Operating profit at CPL drops by 52pc
Published 09/09/2010 | 05:00
Operating profit at recruitment group CPL Resources declined 52pc to €3.96m during the financial year to the end of June as its net fee income, or gross profit, dropped almost 20pc to €28.2m.
The company had incurred an €8.1m impairment charge in its 2009 financial year that left it with a pre-tax profit of just under €1.7m. That compared to a pre-tax profit of €5.3m for the year just ended.
Company chairman John Hennessy said CPL was experiencing "gradual, but noticeable" improvements in Ireland and other markets, but warned that recovery would take "considerable time".
He added that it was too early to conclude that a sustained recovery had begun in Ireland or in the other markets in which CPL operated. CPL has been battling against an environment where the unemployment rate in Ireland reached 13.7pc at the end of June.
Chief executive Anne Heraty said that while the recent couple of years had represented the most difficult labour environment in the firm's 20-year history, some employers may have made cuts that were too broad and were now finding they needed to hire again, particularly in specialist areas.
CPL's gross margin declined by 1.6 percentage points to 14.9pc during the period, due in part to a reduction in the spread between billing and pay rates, and also as a result of what it said was a deterioration in permanent placements, which have a higher gross margin.
Davy Stockbrokers analyst Joshua Goldman has an 'outperform' rating on CPL stock, which closed in Dublin yesterday at €2.35, down 2pc.