City comment: what the public company announcements tell the rest of the market
11 August 2014
A number of public companies have announced results and trading updates in the past few weeks. Owners of smaller private recruitment businesses may wonder what relevance these announcements have to them, other than being a general comment on the market. The industry giants are perceived by many to operate in a different world without the same financial constraints and cashflow pressures as owner-managed businesses. So is it worth looking at their results?
Mon, 11 Aug 2014 | Philip Ellis, Optima Corporate FinanceA number of public companies have announced results and trading updates in the past few weeks. Owners of smaller private recruitment businesses may wonder what relevance these announcements have to them, other than being a general comment on the market. The industry giants are perceived by many to operate in a different world without the same financial constraints and cashflow pressures as owner-managed businesses. So is it worth looking at their results?
I believe the answer to this question is a resounding “yes”. One of the advantages private companies have over public companies is privacy. Small private companies have very limited reporting requirements when it comes to disclosing financial information, whereas all public companies are obliged to file detailed financial information every six months and larger businesses publish quarterly trading updates.
Public companies use these as an opportunity to advise shareholders and the rest of the market how their business is performing across various markets and geographies. While there could be a risk of drowning in numbers, the accompanying narrative can be very revealing and helpful. If the industry giants share this information, surely it is advantageous for their smaller, more nimble competitors to read, absorb and act on it?
I am not suggesting that a business should base its strategy purely on what others are saying, but decisions such as whether to invest in a new consultant, focus on permanent or contract staff or even open a new office may be influenced by this market knowledge.
Below are some brief extracts from public company announcements to illustrate the type of information available:
Randstad: April-June 2014
• Revenue, gross profit and earnings before interest, taxes, depreciation, and amortization (EBIDTA) growth
• Gradual recovery continues
• Strongest permanent quarter since 2008
• In the UK, construction and engineering stood out with over 20% growth
Impellam: January-June 2014
• Managed services growth including Medacs
• Outlook improved
• Growing headcount to capitalise on improving market conditions
Robert Walters: January-June 2104
• Revenue, gross profit and operating profit up
• Japan and UK strong
• Group headcount increased
Hays: April-June 2014
• UK revenue up 11%
• Permanent fees up 17%
• UK construction and property, and IT, both up 20%
• Senior finance business grew 18%
• Headcount increased
Three: January-June 2014
• Revenue, gross profit and operating profit up
• Banking and finance up 20%
• Energy up 52%
• Life sciences up 43%
• Permanent revenue up
• Growth in headcount
Hudson: April-June 2014
• Revenue down
• Gross margin up
• Loss reduced
• Losses partly due to non-recruitment activities that are in the process of being sold
• Growth in all major markets
Page Group: April-June 2014
• Small overall growth
• UK 11% growth
• China particularly strong with 37% growth
• US 17% growth
• Expect continuing increase in permanent fees
Harvey Nash: February-April 2014
• Revenue, gross profit and operating profit up
• Permanent fees strong in UK and US
• Permanent fees generally weak in Europe but contract strong
As can be seen, the public companies are generally performing well and anticipate continued growth, hence their investment in growing headcount. There are specific comments on market sectors and significantly more information can be found within the announcements.
Anyone interested in receiving notification of when particular public companies release announcements can set up free alerts from various online sources. I use Regulatory News Service (RNS), which is one of the systems that public companies use to file their announcements.
I believe the answer to this question is a resounding “yes”. One of the advantages private companies have over public companies is privacy. Small private companies have very limited reporting requirements when it comes to disclosing financial information, whereas all public companies are obliged to file detailed financial information every six months and larger businesses publish quarterly trading updates.
Public companies use these as an opportunity to advise shareholders and the rest of the market how their business is performing across various markets and geographies. While there could be a risk of drowning in numbers, the accompanying narrative can be very revealing and helpful. If the industry giants share this information, surely it is advantageous for their smaller, more nimble competitors to read, absorb and act on it?
I am not suggesting that a business should base its strategy purely on what others are saying, but decisions such as whether to invest in a new consultant, focus on permanent or contract staff or even open a new office may be influenced by this market knowledge.
Below are some brief extracts from public company announcements to illustrate the type of information available:
Randstad: April-June 2014
• Revenue, gross profit and earnings before interest, taxes, depreciation, and amortization (EBIDTA) growth
• Gradual recovery continues
• Strongest permanent quarter since 2008
• In the UK, construction and engineering stood out with over 20% growth
Impellam: January-June 2014
• Managed services growth including Medacs
• Outlook improved
• Growing headcount to capitalise on improving market conditions
Robert Walters: January-June 2104
• Revenue, gross profit and operating profit up
• Japan and UK strong
• Group headcount increased
Hays: April-June 2014
• UK revenue up 11%
• Permanent fees up 17%
• UK construction and property, and IT, both up 20%
• Senior finance business grew 18%
• Headcount increased
Three: January-June 2014
• Revenue, gross profit and operating profit up
• Banking and finance up 20%
• Energy up 52%
• Life sciences up 43%
• Permanent revenue up
• Growth in headcount
Hudson: April-June 2014
• Revenue down
• Gross margin up
• Loss reduced
• Losses partly due to non-recruitment activities that are in the process of being sold
• Growth in all major markets
Page Group: April-June 2014
• Small overall growth
• UK 11% growth
• China particularly strong with 37% growth
• US 17% growth
• Expect continuing increase in permanent fees
Harvey Nash: February-April 2014
• Revenue, gross profit and operating profit up
• Permanent fees strong in UK and US
• Permanent fees generally weak in Europe but contract strong
As can be seen, the public companies are generally performing well and anticipate continued growth, hence their investment in growing headcount. There are specific comments on market sectors and significantly more information can be found within the announcements.
Anyone interested in receiving notification of when particular public companies release announcements can set up free alerts from various online sources. I use Regulatory News Service (RNS), which is one of the systems that public companies use to file their announcements.
