Thursday 12 December 2019

Pre-tax profits up by 25pc at CPL recruiting group

CPL chief Anne Heraty
CPL chief Anne Heraty

Paul O'Donoghue

Shares in Irish recruitment firm CPL Resources rose yesterday after the company reported a 25pc increase in pre-tax profits in the six months to the end of December.

In its half-year report the group, founded and headed up by Anne Heraty, inset, said revenue jumped by 12pc to €216.4m in the six-month period. Gross profit grew by 20pc against the same period in 2015 to €34m.

Adjusted operating profit, which excludes non-cash charges non-cash charges relating to the company's long-term incentive plan, was €8.4m, 39pc higher than the same period last year. The overall group's profit before tax increased by 25pc to €7.5m for the six-month period.

Earnings per share received a healthy boost, rising to 21.2 cent for the six-month period, up 23pc on the same time last year.

Revenues were boosted by an increase in fees due to the pick-up in the wider recruitment sector and also received a bump from UK recruiter Clinical Professionals, which CPL acquired in September in a deal potentially worth €8m.

The company said the board has proposed to pay an interim dividend of 5.25 cent per share, an increase of 11pc on last year's interim dividend.

Revenue from both permanent and temporary placements rose strongly. Net fee income from permanent placements rose by 22pc to €13.6m while turnover from temporary and contract work jumped by 19pc to €20.4m.

Chairman John Hennessy said the company has seen organic growth across all of its "key business sectors".

"While the pace of growth in many markets remains somewhat uncertain, we remain confident in the outlook for the business and expect to deliver continued profitable growth for the remainder of the financial year," he said.

However, he added that skills shortages in certain sectors "continue to cause challenges".

"The group continues to work with clients to understand their specific requirements and with our candidates in order to match their skills to those client requirements," he said. "Margin pressure continues across the temporary staffing market and this market segment remains highly competitive."

Analysts reacted positively to the results. Davy Stockbroker analyst Ross Harvey said the report "beat our expectations on all fronts".

"Healthcare and pharma continued to drive the permanent net fees," he said. "The lack of any particularly large placements within the period also suggests a more evenly-balanced and broadly-based market strength".

Shares in CPL rose by over 4pc by mid-afternoon on the junior stock exchange in Dublin yesterday before settling at €6.15, up 2.5pc on the previous day's close.

CPL also announced yesterday that non-executive director Garret Roche has stepped down from the board. The Flexsource Solutions managing director is being replaced by chief financial officer Mark Buckley.

Irish Independent

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