Staffline Share Discussion Threads

[gripfit] 24/3/2023 07:56

This could be building up to some sort of buyout with Hrnet imho…HRNET crazy not adding this to their business

[gripfit] 24/3/2023 07:07

I’m saying that Spain is keeping the price up …

[tia01] 24/3/2023 06:41

Gripper
Yesterday you sounded like MR Grumpy. What you saying today!

[tia01] 23/3/2023 19:18

Probably buying cheap shares for employees scheme on the cheap.

[gripfit] 23/3/2023 16:05

If they keep buying stock in like today then it’s going down

[tia01] 23/3/2023 09:26

It’s gone quite on here.
How do people see it going from here!

[tia01] 22/3/2023 12:45

Sold my QBT today for 2.3p this morning and even though they could go up I’m ready to put the money somewhere else.
May take a few more here following results but it could be a slow burner here.

[tia01] 21/3/2023 13:32

Smellys quite today!

[qsmeily456] 21/3/2023 13:31

And try duolingo for your English 🤣

[davebowler] 21/3/2023 09:53

Zeus-
On track, small EBIT beat

Staffline has reported FY22 results with underlying EBIT of £12.0m up 16.5% year-on-year, beating our £11.6m forecast. Despite broadly flat revenue vs. FY21, the focus on its recruitment margins, tight cost control, and interest rate hedging has led to improved profits. As flagged on 24 January, the Group significantly outperformed our cash expectations, with net cash of £5.0m being £20.0m ahead of our estimates prior to the trading update. After resetting FY23 and FY24 forecasts in January, we make no further changes to estimates today. We continue to believe the Group is in a strong position to navigate any near-term macro volatility and by using its strengthened balance sheet, capitalise on growth opportunities and increase its market share to increase gearing into a recovery.

¨ FY22 results: Results for the year to 31 December 2022 were well flagged in a trading update on 24 January, where the Group outperformed Zeus profit expectations and net cash was £20m ahead of our estimate. A key positive from today’s results was that audited underlying EBIT was £12.0m vs. our forecast of £11.6m, which equates to YOY growth of 16.5% and a conversion ratio of 14.4% (+2pp vs. FY21). This was also ahead of the £11.4m EBIT forecast from our January 2022 initiation note, showing strong trading despite material macroeconomic developments and uncertainty since those expectations were set. H2 2022 EBIT of £8.0m was 40% ahead of H2 2021. Underlying profit after tax of £9.4m was also £2.1m ahead of our forecast, largely due to a £1.8m tax credit relating to deferred tax remeasurements and prior year adjustments. This meant that adjusted EPS of 5.7p was 29% ahead of our estimates – without the £1.9m tax credit, FY22 adjusted EPS would still have beat our estimates by c. 3%.

¨ Key drivers: Revenue was broadly flat YOY as expected, with gross margin also flat at 8.8% with a change in mix. Gross profit from Recruitment up 4.7% largely negated the 12.0% reduction in PeoplePlus. The conversion ratio (gross profit to operating profit) did expand to 14.4% from 12.4% in the prior year due to efficiencies and tight cost control. As a result, underlying EBIT was £12.0m, up 16.5% on FY21 (£10.3m). The interest rate cap purchased in October 2021 also limited the increase in net finance costs and helped to protect earnings. Underlying profit after tax increased 8.0% to £9.4m, whilst underlying diluted EPS decreased 19.4% versus FY21 because of the full year impact of the prior year equity raise. As flagged in January, net cash (ex. leases) was £5.0m and materially ahead of prior expectations, delivering a strengthened balance sheet. All Covid-related support has been repaid and the balance sheet is now expected to be used to “support growth opportunities”.

¨ Forecasts: The outlook is unchanged from the update given in January and we make no further changes to our reset FY23 and FY24 estimates. These forecasts factor in ongoing macroeconomic uncertainty, some softness in Perm recruitment demand, and continuing low unemployment constraining training and skills volumes within PeoplePlus. The Bank of England is forecasting the UK unemployment rate to rise from mid-2023, up to 4.4% in Q1 2024 and 5.0% in Q1 2025, but this is 0.8pp and 1.0pp less than its November 2022 forecasts. The Group remains confident it can leverage its brand, geographic scale and governance advantage to expand market share when a recovery comes. FY25 forecasts are introduced today, showing 4% revenue growth on FY24 and improvement in GP to OP conversion to 15.6% as the Perm business grows and PeoplePlus returns to sustainable growth.

