14th Mar 2019 11:02
LONDON (Alliance News) - Impellam Group PLC on Thursday said its profit declined in its most recent financial year due to, among other things, a sizeable number of investments and costs associated with new regulations.
Shares in Impellam were down 18% on Thursday at 450.20 pence.
The company's pretax profit for the 53 weeks to January 4 was GBP16.1 million, less than half its GBP37.9 million profit for the 52 weeks to December 29 2017.
The company continued its IT investments, including in its Ignite recruiters' operating system, and ShiftWise staff management technology.
In addition, Impellam also experienced a contraction in the UK retail, healthcare, and education markets. Moreover, Impellam also experienced the gross margin wind-down of two managed services programmes in 2017, both of which were in north America. The cost of complying with regulations, such as GDPR, was also a factor in its reduced profit.
Administrative expenses rose 7.7% to GBP259.4 million versus GBP240.8 million and separately disclosed items, which included legal costs and the restructuring and integration of its Bartech acquisition, increased to GBP5.7 million from GBP3.4 million.
Revenue for the period was GBP2.28 billion, up 5.1% from GBP2.17 billion the year before.
In July 2018, Impellam announced that it is intending to commence a share buyback programme that will return up to GBP12 million to shareholders over a 12 month period. The company said that, because the GBP12 million is equal to the amount it would have returned through dividends, it is not declaring a final dividend.
"Looking forward, we anticipate continued market and technological disruption and downward pricing pressure, as well as ongoing uncertainty from Brexit," said Impellam Chief Executive Julia Robertson.
"Notwithstanding this," Robertson added, "we anticipate an increasing return from our strategic investments in 2019, and this, coupled with a rigorous portfolio, operating model and cost base review means that we expect to see a return to higher levels of conversion of gross profit to [earnings before interest, taxation, depreciation, and amortization] and profit before tax."
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