Trading Update and Notice of Results

RNS Number : 7581Z

Empresaria Group PLC

27 January 2022

 

27 January 2022

Empresaria Group plc

("Empresaria" or the "Group")

Trading Update and Notice of Results

Strong net fee income growth with targeted investment to drive future profitability

Empresaria (AIM: EMR), the global specialist staffing group, today provides a trading update for the financial year ended 31 December 2021 ahead of announcing its full year results on 17 March 2022.

Trading update

· Adjusted profit before tax expected to be slightly above recently upgraded market expectations.

· Net fee income up 10% to £59.5m (up 14% in constant currency), H2 up by 21% (26% in constant currency).

· Adjusted net debt of £14.0m, significantly lower than market expectations.

· All five of our key sectors delivered year-on-year net fee income growth (constant currency).

· Very strong performance from Offshore Recruitment Services - net fee income up 26% (35% in constant currency) and headcount now above 2,000.

· Invested in new regional structure and senior leadership team and continued progress in our front office technology implementation.

Net fee income recovery has continued, with the second half of 2021 up 21% on the second half of 2020 (26% in constant currency) and the full year up 10% on prior year (14% in constant currency).  The Group's diversity by sector and geography, which helped mitigate the impacts of COVID-19 in 2020, means that we are seeing differences in growth rates across the Group with very strong growth in some areas, such as Healthcare and Offshore Recruitment Services, partially offset by more challenging conditions elsewhere, such as in Commercial (logistics) and Professional (aviation), as discussed in more detail below.

The Group invested significantly in its senior leadership during 2021 with the appointment of highly experienced industry professionals into new roles leading UK & Europe, APAC and North America.  We are already seeing the benefits of this enhanced team accelerating the execution of our strategy and growth plans throughout the Group.

Going into 2022, we continue to experience favourable market conditions across parts of the Group.  We are investing in growing our sales and recruitment teams in targeted markets to take advantage of market recoveries and to accelerate long-term growth.

Financial position

Adjusted net debt at 31 December 2021 was £14.0m, an increase of £0.4m from 31 December 2020, and a decrease of £2.5m against 30 June 2021.  As net fee income has recovered, working capital requirements have increased, but these have been largely offset by the cash generated by the business during the period.  Headroom, excluding invoice financing, remains strong at £12.9m.

Performance by sector

Net fee income by sector for the year ended 31 December:

£m	2021	2020	% change	% change (constant currency)*
Professional	17.6	15.4	+14%	+16%
IT	13.3	12.7	+5%	+10%
Healthcare	4.2	2.5	+68%	+75%
Property, Construction & Engineering	0.7	0.7	-	-
Commercial	17.2	17.2	-	+4%
Offshore Recruitment Services	7.7	6.1	+26%	+35%
Intragroup	(1.2)	(0.6)	+100%	+100%
Total	59.5	54.0	+10%	+14%

* The constant currency movement is calculated by translating the 2020 results at the 2021 exchange rates.

The Group's Professional sector has seen a strong recovery in 2021. This is despite the ongoing challenges in aviation, particularly in Asia, which was previously a significant contributor to this sector.  Excluding aviation, net fee income was up 27% with strong performances across all operations. Overall net fee income was up 14% (up 16% in constant currency). 

In IT, net fee income increased by 5% (up 10% in constant currency).  This was driven by very strong performances in both the US and Japan offset by a fall in net fee income in the UK where numbers for temporary staff have been slow to recover.

The Group's Healthcare sector delivered a record year with net fee income up 68% compared to 2020 (up 75% in constant currency).  This was led by our US operations where additional demand was driven by COVID-19 vaccination programmes.

In Property, Construction and Engineering, the Group's smallest sector, net fee income was in line with prior year with demand for new home sales temporary staff remaining muted. 

The Group's Commercial sector delivered net fee income in line with 2020, (up 4% in constant currency).  Performance in this sector has been mixed with strong recoveries in our temporary staffing business in Germany and in our operations in Austria and Chile.  However, this has been offset by falls in net fee income in Peru and in our logistics business in Germany, which, after a very strong 2020, has experienced significant challenges in filling lower paid roles as the economy and labour market have recovered.

In Offshore Recruitment Services, net fee income was up 26% (up 35% in constant currency) after another very strong year.  Recovery, combined with new growth, has been rapid during 2021 with headcount increasing by more than 900 to close the year at over 2,000.

Rhona Driggs, CEO of Empresaria, commented:

"We are pleased with our recovery in net fee income and encouraged by the very strong recovery in our expected profits. Our Healthcare and Offshore Recruitment Services sectors both delivered particularly strong performances with record net fee income levels.  Although challenges remain in some of our markets, these have been outweighed by positives elsewhere, highlighting the benefits of being a geographically and operationally diverse Group.

As the year progressed, we shifted from recovery mode to growth mode while continuing to make significant investments in driving the future growth of the Group.  This includes the appointment of three new senior leaders who, working with our existing leadership, will be instrumental in accelerating the delivery of the Group's strategy.  We have also continued to make progress on our technology implementation with a further nine operations going live on our common front office platform during the year.

As part of our strategy to accelerate the Group's growth, we are making targeted investment in our sales and recruiting teams for 2022 in those areas where we see strong long-term growth opportunities and to ensure that we realise the benefits we are seeing from the talent shortages and wage inflation clients are experiencing in some of our markets.

Looking ahead, we continue to see positive signs in many of our markets. We are well positioned with the right leadership team and structure, and we look forward to 2022 with optimism."

- Ends -

Enquiries:

Empresaria Group plc Rhona Driggs, Chief Executive Officer Tim Anderson, Chief Financial Officer	via Alma PR
Singer Capital Markets (Nominated Adviser and Broker) Shaun Dobson / James Moat	020 7496 3000
Alma PR (Financial PR) Sam Modlin David Ison Hilary Buchanan	020 3405 0205 [e-mail]

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 empresaria.com.

 

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