Marlborough International, the recruitment group, is looking for "robust" growth following the 73 per cent rise in pre-tax profit from £1.27 million to £2.19 million in the six months to August 31st, 1998.
"We have proved our worth," managing director, Mr David McKenna, told The Irish Times. "We will continue to grow the company the way we said we would."
Growth is expected to accelerate in the second half. The number employed in the domestic operations has been increased from 178 to 247. That pushed up costs in the first half which is reflected in the drop in overall operating margins from 17.2 per cent to 16.1 per cent. However, that should be reversed in the second half as extra consultants generate further fee income. New regional offices have been opened in Sligo, Athlone and Dundalk while the Cork business has been doubled. Benefits from these should flow through in the second half. In addition, the group which acquired Walker Hamill, a British recruitment company, has opened Walker Hamill Ireland to operate in the recruitment of key personnel, including specialist senior management.
Mr McKenna said he was happy that Marlborough would achieve brokers' earnings per share targets of 13.5p for the full year. This would represent a 53 per cent increase on last year's figure. No interim dividend is being paid. This policy of retaining all the funds for expansion would be reviewed at the end of the financial year, Mr McKenna said, stressing "we are in an acquisition mode". The group is continuing to talk "to a lot" of companies in Britain and Continental Europe. There is nothing "down the road", but the group is confident there will be further acquisitions.
The acquisition of Walker Hamill made a positive contribution to the latest results, with a five months contribution. It is continuing to "meet our original growth expectations". Walker Hamill contributed £2.98 million to the net fee income of £8.02 million (up from £3.8 million), and £1.37 million to the operating profit of £2.85 million (up from £1.37 million). Excluding these contributions still indicates very strong underlying growth from its domestic operations which had contracting margins due to acquisition costs, costs of being a public company and the expansion of employments, the benefits of which have not yet come through.
Nevertheless, reflecting real growth, the basic earnings per share rose from 3.82p to 4.76p while adjusted earnings went up from 3.82p to 6.10p. Also, it reduced the £5 million sterling debt raised to pay for the acquisition by £0.5 million.
