Odgers weighs heavily on OPD profits

(By Anthony Miller – Tuesday, 17th March 2009 9:15am). OK, these are names probably not that well known to you – unless perhaps you are in the market for a CxO job or have a very good memory. OPD is the holding group for a small string of recruitment companies including executive search firm Odgers Ray & Berndston, interim management firm Hoggett Bowers and – now we get to the point – PSD, once one of the high-flyers in the UK ITSA (IT staff agency) rankings.

Although never a pure ITSA, OSD had a well established position in IT&T recruitment (mostly permanent). It was founded in 1991 and grew mainly by acquisition, floating in 1997. Looking back at our old ITSA research I see they chalked up £63m in revenues and £40m in NFI (net fee income, i.e. gross profit) back in 1999, with operating margins around 24%. Pretty cool.

But it’s looking rather horrible now. PSD acquired Odgers in 2005 – though you’d never believe it looking at Odgers website; you have to look very hard indeed to find record of its ‘parentage’. Anyway, the good news is that Odgers was the only part of OPD to see NFI increase in 2008 – by 3% to £54m (see FY results here). The bad news is that the £7.5m of goodwill impairment from its acquisition plunged OPD into net loss. Indeed, even without this hit, operating profit for the group fell by over a third to £9.9m taking group margins down from 10.6% to 6.8%. Even the PSD/Hoggett bit of OPD doesn’t compare well with its performance in 1999. NFI last year was £36.6m, almost 10% below where it was a decade ago.

None of this should come as a great surprise – the permanent recruitment market in all its shapes and forms is suffering badly and will continue to do so for some time yet.