Staffline Group shares surged on Tuesday after announcing the sale of its PeoplePlus Group Limited subsidiary to a wholly owned subsidiary of Swipejobs Holdings Pty Ltd, in a deal valued at £12 million.
The transaction, completed on a cash free, debt free basis, includes £2 million in deferred consideration contingent on new contracts expected to commence within the next 12 months.
After accounting for £5.1 million in advanced payments received for future revenue, the net proceeds from the disposal are expected to be £6.9 million.
Staffline’s Board has indicated that the proceeds will be allocated to a combination of share buybacks and increased funding for the group’s organic growth strategy.
Staffline Group shares were 14% higher at the time of writing.
PeoplePlus, which specialises in workplace training and employability services, generated approximately £65 million in revenue and £1.3 million in profit before tax. At the end of December 2024, PeoplePlus held gross assets of approximately £16 million.
This disposal represents a strategic shift for Staffline as it looks to concentrate resources on its core recruitment business while returning value to shareholders through the planned share buyback programme.
Plans to streamline the business come after a period of poor share price performance for Staffline.
“PeoplePlus has played an important part in developing Staffline’s service offering over a number of years but with our strategic ambitions centred on our fast growing recruitment activities as opposed to training and education, now feels like the opportune moment to implement this change,” said Albert Ellis, Chief Executive Officer of Staffline.