Empresaria shares sank on Thursday after the recruitment group said fee income was falling amid weak trading conditions.
Empresaria’s net fee income fell 9% year-on-year to £29.7m in H1 as the global specialist staffing group continues to face difficult market conditions. Permanent recruitment saw the greatest impact, with a 24% decline. The US has been especially challenging, particularly for IT recruitment.
Empresaria now expects full year adjusted profit before tax of approximately £5m, well below previous forecasts.
Empresaria shares were down 27% after suggesting the weak trading climate is expected to persist into the second half.
Adjusted net debt rose slightly to £8.7m in H1, though headroom increased to £18.4m thanks to tighter cash management. Offshore Services, of which Empresaria owns 72%, saw 15% net fee growth driven by UK Healthcare demand. But US IT hiring remained soft. Ongoing cost cuts won’t fully mitigate trading weakness. Empresaria needs hiring demand to rebound globally to get profits back on track. The staffing group reports interim results on 22 August.
Rhona Driggs, CEO of Empresaria, commented:
“We continue to face challenging market conditions which developed through the second half of 2022 and remained throughout the first half of 2023. We have not seen the anticipated signs of sustained improvement as client confidence remains low and candidates continue to be reluctant to move in the current environment. With the ongoing macro-economic uncertainty, we now expect these factors to continue to have an adverse impact on the Group’s profits in the second half of 2023.
We have taken action on our cost base and will continue to maintain tight control over costs while ensuring that we are able to maximise opportunities as and when market confidence returns. While we are disappointed with these results, we are continuing to execute on our strategic initiatives and are confident in the medium and longer-term prospects of the Group.”