The recruitment group CPL Resources revealed its third consecutive annual profit increase of more than 80 per cent yesterday and said it is well placed to weather the predicted slowdown in the employment market.
It reported a pretax profit of €19.3 million for the year to the end of June, compared with €10.6 million in the prior year. Revenue, meanwhile, rose 32 per cent, to €195.5 million. The company attributed the increases to the ongoing growth of the Irish economy and the expansion of the business through €4.9 million worth of acquisitions.
In the statement chief executive Anne Heraty said the Irish economy had remained healthy during the year and had provided a solid base for CPL to grow. She said that the outlook remains positive despite the forecast slowdown in employment growth as the professional and technical areas, where more than 74 per cent of CPL's gross profit is generated, are still suffering from skills shortages. The main slowdown is expected to be seen in the construction sector where CPL has no direct exposure.
Analysts welcomed the figures, which came in ahead of expectations. Philip O'Sullivan at Goodbody said he will be raising his earnings forecasts for 2008 by about 10 per cent. "While noting the concerns about the overall Irish employment outlook, driven by the moderation in house building, we highlight that CPL has no direct exposure to this sector, while its financial strength and the momentum across all divisions provide more comfort," he said.
Shares in the company rose as much as 11 per cent in early trading, but fell back quickly to close up just 1.6 per cent, or 45 cent, at €29.45. Volume was very light. The full year dividend was 4 cent per share, an increase of 38 per cent.
While the business grew across all divisions, the strongest performance came from managed services, ICT and finance and accounting. Net fee income from the permanent placement business increased 52 per cent when compared to the prior year, while contractor and temporary fees were 53 per cent ahead.
During the year the CPL grew every part of its business and continued its international expansion. In the future, Ms Heraty says, she sees "great opportunity" for the company to grow internationally. She also said CPL has sufficient financial and operational flexibility to take advantage of any opportunities that may arise.
CPL will pay a final dividend of 2.2 cent a share, bringing the total for the year to 4 cent.
