Trading and operational update

RNS Number : 5446R

Empresaria Group PLC

30 October 2019

 

30 October 2019

Empresaria Group plc ("Empresaria" or the "Group")

Trading and operational update

Empresaria (AIM: EMR), the international specialist staffing group, provides the market with an update on trading and operations.

Trading update

At the time of our interim results we expected to meet market forecasts. We identified that our Engineering sector was experiencing an adverse impact from Brexit and challenging market conditions and we expected the second half to remain difficult. Despite actions taken to turn the business around, the UK Engineering business has experienced further material declines in revenue with the ongoing impact of Brexit, the insolvency of certain key clients and the early closure of major projects.  We now expect the Engineering sector to deliver a full year adjusted operating loss of approximately £1.5m.  Due to this further deterioration in trading, a material restructuring of the UK Engineering business is underway and we expect this to be completed before our next scheduled trading update in January.

The impact of Brexit has increased in the second half and with the decision to delay Brexit again, we anticipate further months of related uncertainty in the UK.  In addition, the German automotive sector slowdown has continued to impact our European operations. The impact of these challenges has largely been offset by the positive growth seen in many other businesses in the Group, but the net impact at the full year is now expected to be negative.

We anticipate that the Group's full year adjusted profit before tax is now expected to be at least £9m.  Significant actions have been taken in the impacted businesses in the UK and Germany to right size their cost base with the full benefit of this expected to come through in 2020.

Operational update

Empresaria has continued to move forward in aligning our businesses in order to drive growth and

create size and scale with our key sectors.  The Group's new management team has reviewed the operations of the Group and is accelerating the pace of change required to drive organic growth and take action on underperforming businesses.

As noted at the half year, significant change is underway, including aligning the Group into core sectors, identifying synergies with brands and markets, implementing cross-selling initiatives and identifying cost synergies such as rationalising back office support.  Our teams are embracing the changes and we are seeing early positive signs from these initiatives.

Alongside these changes, in September, within our Professional sector, we restructured and merged our marketing/creative brands, Become and B&H, under our LMA brand.  This change is expected to drive both cost and sales synergies and create greater size and scale within LMA.

Chief Executive Officer, Rhona Driggs, commented:

"While we are disappointed by the performance of our Engineering sector and the challenging economic environment, we believe we are taking the right actions for the long-term benefit of the Group. We have a strong, profitable and cash generative business that is being positioned for further growth in net fee income and profitability."

Enquiries:

Empresaria Group plc Rhona Driggs, Chief Executive Officer Tim Anderson, Chief Financial Officer	via Alma PR
Arden Partners (Nominated Adviser and Broker) Corporate Finance: John Llewellyn-Lloyd / Ciaran Walsh Equity Sales: Tim Dainton	020 7614 5900
Alma PR (Financial PR) Rebecca Sanders-Hewett Sam Modlin Hilary Buchanan	020 3405 0205 [e-mail]

Notes for editors:

§ Empresaria Group plc is an international specialist staffing group offering temporary and contract recruitment, permanent recruitment and offshore recruitment services across 5 sectors: Professional, IT, Engineering, Commercial and Offshore Recruitment Services.

§ Empresaria operates in 21 countries 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 applies a multi-brand, management equity philosophy and business model, with group company management teams holding significant equity in their own business.

§ Empresaria is listed on AIM under ticker EMR. For more information: empresaria.com

 

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