FINANCIALS: Reports from Capita, Cross Country Healthcare and PageGroup

Capita, Cross Country Healthcare and PageGroup have experienced mixed fortunes in a bumper day for results in the recruitment sector.

This morning, business process outsourcing provider Capita released full-year results for 2019, revealing adjusted profit of £275m, down 2% on the previous year, along with adjusted net debt of £790.6m, which was up from £466.1m 2018.

The group also confirmed it was exploring the sales of non-core businesses to simplify the its portfolio

Capita CEO Jon Lewis pointed to two years of “significant progress” in which the group had undergone a multi-year transformation aimed at creating the foundations for long-term, sustainable success.

“We have continued to simplify and strengthen the business, fix legacy issues, rebuild trust with clients, take out cost, reduce risk, and invest in our growth capability.

“Transforming an organisation of Capita’s size is a complex challenge; there remains more to do and it is requiring more investment than we had expected in 2018.

“But our plan is the right one and remains unchanged. I am confident that, with the work done to date and investment made in 2019, we can deliver organic revenue growth for the first time in five years in 2020.”

Over at PageGroup, the international recruitment group revealed in its 2019 results which revealed group revenue over the period had increased 7% in constant currency from £1.54bn in 2018 to £1.65bn. The group also posted a 5% increase in gross profit in constant currency year-on-year from £814.9m to £855.5m. In the UK, GP was down 2.4% to £135.1m from £138.4m in 2018.

CEO Steve Ingham hailed 2019 as a record year for the group with GP, operating profit and profit before tax all increasing, but added: “The slowing growth that we saw in the second half of 2019, caused by a number of macro-economic challenges, have continued in the first two months of this year. In addition, we have seen the emergence of COVID-19 in Greater China. This, combined with the existing challenges, led group GP to decline by -3% in these first two months.

“In our market-leading Greater China business, where COVID-19 first emerged, we have around 550 people across nine offices, we reacted swiftly in challenging circumstances, recognising that the health and safety of our employees, candidates and clients was our top priority. With consultants continuing to work via home access, we were able to maintain contact with both candidates and clients. 

“After periods of office closure in some cities, we had over 90% of consultants back in our offices by the end of February. Business was transacted using a range of technologies and while there was almost no face to face contact, in the first two months we were still able to deliver GP at [around] 65% compared to 2019.

“PageGroup continues to have a flexible and highly diversified business model that enables us to react quickly to changes in market conditions. We are clear market leaders in many of our markets, with a highly experienced senior management team, which, we believe, positions us well to take advantage of all opportunities during 2020.”

And late yesterday, US healthcare recruiter Cross Country Healthcare revealed it has posted a 7% rise in revenue year-on-year, according to its Q4 2019 results.

The results, released late yesterday, reveal Q4 2019 revenue of $215.1m (£194.7m) with consolidated GP margin of 24.7%, down 50 basis points year-on-year. Net loss attributable to common shareholders was $1.1m, compared to $19.7m in the previous year and $3.1m in the prior quarter.

For the full year, the group posted consolidated revenue of $822.2m, an increase of 1% year-over-year. Consolidated GP margin was 24.8%, down 90 basis points year-over-year. Net loss attributable to common shareholders was $57.7m compared to a net loss of $17.0m in the previous year.

“I am very proud of the progress we have made throughout 2019, and once again we met or exceeded guidance for revenue and profitability in the fourth quarter,” president and CEO Kevin Clark said.

“2019 was clearly a successful turnaround year for Cross Country, and with the investments we have made throughout the year taking hold, we enter 2020 in a much stronger position.”


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