TIDMSTAF
RNS Number : 4359N
Staffline Group PLC
01 February 2021
1 February 2021
STAFFLINE GROUP PLC
("Staffline," or the "Group")
Trading and Business Update
Staffline, the recruitment and training group, is pleased to
provide the following trading and business update for the year
ended 31 December 2020.
Trading update
The Group made significant progress in 2020, improving its
operational, financial and governance processes and board
composition, including strengthening the Group's financial position
through a successful refinancing in June 2020. The net result has
been an improvement in revenues, underlying operating profit(1) ,
working capital and cash generation in the second half of 2020.
The Group expects to report underlying operating profit
marginally ahead of expectations for the year ended 31 December
2020.
Staffline experienced strong demand for temporary recruitment
from the food, driving, logistics and e-commerce sectors in 2020,
whilst the manufacturing, retail and automotive industries
continued to be more challenging. Despite the national lockdown in
November and restrictions in December, the Group still experienced
a strong Christmas trading peak, with significant demand from the
Group's food retail customers. Furthermore, e-commerce and
logistics experienced a very strong trading period as a result of
consumers transitioning to online retail.
PeoplePlus successfully completed the disposal of its
Apprenticeships business in December 2020 for a nominal
consideration, as part of a strategic re-focus on its core
employability and adult skills capabilities. PeoplePlus expects to
report an underlying operating profit for the second half of 2020
compared to a loss in the first half.
Net debt
At 31 December 2020, the Group had pre-IFRS 16 net debt(2) of c.
GBP9.0m (2019: GBP59.5m), with average net debt throughout the year
of c. GBP38.1m (2019: c. GBP85.2m).
The year-end position represents an improvement against
expectations resulting from the increased focus on working capital
and cash generation during 2020, as well as a number of timing
effects, including the benefit of deferred VAT relief from Q2 2020
of GBP42.9m.
HMRC VAT measures
In March 2020, the Government announced that VAT payments due
from businesses between 20 March 2020 and the end of June 2020
could be deferred until the end of the tax year. In September, the
Government provided an update allowing businesses which have
deferred this VAT to have the option to pay in instalments between
March 2021 and March 2022. This payment delay provides the Group
with a significant short-term liquidity improvement.
COVID-19 update
The broader impact of the COVID pandemic, which has caused
disruption globally, has created both opportunities and challenges
across Staffline. Whilst the current lockdown has not caused the
significant spike in food customer demand first seen in March 2020,
volumes still remain high and look set to continue until COVID
restrictions ease across the UK. PeoplePlus took actions to reduce
its cost base in the first half of 2020, together with implementing
new digital operating models, however it continues to experience
disruption to many of its classroom-based services as a result of
the pandemic.
Summary
Staffline delivered a robust performance across 2020,
underpinned by the new structures and processes implemented during
the year. These initiatives have provided stability and ultimately
position the Group for growth; however, the board is mindful that
the near-term challenges created by the COVID pandemic remain. The
employment market experienced a structural shift in 2020, with the
pandemic causing a significant rise in UK unemployment, which the
board believes presents a number of opportunities for Staffline due
to existing customer relationships and the Group's broad market
offering.
Notwithstanding the combination of corrective measures taken in
2020, which has resulted in a significant improvement in working
capital, the board continues to evaluate its options in relation to
strengthening the Group's finances. Whilst the outlook for
Staffline in the near-term is not without its challenges, the board
remains cautiously optimistic.
(1) Underlying operating profit before goodwill impairment,
amortisation of intangible assets arising on business combinations,
reorganisation costs and other non-underlying costs.
(2) Net debt is stated before unamortised debt issue costs.
For further information, please contact:
Staffline Group plc via Vigo Communications
www.stafflinegroupplc.co.uk
Albert Ellis, Chief Executive Officer
Daniel Quint, Chief Financial Officer
Liberum NOMAD and Broker
www.liberum.com
Richard Lindley / William Hall 020 3100 2222
Vigo Communications Financial PR 020 7390 0230
www.vigocomms.com staffline@vigocomms.com
Jeremy Garcia / Antonia Pollock
About Staffline - Recruitment, Training and Support
Enabling the Future of Work(TM)
Staffline is the UK's market leading Recruitment and Training
group. It has three divisions:
Recruitment GB
Staffline is the UK's leading provider of flexible blue-collar
workers, supplying approximately 40,000 staff per day on average to
around 450 client sites, across a wide range of industries
including agriculture, supermarkets, drinks, driving, food
processing, logistics and manufacturing.
Recruitment Ireland
The recruitment Ireland business is a leading end to end
solutions provider operating across 20 industries, 10 branch
locations, 15 onsite customer locations and offering RPO, MSP,
temporary and permanent solutions across the island of Ireland.
PeoplePlus Division
Staffline is the leading adult skills and training provider in
the UK, delivering adult education, prison education and
skills-based employability programmes across the country.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019.
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END
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