Rise in temporary recruitment boosts shares in CPL Resources

SHARES IN CPL Resources rose by close to 5 per cent yesterday, after the recruitment company posted a strong rise in revenue and profits, underpinned by continuing growth in the temporary recruitment business.

Revenue for the year to June 30th grew by 23 per cent to €290 million, while CPL’s operating profit increased by 39 per cent to €10 million.

Pretax profit was up by 20 per cent at €9.8 million, while the group’s earnings per share were 25.6 cent, compared to 19.2 cent in 2011.

Chief executive Anne Heraty described the company’s 2012 financial year as a “year of significant progress”, in which CPL successfully responded to changing trends in the recruitment market.

Revenue from temporary recruitment continued to represent the vast bulk of CPL’s turnover last year, reflecting the overall trend towards the recruitment of temporary rather than permanent staff.

Revenue from the placement of temporary staff climbed by 24 per cent to €276.7 million. However, the average margin earned on temporary revenues was down slightly, falling by 0.7 per cent to 15 per cent in the year to June.

Revenue from permanent placements, which stood at €13.6 million last year, represented 31 per cent of the company’s gross profit, while fees from temporary placement work represented 69 per cent of gross profit, down slightly from the previous year. Overall, CPL’s ratio of operating profit to gross profit increased to 23 per cent in the year to June 30th, compared to 19.4 per cent the previous year.

CPL expanded its overseas business last year. Some 37 per cent of permanent fees and 7 per cent of temporary fees came from outside Ireland.

Davy Stockbrokers highlighted CPL’s “strong performance outside Ireland”, particularly in central and eastern Europe, and in Scandinavia where it purchased Swedish company European Human Resources earlier this year.

In the year to June 2012, CPL placed more than 5,500 people in permanent jobs and more than 20,000 people in temporary and long-term assignments.

The company noted that, despite the contraction in the Irish labour market, demand for skills in certain sectors such as technology, digital services and the shared services sectors, continued.

CPL had net cash of €28 million at year end, and paid out €21.8 million to shareholders during the year. The company proposed a final dividend of 3.5 cent per share, bringing the total dividend for the year to 6.5 cent.