Recruitment firm sees improvement in its markets

RECRUITMENT firm CPL Resources said that it is seeing a “noticeable improvement” in its markets with analysts saying the company is well placed to perform strongly in the future.

The company said pretax profits for the year to June rose to €5.3 million from €1.7m in the previous year.

However, in what it called the most severe labour market conditions and operating environment in its 20-year history, revenues fell by 11% to €189.9m.

Davy Stockbrokers said that one of the key to the company’s success was the reduction of the cost base by €2.6m. “As demonstrated by the half-yearly breakdown of gross profits, the environment is improving and we expect this to translate into an even better performance next financial year,” they said.

CPL is increasing its number of consultants from 194 at the start of the year to 222 at the year-end and also growing internationally by opening offices in Hungary and Poland.

“As a by-product of growing its international presence, the group clearly becomes less dependent on a single country’s economy, which should work to its advantage. The time to place each candidate will decrease as the number of positions available increases. We also expect the company to see benefits from its acquisitions,” Davy analysts’ said.

The company said that given the current market uncertainty they remain cautious in their short term outlook but are optimistic about the longer term opportunities.

CPL chief executive, Anne Heraty, said with the severity of the recession, many employers made deep and painful cutbacks in their workforce but she believes this is changing.

“They are now finding that they may have cut too deeply and need to hire again, particularly in specialist areas. In addition some employers are seeing an opportunity to build capability in their businesses, taking advantage of what is an exceptionally good time to hire talented people,” she said.

NCB Stockbrokers said that with CPL’s strong balance sheet and proven track record, they remain positive on the stock and re-iterate its buy recommendation.

The company announced a dividend of 4%, up from last year’ dividend of 3%.

During the year the company said it placed more than 2,500 in permanent jobs. It said its overall net fees from permanent placement were down 36% but this is an improvement from the 51% drop the previous year.

Fees generated from temporary assignments now represent 72% of group fees.

Group chairman, John Hennessy said: “Although it is too early to conclude that a sustained economic recovery has begun in Ireland or in the other markets in which we operate, we are currently experiencing gradual, but noticeable, improvements in those markets.

“We believe that we are well positioned to take full advantage of economic recovery as and when it occurs and to avail of other opportunities that may arise for profitable growth in our business.”


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