29th Jan 2015 10:48
LONDON (Alliance News) - Irish employment services group CPL Resources PLC saw its shares drop Thursday, after reporting a lower first-half profit, despite seeing 5% revenue growth, hit by investments it is making in the business, and said it continues to face margin pressure across the temporary staffing market.
The group left its interim dividend unchanged at 4.75 cents per share, having reported a pretax profit of EUR6.1 million for the six months to end-December, down 13% on the prior year's profit of EUR7.0 million.
"We have made significant investment in our people, operations, infrastructure and facilities, and much of the associated cost has been charged against profits. As a consequence, our conversion rate of gross profit to operating profit has fallen to 21.1%, from 25.4% in the same period last year," the company said in a statement.
Revenue during the period rose 4.8% to EUR193.2 million, up from EUR184.3 million in the first half of last year.
CPL said it is seeing "gradual improvements" in market conditions, but is still facing "significant" pricing challenges and economic headwinds in a number of sectors and locations.
The group said its gross profit generated from permanent placements in the six month period was EUR11.2 million, an increase of 11%. However its gross profit generated from temporary assignments grew only 1%. The temporary placement gross profit makes up 60% of the group's overall gross profit.
"Margin pressure continues across the temporary staffing market, and this market segment remains highly competitive," the company said.
Shares in CPL Resources were down 14% at 440.00 pence mid-morning Thursday.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
CPS.L