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STAFFLINE GROUP PLC Strong performance across 2021, exceeding market guidance

Posted date 2 months ago Posted by Staffline Ireland

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22 March 2022

  

STAFFLINE GROUP PLC 

Strong performance across 2021, exceeding market guidance

 

Staffline Group plc, the recruitment and training group, announces its audited results for the year ended 31 December 2021 which show strong growth in gross profit and underlying operational profit.

 

Tina McKenzie, CEO of Staffline Ireland, commenting on the group wide results said:

 

“Today’s results are a testament to the tenacity and drive of not just the Group wide leadership team but the workforce who continued to deliver at a high level across the Covid-19 pandemic, overcoming the sustained pressures of labour shortages and global supply chain issues.

 

Staffline’s performance across 2021 has exceeded expectations, both in terms of the operational progress we have delivered across the Group but also in more than doubling our underlying2 operating profit in the year. I am satisfied that we now have the operating platform, balance sheet strength and governance in place to fully capitalise on our market leading position and drive sustainable growth.

 

I want to acknowledge the contribution of my team in Ireland to the strong results we are seeing today across the business. All our people are working cohesively and in harmony to achieve a high standard of output against the backdrop of a very difficult geo-political climate.

 

I have every confidence that my team will continue to deliver a consistently high level of performance, ensuring the overall group benefits and continues to generate new areas of growth for 2022 and beyond.”

 

Ends

 

Note to Editors: Please see financial and operational highlights below

 

AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021

Financial Highlights1

 

 

FY 2021

FY 2020

Change

Revenue

£942.7m

£927.6m

+1.6%

Gross profit

£82.8m

£74.6m

+11.0%

Gross margin %

8.8%

8.0%

+0.8%pts

Underlying operating profit2

£10.3m

£4.8m

+114.6%

Gross profit to underlying operating profit conversion %

12.4%

6.4%

+6.0%pts

Profit/(loss) after tax

£1.6m

£(48.5)m

+£50.1m

Underlying EBITDA

£16.9m

£12.2m

+38.5%

Net cash/(debt) 3

£6.9m

£(8.8)m

+£15.7m

 

  • Revenue increased to £942.7m (2020: £927.6m) notwithstanding the exit of certain lower-margin contracts

o   Strong organic growth in like for like revenue and gross profit has more than doubled year-on-year underlying operating profits2, significantly contributing to the increase of £15.7m of cash

  • Strategic actions, and the quality of the organic growth has driven up margins with gross profit increasing by 11% to £82.8m (2020: £74.6m), and gross margin by 0.8%pts to 8.8% (2020: 8.0%)
  • Underlying operating profit2 is ahead of market expectations for 2021 increasing 114.6% to £10.3m (2020: £4.8m) with underlying EBITDA surpassing £16m
  • Stronger than expected trading cash flow has reduced ongoing finance costs materially to £2.4m (2020: £4.1m)
  • Profit after tax of £1.6m (2020: loss £(48.5)m), the first profit after tax since 2017
  • The Group’s balance sheet continues to strengthen following the equity raise of £46.4m (net) in June 2021 and refinancing of the Group’s working capital facilities.
  • Net cash (Pre-IFRS 16)3 as at 31 December 2021 of £6.9m (2020: net debt of £(8.8)m)

o    Repayment of the majority of the deferred VAT relief of £40.7m during 2021

o    Deferred VAT relief was repaid in full on 31 January 2022 with no pandemic related relief or loans currently outstanding

 

Operational Highlights

 

  • All three divisions have delivered strong growth in gross profit and underlying operating profit2 with conversion ratios improving across the Group

o    The successful drive to expand the portfolio of services in permanent recruitment has exceeded expectations with gross profit up 68% compared to 2020

o    The turnaround of PeoplePlus continues with a 156% increase in underlying2 operating profit

  • Significant productivity gains have been achieved as a result of a new focus on incentivisation

o    Recruitment GB: gross profit per fee earner up 14.6% to £71.5k (2020: £62.4k)

o    Recruitment Ireland: gross profit per fee earner up 2.2% to £111.5k (2020: £109.1k)

o    PeoplePlus: revenue per employee up 18.3% to £62.6k (2020: £52.9k)

 

 

  • PeoplePlus’s Restart sub-contracts awarded in June 2021 have been successfully mobilised
  • The ongoing implementation of the Group’s digital transformation project continues to underpin operating efficiencies and positions Staffline as a leading innovator in the sector
  • PeoplePlus launched #GetBritainWorking, a potential solution to tackle structural elements of the labour shortage

 

Current Trading and Outlook

  • The Group has an encouraging pipeline of opportunities emerging across traditionally strong sectors such as automotive and travel as the UK economy continues its recovery from the Covid-19 pandemic
  • The Group has today announced a major contract win with BMW and a material extension with Vinci an existing customer, demonstrating Staffline’s scale, reach and its capacity for increasing market share
  • Whilst macroeconomic uncertainty has increased, the Group’s strong market share in resilient sectors such as food distribution, logistics and on-line sectors provides good visibility of revenues
  • Overall, the Board of Directors is confident that Staffline has the operational and financial foundations in place to deliver sustainable growth
  • We have made a strong start to 2022 and are confident in meeting our expectations for the full year