Pretax profits increase 33% at recruitment firm CPL Resources

PRETAX PROFITS at recruitment firm CPL Resources grew by 33 per cent in the second half of the year, as the company increased sales and kept a tight control on costs.

Sales grew 22 per cent year on year and 14 per cent compared with the first six months of the year, leading to profit before tax of €3.9 million. For the same period in 2009, pretax profit was €2.4 million.

Permanent fees rose over the latter half of the year, rising 57 per cent year on year and 22 per cent compared to the six months to June 2010.

“While companies are looking to recruit again, their decision-making process is much longer than it used to be. Certain specialist areas showed the biggest pick-up in recruiting activity in the six-month period to December 2010,” chairman John Hennessy said.

Temporary recruitment also yielded more revenue, rising 21 per cent compared with the same period of 2009 and 13 per cent over the first half of the year.

However, while gross profit in the temporary recruitment area was 23 per cent higher year on year and rostered hours rose, the company said margins were being eroded due to price pressures.

The group generated €3.7 million from operating activities in the six months to December 2010, and had cash balances of €42.4 million at the end of the year.

“We continue to manage our debtor book actively and carefully, and we have not experienced any significant increase in bad debts. However, given the growth in revenue, our working capital needs increased in the first six months,” Mr Hennessy said.

The company spent €735,000 on acquisitions, including healthcare firm PHC Care Management Limited in November.

“The marketplace remains uncertain and highly competitive, and we continue to experience pressure on our margins,” Mr Hennessy said.

“These challenges are being offset by growth in certain specialist areas. As a consequence, the group is unlikely to experience significant changes in profitability in the near term.”