7th Nov 2014 08:36
LONDON (Alliance News) - Prime People PLC saw its shares rise Friday after it reported a rise in first half profit, driven by further growth in its permanent placements business, and said it expects further growth in the UK and Asia in the second half of the year.
The staffing company said its pretax profit rose to GBP0.6 million in the six months to end-September, double the GBP0.3 million it reported a year earlier, as an 18% rise in revenue to GBP8 million, from GBP6.8 million, more than offset a rise in administrative costs to GBP4.4 million, from GBP3.5 million.
The company blamed higher commission paid to its agents for improved performance, plus a rise in the fee earning headcount, for the rise in costs.
However, the drive to improve performance paid off, with net fee income in the first half up by nearly a third to GBP5.0 million, from GBP3.8 million a year earlier. It said it performed strongly in the UK and Asia, with UK net fee income up 28% to GBP3.2 million and Asia net fee income up 59% to GBP1.4 million.
"Our Singapore office, which is our most recently established office, has continued to develop and is now profitable, which compares well with the break even performance reported in the same period last year," it said.
The company has been focusing on growing its permanent placements business, and said that business made up 93% of net fee income in the half compared with 90% a year earlier.
Prime People also said it is expecting an annual tax rate of 21% for the current year, down from 23% last year. Its basic earnings per share in the first half increased to 4.17 pence, from 1.94p.
It said it will pay an interim dividend of 1.75 pence, up from 1.00p last year.
It had cash of GBP1.1 million at the end of the half, down from GBP2.8 million a year earlier. However, it had returned GBP1.8 million to shareholders in July.
"We have reasonable expectations that the UK businesses will continue to perform at least at similar levels to the first half of the year. We are looking for continued improved performance from our businesses in Asia which we believe will provide us with increased opportunities for growth in the mid to long term, but continue to have conservative expectations as to the likely performance from our businesses in the Rest of the World," the company said in an outlook statement.
"The focus for the group is to maximize the returns from recent investment in the business and continue to recruit new heads into those markets where there is potential for NFI and profit growth," it added.
Prime People shares were up 12.0% at 98.00 pence early Friday, one of the best-performing stocks on the London main market.
By Steve McGrath; [email protected]; @stevemcgrath1
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