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'Strong' CPL pushes revenue up by 22pc

Recruitment firm CPL Resources has reported a 63pc rise in pre-tax profit to almost €3.9m for the six months to the end of December, with a 22pc increase in revenue to just under €112m resulting in a strong performance for the group.

Releasing interim figures yesterday, CPL chairman John Hennessy said that permanent fee income continued to improve in the six-month period and was up 57pc year-on-year at the end of December.

However, he warned that despite managing to grow revenue from its temporary placement business by 21pc year-on-year and gross profit in the segment having risen by 23pc, the temporary side of CPL's business was still experiencing "significant price pressure with continued margin erosion". Almost 70pc of CPL's income is derived from temporary fees and the remainder from permanent fees.

Mr Hennessy said that the group had benefited from "tight cost control" during the period.

The interim statement showed that the company's cost of sales rose more than 20pc to €94.8m in the six months to the end of December to leave a gross profit of €17.1m, up 32pc on the corresponding period in 2009.

Distribution expenses climbed 38pc to just over €1m, while administrative expenses were 21pc higher at €12.7m.

The company had cash totalling €42.4m on its books at the end of December and declared an interim dividend of 2.5 cent, up from 1.5 cent the previous year.

Mr Hennessy cautioned that the marketplace remained "uncertain and highly competitive", and that the group was "unlikely" to experience significant changes in profitability in the near term.

Davy Stockbrokers analyst Joshua Goldman said that the results were in line with his estimates and said they showed that the environment in which CPL operates had "turned the corner off a very low base". He said Davy was retaining its full-year pre-tax profit guidance of €7.5m.

Shares in CPL closed up 3.5pc at €2.95.

Irish Independent