Growth in flexible hours working helps CPL improve profit to €18.5m

Irish recruitment group CPL Resources exceeded analyst expectations on Tuesday, increasing its full year profit before tax by 18 per cent, helped by growth in its flexible working segment.

The Dublin and London-listed company said revenue grew 15 per cent to €522.7 million in the year to the end of June, reflecting strong growth across its business sectors.

In its results, CPL failed to address the recent pressure it came under after a documentary on Channel 4 highlighted issues at one of its client companies, Facebook. The documentary showed CPL staff being instructed not to remove extreme, abusive or graphic content from Facebook, even when that content violated the social media company’s guidelines.

After the documentary was released, Facebook said it was carrying out an internal investigation with CPL to establish how the “gaps between our policies and values and the training given by CPL staff came about”.

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‘Refresher training’

It’s unclear whether any costs were incurred by CPL as a result of the investigation or the subsequent work it did involving “refresher training” with its Facebook-based staff.

While silent on the Facebook debacle, CPL said it faced challenges in light of Brexit, particularly in its UK healthcare business where fee income advanced marginally to €26.3 million. While it said it is committed to the UK healthcare market, “international nurse recruitment in the UK remains challenging as a result of changes in regulation and continuing Brexit uncertainty”.

Permanent placement

That “permanent placement” arm of the business became less important in the context of the group, representing 31.6 per cent of total gross profit, down from 36.3 per cent the previous year.

Demand for flexible working increased in the period, allowing CPL to improve fee income in that sector by 24.5 per cent to €56.9 million as it placed more than 12,200 people with employers.

CPL also improved its gross margin in the year to 15.9 per cent, up by 0.1 per cent on the back of that growth in that area of the business.

CPL returned €25 million of cash to shareholders during the year leaving it with net cash in excess of €24 million at the year end. The company's chief executive and co-founder Anne Heraty would have been the biggest beneficiary of this payout, receiving €7.4 million to reflect her 29.7 per cent stake in the business.

International footprint

Commenting on the results, CPL chairman John Hennessy said: "Current market conditions are favourable with high demand for talent and low unemployment rates in our key markets. We expect that these factors, together with the efforts of our people, will allow us to deliver further growth in our business during the financial year to 30th June 2019."

In her review, Ms Heraty said CPL’s priorities for 2019 would be to further develop the company’s strategy, grow its net fee income and build its international footprint.

“We believe our balance sheet and strong cash flow generation gives us the resources to invest in the growth and expansion of our business while also providing an attractive return to shareholders,” she added.

The company announced a 17 per cent increase in its total dividend per share to 13.5 cent.