Long time no speak, and there is quite a lot to talk about on STAFF. This seems to be a balanced company which can either use immigrant labour - which farmers etc tell us still be needed after
brexit, or they can be paid by the government to traain jup locals to do the jobs they are currently not doing. They are also making useful acquisitions in ROI and Scotland consolidating in an industry qwhere there are still lots of opportunities to do so.
The SP has recovered but IMHO still has some way to go.
Seems a very neat addition to the expanding business ni Scotland, after an earlier acquisition in Republic of Ireland recently.
For Immediate Release
15 May 2017
STAFFLINE GROUP PLC
("Staffline" or "the Group")
Acquisition of Brightwork Limited
Staffline, the Staffing and Employability organisation, today announces the acquisition of Brightwork Limited ("Brightwork"), a recruitment business based in Scotland specialising in temporary and permanent jobs in the drinks, warehousing, manufacturing and distribution sectors.
Brightwork has a long and successful history as a multi-sector recruiter for clients across Scotland from offices based in Edinburgh and Glasgow. As previously indicated, the Group has been developing its business in Scotland. The acquisition therefore represents an attractive strategic opportunity to increase footprint in this area, strengthening the Group's geographic reach across the UK, as well as bringing a blue-chip client base. Derek May, Chief Executive of Brightwork, will continue in his role to lead the business
The acquisition is expected to be earnings neutral in the current year and is being funded out of Staffline's existing resources.
Andy Hogarth, Chief Executive of Staffline, commented:
"Staffline is delighted to announce the acquisition of Brightwork. We have been increasing our capability in Scotland in recent years and this acquisition will accelerate the growth of both businesses as it provides scale, as well as greater geographic coverage and value added services. We can offer our clients a greater national service. We very much look forward to working with all the team at Brightwork and to building a great future together".
The trading update is in line with market expectations and very positive. This follows an expansion of the company's business in Scotland earlier in the week.
Staffline Group plc
('Staffline' or 'the Group')
AGM Trading Update
Staffline (AIM: STAF), the Staffing and Employability organisation, will hold the Group Annual General Meeting at 11.00am this morning.
At the meeting, Andy Hogarth, Chief Executive of the Group, will make the following statement on current trading:
"Following the record year of 2016 which saw significant growth in the number of our Staffing divisions OnSites and good progress as a fully integrated business from our PeoplePlus division, Staffline has continued to make excellent progress in the new financial year.
The Staffing division has continued to perform well with strong demand for its services from both new and existing customers. The number of OnSites continues to grow. We are still seeing no change in demand following the EU Referendum Vote and the Group continues to source record numbers of workers to supply this demand.
In PeoplePlus, the Group's Employability, Training and Skills division, we are seeing the benefits of the reorganisation of the division in 2016. The new business pipeline remains strong and we continue to bid for and win new contracts.
As a result, we are pleased to confirm that current trading is in line with market expectations and the Board remains confident of the Group's growth prospects with the "Burst the Billion" £1 billion revenue target still very much on track."
The Group expects to provide an interim pre-close trading update on Tuesday 4th July 2017.
and always the effect of the SP hovering around a break point in this case 1200.
The tough talk going on at the moment is alll aboout tactics for the brexit negotiations, and the effect on the decisions made on permanency of EU citizsens here and ours in the EU. I think thta this will be settled sooner rather than later when negotiations begin. It is in both sides' interests.
As for the effect in sourcing labour in a poor labour movement situation in the future from the EU to the UK, STAFF is in a good position to train up UK citizens to do the same job as their Polish or other counterparts now. They have the training and back to woor programmes to do this. If anyone is inetrsrtyed in the CEO's answer to these questions, they were put by Paul to him in an interview some months which we should still be able to access.
Also there would appear to be opportuntiies to grow both sides of the business - service and training - because of the opportunities for growth by acquisition in the former and the expansion at the enpense of others in government schemes based on their past sucess in getting people back into work.
So paradoxically, this is probably a very good buy-in point for this very well managed company with lots of opportunity for expansion.
Looking at the business currently servicing the SPD empire, I think that STAFF would want to run it in a more professional way, and I guess that means more cost for Ashley. Also, would STAFF want to walk into the lion's den? Not exactly a happly place to work, and always in the limelight - for the wrong reasons. Not STAFF's modus operandi by any means.
