Staffline Group trading update
Staffline, the Staffing and Employability organisation, providing people and operational expertise to industry, has issued a trading update for its financial year ended 31 December 2015.
The Board today confirms that earnings for the full year will be in line with market expectations and both of the business’ divisions have performed well in the year.
The Staffing business has secured a record number of Onsite wins in the period, also supported by two strategic bolt-on acquisitions completed in the second half. In PeoplePlus, the Employability, Skills and Justice Division, the integration of A4e, acquired in April 2015, remains on track and PeoplePlus continues to build on its reputation for quality and performance.
The record performance in winning new business in the Staffing Division has led to a short-term increase to working capital requirements, which, in conjunction with the acquisitions completed, means that net debt peaked at the year end at around £64m. Net debt remains on track to fall quickly over coming periods.
Meanwhile, the final annual accounts have been published for A4e, up to the merger with Staffline. According to the Daily Mail, it saw turnover fall but profits quadruple last year.
The firm, which is a key partner to government schemes, said the number of UK jobseekers referred to it was falling due to the economic recovery, but that it was seeing an increase in its Australian operation.
In the last set of accounts before it was bought by rival Staffline Group, A4E recorded turnover of £166million in the year to March 2015, down from £189million, and profits of £9.2million, up from £2.3million, due mainly to a fall in operating expenses.
The quadrupling of annual profits would be expected from the design of the Work Programme and the referral flow patterns - 75-80% of income is now from job sustainment payments.
The question of whether the contract is profitable over the entire period can only be seen over the whole 5 years + up to 4 support/sustainment period. In the first years there was substantial investment by providers, and by this stage they are recouping that investment.