Share Name Share Symbol Market Type Share ISIN Share Description
Staffline Group Plc LSE:STAF London Ordinary Share GB00B040L800 ORD 10P
  Price Change % Change Share Price Shares Traded Last Trade
  0.45 1.64% 27.875 144,803 16:35:05
Bid Price Offer Price High Price Low Price Open Price
27.55 28.20 28.20 27.55 27.55
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 1,076.70 -48.10 -96.30 19
Last Trade Time Trade Type Trade Size Trade Price Currency
17:09:24 O 26,580 27.875 GBX

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Date Time Title Posts
09/8/202021:59Staffline from 20p 1,380
07/8/202015:04STAF TO 0P 115
06/8/202015:20Staffline Recruitment12,173
08/7/202009:02Staffline 2019158
08/7/202009:02Staffline Results next week real undervaled stock14

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Staffline Daily Update: Staffline Group Plc is listed in the Support Services sector of the London Stock Exchange with ticker STAF. The last closing price for Staffline was 27.43p.
Staffline Group Plc has a 4 week average price of 26.05p and a 12 week average price of 25p.
The 1 year high share price is 164p while the 1 year low share price is currently 16.02p.
There are currently 68,930,486 shares in issue and the average daily traded volume is 55,083 shares. The market capitalisation of Staffline Group Plc is £19,214,372.97.
smartie6: No wonder John09 and Kirk are very angry, their newly advised holdings in this business surely looks beyond common sense, doesn’t it? Especially when considering holdings in respect of a private investor. John09 recently bragged further purchases at 43p only to see a 30% fall. Wow, how silly does that comment look now? Any reason for the comment? Why have the posters on the other thread not highlighted the going concern statement within the latest financial accounts in full? Haven’t extracts to date posted on the thread failed to show the full content? Makes you wonder if they’re afraid to have a serious debate that may place their holdings under further scrutiny by the posters on that thread? On another point, what level of buys and sells have an impact on the share price? What was the reason for the significant recent rise? Why the subsequent fall? That RNS released by the Company also raised their own surprise, did it not? Should John09 and Kirk decide to sell their holdings down, for whatever reason, would they even be able to and would that have any influence at all on the share price given the quantity held? Lots of questions that just make me wonder, and ask should we not be holding a debate and raising direct questions?
hodhasharon: "Ok, so you're not shorting, but you come on here day after day after day attempting to place nothing but negative points of views onto other folk. For what reason would that be then I wonder?" The investment pros employ junior staff to put doubt in the minds of private investors to support their campaign. This is why when the like of Smartie show up the share-price invariably rises (eventually). EG: Big Company Inc wants to buy a load of STAF shares. They employ a junior member of staff to spread negativity. Big Company Inc take the price down (by taking out the buys below current offer). The drop in share price adds some kind of credence to Smartie and Co's negative assertions. We start to believe the sky is falling in. "They were right....we must sell ASAP". The price goes down further as a result of private investor sales. Who's buying? Big Company Inc. The price goes up.
mubz: You really think they will announce a share price movement rns to say hey guys we have someone who wants to take us over...anyone in their right frame of mind would know that an offer has to be the highest share price paid within the last 12 months this being £1.80 therefore what do you think that type of news would do to the current share price
craffert: STAF share price collapse already factors in an equity round to wipe out the bank debt and dilute the existing shareholders to hell in a handcart. So the big multi bagger gains are to be made when that doesn't happen and the market wakes up to that.
