order to restructure its business. We are in discussions with weLOG regarding
the recoverability of outstanding amounts which at 30 June 2024 stood at
€3.5m (excluding recoverable sales taxes). Given the potential size of this
item, it is anticipated that any associated write-off would be treated as
exceptional in the Group's financial statements and therefore excluded from
adjusted results presented.

 

Rhona Driggs, CEO of Empresaria, commented:

 

"Ongoing market conditions remain challenging across the industry and no
significant improvement is expected in 2024. Permanent recruitment continues
to see longer cycle times, lower acceptance rates and reduced demand as client
and candidate confidence remains subdued. We are seeing improved demand in our
temporary and contract business in some markets and sectors and this is
reflected in more resilient year-on-year net fee income performance.

 

In our core sectors of Professional, IT and Healthcare, we have streamlined
our operating structure, fully implemented our dedicated sales and delivery
model, and have rolled out additional technology enhancements. These actions
will help us to improve productivity and drive scale in these sectors.

 

With our strong operational leaders and our continued focus on reducing
complexity in the Group, we feel confident in our ability to navigate the
current market environment and maximise our growth when the market recovers."

 

Investor presentation

 

In line with Empresaria's commitment to ensuring appropriate communication
structures are in place for all sections of its shareholder base, management
will deliver an online results presentation open to all existing and potential
investors via the Investor Meet Company platform on Tuesday 20 August 2024 at
12:00pm UK time.

 

Questions can be submitted pre-event through the platform or at any time
during the live presentation.  Management may not be in a position to answer
every question it receives but will address those it can while remaining
within the confines of information already disclosed to the market.

 

Q&A responses will be published at the earliest opportunity on the
Investor Meet Company platform.

 

Investors can sign up for free via:
https://www.investormeetcompany.com/empresaria-group-plc/register-investor
(https://www.investormeetcompany.com/empresaria-group-plc/register-investor) .
Those who have already registered and requested to meet the Company will be
automatically invited.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.

 

- Ends -

 

Enquiries:

 Empresaria Group plc                                         via Alma PR
 Rhona Driggs, Chief Executive Officer

Tim Anderson, Chief Financial Officer
 Singer Capital Markets (Nominated Adviser and Joint Broker)  020 7496 3000
 Shaun Dobson / Alex Bond

 Cavendish Capital Markets Limited (Joint Broker)             020 7220 0500
 Katy Birkin (Corporate Finance)

Michael Johnson / Jasper Berry (Sales)
 Alma Strategic Communications (Financial PR)                 020 3405 0205
 Sam Modlin / Rebecca Sanders-Hewett / Will Merison
empresaria@almastrategic.com

 

Notes for editors:

§ Empresaria Group plc is a global specialist staffing group. We are driven
by our purpose to positively impact the lives of people, while delivering
exceptional talent to our clients globally. We offer temporary and contract
recruitment, permanent recruitment and offshore services across six sectors:
Professional, IT, Healthcare, Property, Construction & Engineering,
Commercial and Offshore Services.

 

§ Empresaria is structured in four regions (UK & Europe, APAC, Americas
and Offshore Services) and operates from locations across the world including
the four 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 visit
empresaria.com.

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