¨ Valuation: On Zeus forecasts, Staffline trades on a P/E of 10.4x FY23 and 9.2x FY24. This is a 17% and 21% discount to peer average FY1 and FY2 multiples, respectively. We think this discount is unwarranted given the Group’s market leading position in its chosen niches and its strong balance sheet and cash generation. We remain comfortable with our DCF and sum-of-the-parts analysis, the average of which is 62.2p, a 75% premium last night’s closing price.

[casholaa] 21/3/2023 09:49

T1, don't give up your day job.

[mortimer7] 21/3/2023 09:26

Think they mentioned the Interest rate cap eleventy seven times in todays report. Do you think they're pleased with themselves?
"the Group limited its exposure to these interest rate increases through the use of an interest rate cap, which was purchased in October 2021"

[tia01] 21/3/2023 08:18

Gripper
Henry Spain clearly buying cheap for an undisclosed client. We all know a buy out will come at some point. Probably HRNET but who knows. Definitely a cheap company at these levels but needs to rise above 40p to break down trend and show its in a new uptrend. Certainly cheaper at these levels than highs of over 80p just over a year ago so nows the time to add in my opinion for LTH

[gripfit] 21/3/2023 08:13

U mean averaging down …. He was buying loads at 60p +

[tia01] 21/3/2023 08:06

Not fell on the open so I say that’s a positive.
Out of closed period so expect buying from Henry Spain to resume

[hamhamham1] 21/3/2023 07:47

At least this time any fall would be unjustified, and bought up IMO. but hey, let's see :)

[walterhwhite] 21/3/2023 07:33

Decent update that, which notoriously means only one thing for the share price in this particular stock... it falls!

[hamhamham1] 21/3/2023 07:27

The share price is on its ass, and this RNS is solid, so for me, it it very hard to see any major negatives, not bad report, 8 out of 10.

[tia01] 21/3/2023 07:21

Relatively in line with expectations.
Interesting to see how it’s perceived!
At least we know we are in a stronger place on the balance sheet.

[hamhamham1] 21/3/2023 07:14

Operational Highlights

· Strong financial and operational performance across the Recruitment divisions:

o Secured new contracts with BMW and Sainsbury's/Argos, confirming Group's market leadership in blue-collar recruitment

o Contract extensions secured with Causeway Coast and Glens Borough Council in Northern Ireland and VINCI Construction UK supplying labour and managed services to the London to Southampton pipeline project

o Opened new office in Limerick, Republic of Ireland and launched new executive search service, further highlighting the Group's growth momentum in Ireland

· PeoplePlus

o Delivered a solid performance from the Restart contracts, underpinned by first profit since inception in July 2021 of £1.2m

o Strong demand for labour resulted in potential candidates bypassing additional training programmes and moving straight into employment, which held back Skills division

Current Trading and Outlook

· Staffline delivered a strong performance across FY 2022, exceeding original expectations in terms of both profitability and cashflow, despite facing challenging macroeconomic conditions, which management expect to continue across FY 2023

· The Group expects to grow market share across the temporary recruitment market, but anticipates short term market challenges within the retail and consumer sectors subduing growth in permanent recruitment with low unemployment trends expected to further constrain volumes within PeoplePlus' Skills and Restart businesses

· As highlighted in the trading update in January 2023, the Board has adopted a cautious approach to FY 2023, however, the Group's strengthened balance sheet, experienced management team, and healthy pipeline mean the business is well placed to capitalise on the considerable market opportunities that lie ahead

Albert Ellis, Chief Executive Officer, commented:

"I am pleased to report such a strong trading performance across the Group in FY 2022, with Staffline increasing its overall profits and further strengthening its balance sheet.

In addition to these solid results, the Group secured two significant new contracts with BMW and Sainsbury's/ Argos, and extended important existing relationships with VINCI Construction UK and Causeway Coast and Glens Borough Council. Our experienced management and staff continue to ensure Staffline delivers an outstanding service in a tight labour market, further highlighting our credentials as the UK's preferred recruitment and training provider during this time of uncertainty.

"As we move further into 2023, we will focus our efforts on delivering on the Group's organic growth pipeline and leveraging Staffline's leading market position to capitalise on a number of exciting new business opportunities and further expand our market share."

[gripfit] 21/3/2023 07:10

PE of 3.3 ??? Based on Ebitda

[hamhamham1] 21/3/2023 07:07

As telegraphed in previous RNS, happy with that. Solid, as stated in the RNS.

[gripfit] 21/3/2023 07:04

Nothing that I didn’t know allready ….only good thing is that they are building cash up ..

[casholaa] 20/3/2023 19:31

PE is pizz poor. They need to cut costs in this environment and improve profit margins. Tomorrow win lose or draw, I have no idea of market reaction.
🤔