Rising turnover puts Grafton back in black

TURNOVER GROWTH of 17 per cent enabled Grafton Recruitment to return to the black last year.

The all-Ireland recruiter's latest accounts, which have been provided to The Irish Times, show it made a pre-tax profit of £865,000 (€992,000) in the 12 months to the end of March 2011 compared with a loss of £2.7 million (€3.1 million) in the previous year.

This was in spite of writing off £583,000 (€669,000) in bad debts in Chile during the year.

This charge was largely offset by gains of £564,000 relating to a lease provision on a Dublin property and a write back of a goodwill impairment.

Grafton’s revenues increased to £128.2 million last year from £109.6 million in fiscal 2010.

Its cost of sales rose to £94.7 million last year from £80.3 million. This left it with a gross profit of £33.5 million, up from £29.6 million in the previous year.

Grafton’s administration expenses rose by £1 million during the year to £32.3 million.

The accounts show that shareholders purchased loan notes during the year worth £921,000.

This was to provide working capital for its outsourcing activities, which can have 3,000-plus employees on the payroll at any one time.

Grafton’s chief executive Jason Kennedy said it was on target to achieve revenues of £142 million in the current year and would “at least double” its Ebit (earnings before interest and tax), of £1.1 million last year.

Mr Kennedy said Grafton’s strongest growth was achieved in central and eastern Europe but its Irish business recorded a 5 per cent rise in revenues.

This was due to vacancies in technology and biotech sectors and increased outsourcing opportunities from companies seeking to achieve efficiencies.

“They are the growth drivers for Ireland,” he explained.

In the past two years, Grafton has reduced its cost base by 40 per cent, closed 15 offices (it exited Asia), and reduced staff numbers from about 800 to 625 currently.

Grafton has also beefed up its board. Robert Dix, a former KPMG partner now involved with the Quinn Group, was appointed as non-executive chairman in November 2010.

Vivienne Jupp and Niall Keyes also joined as non-executives in November 2010 while Declan Delanty was recruited in March 2011 from Arnotts as chief financial officer.

The accounts note that the 51 per cent shareholding of founder James Kilbane passed to his wife Dr Paula Kilbane following his death last year.