The British recruitment agencies industry is wasting £293m worth of profit every year, according to a new study by business analysts Plimsoll Publishing.

The report finds that 15% of companies are making a loss, 10% are losing money for the second year running and 7% of companies made less than 3% return on investment.

The findings suggest that a staggering 1,100 of the 1,486 companies covered would make more profit under new ownership, resulting in £293m extra revenue in the industry as a whole. At the moment, that money is being simply thrown away because of companies’ failure to control their losses and manage their businesses more effectively.

The senior analyst on the project, David Pattison, said: “These results prove just why the recruitment agencies industry is currently hot with takeover talk and speculation about future ownership. It’s certainly no surprise that trade buyers and private financiers are taking a close look at the industry – some of these recruitment agencies businesses have huge potential that is not being realised at the moment. We’ve heard a lot about private equity firms recently, and this is one industry where they could reap rich rewards.”