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ReThink Group

  • BY: Andrew Hore |
  • POSTED: 13/07/2011 |

Recruitment company ReThink Group says that its interim net fee income will be 30% higher in the six months to June 2011.

The full year figures will include a six month contribution from recent acquisition Berkley Recruitment Group. ReThink paid an initial €2.65m (£2.34m) in cash and shares with additional consideration of up to €4.125m (£3.65m) depending on Berkley’s EBITDA in 2011. Berkeley’s management has a 7.85% stake in ReThink. Berkley takes ReThink into the pharmaceuticals sector. It has offices in Dublin, Cork and Singapore.

Merchant Securities has upgraded its 2011 profit forecast from £1.5m to £1.9m. Net debt is expected to be £6.6m at the end of 2011 according to Merchant Securities. This debt is based on invoice discounting.

A maiden dividend of 0.188p a share was declared for 2010 and this will be pushed up each year. A 0.25p a share dividend is forecast for this year.

ReThink has four divisions. There is the core recruitment business plus its international operations. The UK division has five offices, while the international division has offices in Dubai and Singapore. Berkeley will be added to these operations.

ReThink continued to grow its number of contractors even during the recession. The current figure is just over 600 and ReThink says that it can cope with 1,000 without significant increases in overheads. That figure could be achieved in 2014. The international business is likely to expand in the Netherlands and Qatar.

The other divisions are recruitment outsourcing and the software and consulting business AIIMI.

ReThink has remained profitable throughout the recession although the profit dipped in 2008 because of flotation costs and in 2009 because of tough trading.

At 11.88p a share, up 1.75p, ReThink is valued at £12m. The shares are trading on nine times prospective 2011 earnings. 

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