Friday, 10 July 2009

Spring’s profit flatlines

(By Anthony Miller – Friday 10th July 2009 8:15am). Actually, that’s at the EBITDA level, so unless a miracle occurred ‘below the line’, then we must assume that leading ITSA (IT staff agency) Spring Group fell into loss in the first half, surmising from today’s trading update (see here). This period last year Spring generated £3.3m operating profit, around double the 1H07 number. But the brighter news is that net cash continues to rise – they now have over £48m vs £26m same time last year and £40m at the end of 2008. CEO Peter Searle mooted this might be a good time to go shopping.

While the profit performance appears gloomier than recruitment peers Hays (see Sunshine fails to make Hays) and Michael Page (see UK slowdown slows at Michael Page), Spring seems to have been less affected at the net fee income (gross profit) level, down 23% vs -44% (for the half-year) at Michael Page and -40% (for Q4) at Hays. However, all of these failed to match ‘king of the UK ITSAs’ SThree, whose recent trading update (see SThree sees UK ICT recruitment slump near bottom) reported H1 NFI down ‘only’ 15% in constant currencies (9% reported). I’ll do a more meaningful ‘compare and contrast’ when all these players report the full numbers over the next few weeks.

Meanwhile, Searle was not tempted to predict how H2 was likely to fare. Probably just as well as we think it will be rubbish for everyone!

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