craffert: Good post cybebrhub. That was also my thinking, but at this share price I think the D4E is already priced in. Bank will be more interested in underlying EBITDA trend for 2020, cost cutting done, confidence in new management ability, addressable opportunity and finally, the support of HRNet. I think that the latter isn't priced in. HRNet are already looking at a big equity fall in value so the one way they could reverse would be to support a non dilutory deal, eg instead of D4E we could see HRNet provide a mezz strip, a-terms soft cash injection, or a cross guarantee for banking facility. Any of the latter and the share price will go off like a rocket as the path to value creation will be clearer. Nothing certain though, which is why these are 30p rather than £1. I have taken a small punt here at 28p as I think the above scenario is possible and I also think they are geared nicely to an economic re-start post Covid-19 ... there will be a lot of people in need of refresh training and shuffling around the employment market
123gmtrader: Liberum has released a 25 page report today. It's not great as you would expect but there is hope still and the share price now reflects the difficult time Staffline has had this last year. We introduce our TP at 190p, nearly double the share price The shares are trading on a CY 20 P/E of 4.1x. We believe that this overly discounts the financial risks. While there is too much debt, we believe that Staffline has businesses to sell if it gets into a difficult position. Our 190p target price is based on a sum of the parts. A CY 20 P/E of 4.1x is attractive and we re-introduce our recommendation with a BUY. Our TP of 190p offers 58% upside. HRnetGroup interest is supportive HRnetGroup, which is a leading recruitment and staffing firm in Asia and listed on the Singapore stock exchange, has purchased 29.95% of Staffline’s shares. HRnetGroup had not held shares in Staffline prior to July and the purchase clearly shows that Staffline is attractive at this valuation.
1newroad: I had a nice chat today with the Group finance director of one of the ftse 100 bigger companies where i asked him if it was normal for another company to buy just under 30% to have an association with the said company especially after paying a premium for the shares. He told me it was not a common thing to do. What they will likely want is a position on the board (which is what they have done) so that they can have access to info they would not be able to get otherwise. They will then decide whether they want to bid or not for the whole company. By taking their time and getting one of theirs on the board they are doing their due diligence. He suggested it looked likely a bid would come after paying a premium but also said that if they decided not to bid it was cheaper for them to write this off than to have bid all out for Staffline. So, basically HRnetgroup are obviously interested in buying Staffline, shown by paying a premium and having a board member. But whether they bid ot not, no one really knows. All we know is they are interested, have paid a premium for they 30% holding, Staf share price is very low and the exchange rate is in their favour. But there is no guarantee they will bid. They have also stopped others from bidding by holding 30% (just under).
1newroad: Review by Graham Neary from Stockopedia. What a difference a year makes to this blue-collar recruitment firm. 5d80a21403c68STAF_20190917.PNG The underlying results exclude the amortisation of acquired intangibles and reorganisation costs. As readers will remember, Staffline has had a myriad of problems in 2019, and raised new money at 100p. It's not out of the woods yet, as customers became wary of dealing with a company that didn't have its own house in order: ...there has been a slowdown in new contract momentum in the current financial year, which the Company largely attributes to the impact of the delay in publication of the 2018 full year results. Staffline points to non-financial KPIs such as net promotor score and "client happiness", but they look a poor substitute for financial progress. Outlook - the forecast for full-year adjusted operating profit is reduced to £20 million. We can expect the adjustments to be huge. The Board expresses confidence in medium and long term prospects. Market overview - as mentioned before in this report, Staffline's customers have been suffering from rising wages and a tightening labour market. Wages have been getting more expensive and employees are getting more permanent work, instead of temporary work. Of course there are winners and losers from this process - the employees themselves probably don't mind getting a pay raise and a permanent job. The company blames Brexit uncertainty for this, which I guess makes sense if there are fewer EU workers available to put into temporary blue-collar roles. Staffline also says that its customers are worried about the so-called "no-deal Brexit", and are voluntarily reducing their use of temporary labour, so as to avoid a skills shortage in case they lose access to this supply: This is frustrating as Staffline is extremely well prepared