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Staffline Group
- BY: Andrew Hore |
- POSTED: 06/09/2010 |
- COMMENTS: Add yours
Outsourced recruitment services provider Staffline Group had already told the market that its interims would be much better than expected but the share price still soared on their release.
The shares rose 29.5p to 129.5p, which values Staffline at £27.5m.
Revenues rose 70% to £83.4m in the six months to June 2010. Acquisitions made a strong contribution to that growth but there was also organic growth. Pre-amortisation profit improved from £1.38m to £2.35m.
The interim dividend was increased from 1.4p a share to 2.4p a share. The total dividend for the year is forecast to increase from 3.1p a share to 5.5p a share. Even after the share price rise, the yield is 4.2%.
The business is strongly cash generative and net debt edged down to £4.8m at the end of June 2010 even though two acquisitions were made in the period. Bad debts remain rare.
There are 129 OnSite locations with six more to come in the third quarter. Additional business is being won with Tesco and recent acquisitions brought new customers including Ginsters owner Samworth Brothers and Cranswick.
House broker Altium forecasts a rise in full year underlying profit from £3.6m to £6.7m. The shares are trading on less than six times prospective 2010 earnings, which is modest considering the potential and the yield. It indicates how lowly rated the shares were before the share price rise.
Staffline is looking for more acquisitions in industrial recruitment, training and related areas. Changes in government funding have led to a number of training companies being put up for sale.
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