Staffline Gains Most in a Month on Sales Outlook: London Mover
Staffline Group Plc (STAF) rose the most in almost a month after Chief Executive Officer Andy Hogarth said the recruitment company plans to treble annual sales to 1 billion pounds ($1.6 billion) by 2017.
Staffline gained 3.4 percent at the close of trading in London, the most since Aug. 7, giving the company a market value of 135 million pounds.
“In the last five to six years we’ve trebled the size of the business twice,” Hogarth said today in a telephone interview. “Our aim is to treble it again over the next five years.”
Staffline shares have risen 84 percent this year, beating a gain of 30 percent for Adecco SA (ADEN), the world’s largest provider of temporary employees. Hays Plc (HAS) and Michael Page International Plc (MPI) have gained 28 percent and 19 percent respectively. Recruitment companies are benefiting from signs of recovery in the U.K. economy and employment. The economy grew by 0.7 percent in the three months through June and manufacturing and services indexes have strengthened.
Staffline is also experiencing growing demand from its clients for truck drivers and identifies “significant opportunities” in driving recruitment, the Nottingham, England-based company said today in a statement.
The Driving+ division, opened in the first half of this year, is forecast to deliver 10 million pounds of revenue in 2014 and 75 million pounds a year by 2017, Hogarth said.
Staffline has agreed to 10 million pounds of new work for the second half of this year, and is bidding for contracts worth 30 million pounds a year, Hogarth said.
The company is in the “early stages” of looking at acquisitions in its core business of placing administrative staff in industrial companies, after buying three businesses in the last 12 months, he said.
Staffline posted a 14 percent increase in first-half revenue to 187.2 million pounds helped by its Welfare to Work division, the company said. Adjusted pretax profit rose 32 percent to 4.9 million pounds.
“Underlying earnings per share increased by 35 percent to 17 pence, ahead of our forecast of 14.7 pence,” wrote analysts William Shirley and Joe Brent at Liberum Capital in a note to clients. “Welfare to Work was the key growth driver.”
The brokerage firm increased its share price estimate for the year to 570 pence from 530 pence and retained a buy recommendation.
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