for a tightening labour market, with well-developed strategies that will ensure that we continue to be in a position to supply all our customers' flexible labour requirements. The economy and consumer confidence are blamed. I note that the UK economy is teetering on the brink of a recession, but is not quite there. As the article linked to states, "there are a record number of people in work, and pay growth is strong". If you didn't know any better, you would think that this is good news for a company called "Staffline". But it's not the right kind of employment. Long term ambitions are unchanged: We do not believe the issues and distractions of H1 2019 have caused any permanent damage to the business, but that we have simply lost time in the development of the Group. Net debt is £89 million at the end of June, but the company raised about £37 million in new money in July. Lenders have insisted that there will be no new acquisitions until January 2021, and no dividends until then, either. They are getting an amendment fee for their efforts and will also get an exit fee when the debt facility expires. Good for them. Covenents are being relaxed for now, but will gradually become more strict next year. Forecasts are slashed. Liberum (via Research Tree) have reduced next year's EPS forecast from 42.6p to 29.5p. My view - definitely "cheap". Very ugly, too. The problem that I find with the recruitment sector in general is that firms seem to be undifferentiated from each other. Staffline claims to be differentiated, e.g. in its Recruitment division: We have developed a unique methodology... to systematically improve worker engagement. ...we have found the long sought-after solution to the previously unanswered question of how to improve the engagement of a large blue-collar workforce. Our proprietary solution has significant applications beyond just the scope of our existing recruitment business. I am unable to judge the veracity of this. The main attraction with this share (besides the cheap valuation) is probably the involvement of HRnet, now a 29.9% shareholder. GBP has strengthened in recent days as markets speculated that the Brexit outcome would be more favourable for the currency, but the combination of weak GBP and a weak share price at Staffline could possibly see HRnet swoop in for the rest of Staffline's shares. That could create a great result for Staffline shareholders, but if it doesn't happen, would you still be interested to own Staffline shares?
123gmtrader: Staffline - After the dust settles...PE of 3.6 136p Epic code: STAF (Sharewatch) There are two areas of potential within Staffline. One is a blue collar staffing agency, predominantly for the food industry, supplying fruit pickers and staff for ready meal factories and the like. The group is the market leader with an 11% share. The other emerging business is PeoplePlus, which trains apprentices in the retail space, runs adult education courses and also provides training to prisoners. Turnover has grown from nowhere in the past decade to around £1.1bn. But the real attraction is that based on forecast eps of 37.9p this year (fully diluted for extra shares now in issue) and 42.6p next, the PE drops to 3.2. Totally bonkers. £27m of exceptionals derail the share price As I describe below, 2019 has turned out to be Staffline’s ‘annus horibillus.’ There was a furore when two months ago it was discovered that the Staffing division had fallen foul of certain national minimum wage rules. For some of the workers it had been treating the five or ten minutes spent changing into required clothing on a worksite or washing at the beginning or end of a workday as non-compensable time. But it would be churlish to say that Staffline was alone in incorrectly interpreting the national minimum wage rules - even John Lewis recently discovered a £35m liability found in its payroll. At the same time, the company’s other division, PeoplePlus, which used to get most of its income from central government departments (with contracts that were related to getting people into work) was in a state of flux and being restructured. In the end, Staffline delayed its accounts whilst it had to appoint someone to carry out the National Minimum Wage Audit. It has been a complex self-review process because Staffline had to look back six years and each factory is individual and the layout might have changed over time. It eventually booked a £27.1m one-off exceptional cost in its FY18 results (£15.1m payroll exceptional and £12m exceptional at PeoplePlus for closing surplus offices and reducing headcount) but added that this would cause it to breach its bank covenants. With so much going on the market took fright and Staffline has ended up carrying out a placing and open offer to raise £41m at just 100p, versus the £10+ that the shares were trading at just six months ago. Scope to become a multi-bagger Yet listening to chief executive Chris Pullen last month, it is clear that the group faces a huge opportunity. As that message gets through, the share price should move ahead strongly and I see scope for multi-bagging. After a blowup like this, common sense says