CPL's earnings estimates cut by Davy

Listed Dublin recruitment firm CPL Resources has had its earnings estimates downgraded by a stockbroker due to the worsening outlook for domestic employment.

Davy said with unemployment now forecast to reach 7.5 per cent by the end of 2009 the next 12 months was likely to see a one third reduction in fee income for CPL.

While costs will also fall as commission-based remuneration drops, the reduction will be of a far lower order at around 10.7 per cent compared to the drop in fee income.

As a result Davy is now forecasting earnings per share for 2009 of 17.4 cents, 63 per cent blow its estimated peak earnings of 47 cents made in June last year.

Last month CPL said it expected pretax profit for the year to be in line with market expectations, despite challenging market conditions.

CPL shares have fallen by over 75 per cent over the last 12 months and this afternoon were trading over 7 per cent lower at €1.65, giving the company a market cap of €61.38 million.