IEX-listed recruitment firm CPL Resources said its revenue in the second half of last year declined due to continued weakness in the Irish economy impacted the company, but pointed to resilience in the temporary sector.
Profit before tax rose 53 per cent to €2.4 million for the six months ended December 31st 2009. The figure is in line with what CPL predicted in November, when it said it expected to report a pretax profit of more than €2 million for the six-month period.
However, although profit for the six months was up compared to the same period a year earlier, the 2008 results included a €4.5 million impairment charge that dragged down profit.
In its interim results for the six months to December 31st, the company warned its markets remain challenging, and the economic outlook was still uncertain in Ireland and in other locations in which the firm operates.
Group gross profit fell 37 per cent compared to the same period in 2008, dipping to €12.9 million, while revenue slipped about 23 per cent from €118.9 million to €91.3 million.
Net fee income for the six months to December 2009 was 10 per cent lower than the six months to June 2009, while permanent fees were down 15 per cent.
However, the company said it was witnessing an emerging trend of growth in demand for temporary staff, with net fee income in the temporary sector showing similar levels seen in the first half of the year.
"Net fee income in our temporary placement business was been more resilient to date across most of the group. Unfortunately the pricing environment in the temporary placement business has become more difficult. This has resulted in a 26 per cent decline in gross profit from this sector of our business compared with the same period in 2008," the company said in a statement.
"We are however beginning to see an increase in demand for temporary staff, and net fee income in our temporary business in the six months to December 2009 was similar to that generated in the six months to June 2009."
The resilience of this sector was also noted a year ago, when CPL reported results for the second half of 2008. Then, the firm said its temporary recruitment sector had seen only a 10 per cent fall in its fees, compared to a 40 per cent decline in the permanent sector during the period.
The group said its cash balances were €42 million at December 31st, 2009. The business generated €1.8 million from operating activities in the six months to December 2009,
The company spent €1.4 million on acquisitions in the six months to the end of December, and said it would continue to seek out suitable acquisition opportunities
"The markets in which we operate remain difficult and employment trends continue to present challenges. Nevertheless, the group is pleased to report profits before tax of €2.5 million for the six months ended 31 December 2009," CPL chairman John Hennessy said.