there is good reason for caution but I see three reasons for being positive on prospects. First, People Plus has transitioned into new areas such as becoming the largest Apprenticeship Levy service provider and the largest operator of adult education courses in the UK; and also the largest provider of learning in prisons. These are all new, high growth areas that didn’t exist two years ago. Second, the Staffing side is fundamentally a strong business and has low cyclicality as 70% of the temporary placements are in the food sector. Longstanding customers include Asda, Royal Mail, Morrisons, Muller and Lidl, and new wins last year included Pukka Pies, PepsiCo, Argos, Ocado and Hermes. Third, post the £41m fundraising the shares are well supported by a robust balance sheet with rapidly reducing debt (£48m or 1.7x net debt/EBITDA by the end of the year) and excellent cash generation as well as decent levels of recurring revenue. History You might remember that Staffline has featured before on SCSW although regular readers will recall that I sold the shares from Growth Portfolio 3 in May 2017 at 1225p when I first became a bit concerned about the election (which created political/contract risks for PeoplePlus) - I could never have imagined that the picture would change so soon. Although I sold it out of GP3 then, I think the time has come for GP3 to think about buying the position back. High risk, high reward. Staffline was established in Nottingham in 1986 and by 2000 had established a network of nine branches focused on providing blue collar workers. In July 2000, there was a buyout backed by ISIS and the previous chief executive Andy Hogarth joined the group as managing director. It was in that year that Staffline opened its first OnSite location with Jacobs Cream Crackers, developing a model for the food services sector where contract managers were placed on a customer’s premises to hire staff directly for that location. Market leader in blue collar recruitment Staffline is now the market leader in UK blue-collar recruitment with an 11% market share. Most of the revenues are derived from supplying blue collar contractors via a wholesale supply relationship. Overall the division had an underlying profit of £24.1m on sales of £1bn in 2017 but 2018 became a bit of a stub year due to the problems. However, a recovery to £22m operating profit is forecast this year. As Pullen, who took over as chief executive from Hogarth in 2018, notes Staffline’s OnSite model is to undertake the whole of the client’s temporary recruitment process, which is a continuous process essential to keeping plants open and running efficiently. It will have a dedicated contract manager at each client site as this allows Staffline to provide a better service, eg. the manager at an abattoir will have first hand experience of the environment and can weed out unsuitable employees early on. This all resonated well with the food processing, manufacturing and distribution divisions and Staffline proved highly resilient during past recessions. Although the Staffing side started off in the food sector, Staffline has diversified as it has grown. The number of OnSite locations jumped very sharply last year when it made six acquisitions, notably Grafton and Vital, and went from 337 to 463 customer sites. The food sector - whether this is working in a food processing factory or picking fruit in a field - is the largest chunk of this at c.70% of divisional revenues. Retail is around 20% and includes warehouse staff/logistics and HGV drivers and is benefiting from the move to e-commerce, which makes it defensive. Automotive and small manufacturing is the final 10% and is probably the weakest part. 60,300 temps placed at peak times Overall, Staffline places some 60,300 temps each day during the peak times like Christmas and the summer BBQ season and most of its success boils down to the huge scale of the Staffline blue collar database of candidates, which stands at c. 300,000. An estimated 75% of the staffing workforce that is deployed are EU migrant workers. The labour market is of course getting tighter as net immigration is falling, partly as a result of Brexit but also due to the weak pound, which reduces the attraction of working in the UK; in such a tight market, there is arguably increased demand for Staffline’s scale and network, which allows it to shift people from site to site and Pullen says that Staffline has not experienced too many issues filling its slots. In a fragmented market, small regional players are the ones who will face a struggle. Reduced attrition Key to this has been the rollout of a new digital strategy, aimed at improving worker engagement and reducing employee churn and driving both worker and customer loyalty. As Pullen explains, most of the workers he places are in the 25-35 age bracket and have smart phones, so it has been a natural move for him to launch a new App so that its workers can now provide feedback on their site experience (eg. for instance to report if their safety boots have been ill fitting or lockers were broken). This can be reported back to the client who can then make improvements. An