TIDMEMR
RNS Number : 8253G
Empresaria Group PLC
29 July 2021
29 July 2021
Empresaria Group plc
("Empresaria" or the "Group")
Trading Update and Notice of Results
Strong recovery in profits and investment in future growth
Empresaria (AIM: EMR), the global specialist staffing group,
provides a trading update ahead of announcing its interim results
for the six months ended 30 June 2021 on Thursday 12 August
2021.
Trading update
-- H1 profits expected to be significantly ahead of prior year
-- H1 net fee income up 1% on 2020 (up 4% in constant currency) with Q2 up 30% and Q1 down 19%
-- Net debt increased to GBP16.5m (31 December 2020: GBP13.6m)
reflecting working capital outflows as activity levels increased,
with headroom remaining strong at GBP12.4m
-- Operational investment accelerated with appointment of highly
experienced industry leadership to regional management roles
The ongoing recovery in net fee income resulted in the second
quarter being 30% ahead of 2020 with overall first half net fee
income up 1% on 2020 (up 4% in constant currency) and profits
expected to be significantly ahead of prior year. Net fee income
was down in the first quarter against prior year reflecting the
Group's strong start to 2020 before the impact of COVID-19.
The Group has invested in its senior management structure with
the appointment of Regional CEOs for APAC and for the UK &
Europe and we will be announcing the appointment of a Regional
President for North America in the coming week. The addition of
these proven industry leaders will help the Group accelerate the
implementation of its strategy and growth plans.
Financial position
Adjusted net debt at 30 June 2021 was GBP16.5m, a GBP2.9m
increase since 31 December 2020. The increase is driven by the
higher activity levels as net fee income improved, resulting in
increased working capital requirements. Headroom has reduced
reflecting these working capital changes but remains strong at
GBP12.4m (31 December 2020: GBP17.6m).
Performance by sector
Net fee income by sector for the six months ended 30 June:
% change
(constant
GBPm 2021 2020 % change currency)*
-------------------------------------- ------ ------ --------- ------------
Professional (excluding aviation) 7.7 7.1 +8% +10%
Aviation 0.5 1.7 -71% -72%
-------------------------------------- ------ ------ --------- ------------
Professional (total) 8.2 8.8 -7% -7%
IT 6.5 6.7 -3% +2%
Healthcare 2.2 1.2 +83% +100%
Property, Construction & Engineering 0.4 0.4 -% -%
Commercial 8.4 8.0 +5% +8%
Offshore Recruitment Services 3.2 3.4 -6% +3%
Intragroup (0.5) (0.3)
-------------------------------------- ------ ------ --------- ------------
Total 28.4 28.2 +1% +4%
-------------------------------------- ------ ------ --------- ------------
* The constant currency movement is calculated by translating
the 2020 results at the 2021 exchange rates.
Excluding aviation, the Group's Professional sector had a strong
first half with net fee income up 8% reflecting good performances
across the sector and a 59% increase in net fee income in the
second quarter compared to 2020. Our aviation recruitment business
continues to see very subdued demand with net fee income down more
than 70% against 2020. We continue to be cautious on the speed of
recovery of this business but are confident that it continues to
have good growth potential in the medium and long term.
The Group's IT sector has seen a 3% fall in net fee income
compared to the first half of 2020, although in constant currency
net fee income was up 2%. This, in part, reflects a strong
comparative performance with a delayed impact on net fee income
from COVID-19 in 2020. The second quarter was up 5% on 2020. Our
business in Japan has performed particularly well in 2021
delivering net fee income ahead of the prior year.
The Group's Healthcare sector has performed extremely strongly
in 2021 with net fee income 83% ahead of the first half of 2020.
The COVID-19 vaccination and testing programmes were identified as
a key area of opportunity and our investment in delivering to these
programmes has been the key driver of the sector's performance as
demand has peaked through the first half of 2021. We would expect
this sector to return to more normal levels of activity in the
second half as the COVID-19 related demand in our markets slows
down.
The Group's Property, Construction & Engineering sector is
flat year on year and continues to see low levels of demand,
particularly in our business supplying sales staff to the new home
sector which has continued to operate under COVID-19 restrictions,
limiting the demand for temporary staff. We are looking to
diversify the business as well as positioning ourselves for when
the market recovers.
The Group's Commercial sector has had a mixed first half with
net fee income up 5% on 2020, with the second quarter up by 17%. We
have seen good recovery in our operations in Chile and in our
temporary staffing businesses in Germany and Austria. However, our
logistics business in Germany, which had a very strong 2020, has
seen a fall in net fee income. While demand remains strong it has
become increasingly difficult to fill these lower paid roles as the
wider economy recovers and there have been increased challenges in
attracting candidates into Germany from Eastern Europe.
In Offshore Recruitment Services net fee income has reduced by
6%, primarily driven by foreign currency fluctuations and the exit
from our loss-making operation in Dubai with effect from 1 January
which contributed GBP0.4m of net fee income in 2020. Excluding
these factors, net fee income increased and our operation in India,
which recovered strongly in the second half of 2020, has continued
to grow with high demand from clients in both the UK and the US.
Our headcount in this business is now at a record high with more
than 1,500 employees at 30 June.
Rhona Driggs, CEO of Empresaria, commented:
"We have had a positive start to 2021 with a strong recovery in
profits after an extremely challenging 2020. This is testament to
the resilience of our people and businesses and a result of the
operational initiatives and investments we have made over the last
two years.
We have made key senior appointments in the last few months
bringing in individuals with proven track records and significant
industry experience. Our ability to attract top talent illustrates
our potential and ambition and these appointments to our senior
management team will be key in helping us deliver on our growth
strategies.
Despite the positive demand, there remain ongoing challenges in
some of our key markets and sectors. Given the broad global
footprint of the Group and the varying impact in each market we
expect COVID-19 to remain a challenge in the short term. In
addition, industry data tells us that while global hiring optimism
is returning to pre-pandemic levels the talent shortages are at
their highest for 15 years. Our investments in technology are going
to be critical in enabling us to deliver in this environment.
This year marks our 25th anniversary but, in many ways, we have
only just begun our journey. The acceleration of operational
improvements and key leadership appointments means we are better
placed than ever to realise the exceptional potential of the
Group."
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 Thursday 12 August 2021 at 4:30pm
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.
Those who have already registered and requested to meet the Company
will be automatically invited.
- Ends -
Enquiries:
Empresaria Group plc via Alma PR
Rhona Driggs, Chief Executive Officer
Tim Anderson, Chief Financial Officer
Singer Capital Markets (Nominated
Adviser and Broker)
Shaun Dobson / James Moat 020 7496 3000
Alma PR (Financial PR) 020 3405 0205
Sam Modlin empresaria@almapr.com
David Ison
Hilary Buchanan
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 from locations 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 visit www.empresaria.com.
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END
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