increasing number of the workers now report onto the App daily in this way and Pullen says this alone seems to have helped reduce attrition amongst the workforce by 23% year-on-year. Staffline has also recently re-launched the group’s front end website, improving it so that it is picked up by more of the search engine queries and incorporating a sophisticated chatbot for booking interviews and this resulted in a record 50,000 direct-to-Staffline website applications in May. Excitingly, Pullen also talks about expanding the OnSite model for its existing customers into the Benelux market. Total Business Transformation The other side of the group, Staffline’s PeoplePlus operation, was established through three strategic acquisitions (Fourstar in April ‘11, Avanti in May ‘14, and A4e in Apr ‘15) to create the UK’s largest provider of the DWP’s Welfare to Work services. Although Staffline successfully ran those programmes for central government and more than extracted its acquisition costs, the division faced significant challenges in 2018. Under the historical Work Program contracts held, Staffline used to provide people with the training and support required to get them working; in so doing the government would reduce the long-term cost of providing benefits. These Work Programmes were expected to be replaced but instead in its wisdom, they were disbanded. Staffline had been expecting this and fortunately had been managing down its employee and office numbers over the past two years, but if anything, not fast enough. Last year saw PeoplePlus’ revenues decline 6% to £107m and operating profit fell 21% to £15m as the run-off phase and residual success payments continued to come in. Meanwhile, Staffline has been using the core skills and training competence it had to move the business into new areas: apprenticeship, learning and skills - in other words PeoplePlus income now derives not from getting people into work but addressing skills gaps. These are totally new areas to those that existed in 2017. As Pullen notes, in each instance it is a “fee for service” type of business and it has 70% of next year’s revenues already contracted. So what does it do? • Skills Services: Staffline is now the UK’s largest Apprenticeship Levy service provider. All employers with a wage bill of over £3m have had to pay a 0.5% apprenticeship levy into a government pot since 2017 and the levy amount, and additional government funds, can then be accessed for training and assessment on approved apprenticeship schemes run by PeoplePlus and others. By way of example, PeoplePlus provides the service to Lloyds Bank and will provide course material over 12-18 months for training people on customer service and leadership and it is able to draw down income month on month as it does so. It does this for several retailers. Of the £2.4bn in the government pot, only 10% of the funding is so far drawn down in the first year by the firms operating in the sector so the scope remains massive. Alongside this, PeoplePlus is the largest recipient of Adult Education budget funding for running short adult education courses. • Justice and Community: Staffline has a 25% share in prison education - providing classroom-based vocational training in areas like carpentry, plumbing and bricklaying. • Employability: Staffline also provides back-to-work education and skills support to the unemployed as well as advice to individuals wanting to start their own business. This year PeoplePlus is expected to report a small profit of c.£2m-£3m on sales of £100m (H1 loss; H2 small profit) before lift-off to £11m next year. Around £150m in new contracts were announced in Q1 and there are now 60 contracts in new business areas of which a third are central government, a third local government and the rest private sector. The revenue potential is dramatic with up to £689 million of contracts to be tendered next year against some £170 million last year. HRnetgroup buys 7.4% Although not out of the woods yet, this year’s results will have a distinct H2 bias. I think the shares are worth buying for those wanting a red blooded speculative addition to their portfolio. And anyone buying will be in good company as Singapore’s largest head hunter, HRnetgroup, has spotted the undervaluation and picked up 5m shares, a 7.4% interest. I am a buyer.
123gmtrader: Can sell my whole holding but have to go to NT to buy more. So just added £9k. This has trickled down on low volume. Looks like the mm's are filling an order and running out of pis selling. Just a waiting game imo. If HRnetgroup are happy paying £1.80 for 25% of the company then I am happy paying £1.56. Investors need to remember that HRnet have a cash pile of approx. £1.82 million and can easily buyout Staffline. They are in the same business as Staffline and have grown over the years by doing multiple acquisitions. They will want to expand and due to the fall in STAF share price and also Sterling, Staffline has become a bargain for them to pick up cheaply and allow them entry to Europe.
Staffline share price data is direct from the London Stock Exchange
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