Still STAFF no doubt ready for further expansion on the right terms, to take the SP back towards their rightful place.
Finncap have today reiterated their Buy and a 1600p target - here's their summary as posted elsewhere FYI:
Framework position secured, contracts next
The share price is factoring in significant risk on Stafflines ability to replace its Government contracts and weather any storm that Brexit produces. However, Staffline is the only company to have won a place in all seven regions of the new Work and Health Programme framework, flexible labour (such as that provided by Staffline) is an essential part of the UK economy and the group has a proven ability to continue to grow against changing market conditions. We expect contract wins to be announced throughout 2017 and reiterate our Buy recommendation.
Contract wins likely. Right at the end of 2016, the Government awarded
positions on the new Work and Health Programme framework. Staffline won a
position on all seven regions, the only company to do so. Contracts will now be
bid for and the scene is set for Staffline to announce a series of wins.
Breadth of opportunity. On top of this framework (which is likely to be worth
c.£1.7bn over four years), Staffline has opportunities in providing
apprenticeships (funded by the £3bn levy), win further probation contracts and
grow its communities work.
High standards and quality of service. Some providers of blue collar,
temporary workers operate questionable working practices. Staffline has built
its brand on providing the highest quality of service, fully compliant with
regulations and actively engaging in improving market working practices. This
has supported market share gains as competitors have struggled to survive
under tighter regulation and a greater focus on quality by clients.
Strong cash flow. Other than a timing issue at the end of FY 2015, cash flow
has been consistently strong. Operating profit conversion was 117% in 2016
and averaged 95% over the past five years. A move into net cash is possible in
2017 (we forecast early 2018).
1615p target based on sum of the parts. We value Staffing at a 20%
premium to Hays and SThree due to the better growth track record and
Peopleplus at a 25% discount to the outsourcers given the need to renew or
"Buy Staffline: it's growing fast and undervalued
01 February 2017
Andy Hogarth, chief executive of Staffline, the recruitment firm, certainly believes in clear and ambitious targets.
At the end of 2010 he said he wanted to treble the treble by growing the companys sales and profits over the following three years (the business had already trebled in size since its flotation on Aim 2004).
When he achieved that goal he set himself a new one: to burst the billion, by which he meant £1bn in sales, along with profits of £30m, by 2017. The profit element of the target was later increased to £50m following an acquisition.
While City analysts forecasts currently fall a little short of the goal, at £930m of sales and £45m of profit on the Ebitda measure, it would be rash to write off Mr Hogarths chances too early, according to one fund manager who knows him well.
Andy Hogarth is an individual we have known for 10 years and he has a huge amount of drive, energy and vision, Ken Wotton, manager of the Wood Street Microcap fund, told Questor.
He has successfully executed on the vision and has grown the business very materially.
He has been clear to the markets about his financial targets it is rare for chief executives to be so explicit and has then achieved them. So we are big supporters of his and believe there is a good chance that he will burst the billion this year. While some of the growth will have to come from acquisitions, Andy has a good record in that respect.
Staffline operates in two areas: blue-collar recruitment and employability, which involves helping unemployed people return to work under government schemes. The former is a big market, worth about £8bn a year across the country and despite its rapid growth Staffline still accounts for just 8pc of it.
The company is a meaningful player but there is plenty of scope for further growth, Mr Wotton said.
Although margins in this part of Stafflines business are relatively low at about 4pc, it is the faster growing of the two divisions and it largely serves non-cyclical parts of the economy 70pc of revenues come from the food sector (customers include Tesco (Frankfurt: 852647 - news) and Asda) and much of the rest from online retail.
Margins are higher in the employability division, at about 15pc, although growth prospects are to some extent limited by the Governments system of appointing firms to operate return-to-work schemes on a regional basis: it will be hard to increase revenues organically unless the firm wins the contract for a new region.
However, the company is well-placed to win such contracts, with top-quartile performance in achieving the schemes goals along with competitive pricing, Mr Wotton said. The division could also grow by acquisition, as the successful purchase of A4e in 2015 showed, while profits can improve as a result of increased efficiency.
The combination of the two lines of business is unique in Britain, giving the company scope for long-term synergies.
Last weeks results for the 2016 full year showed a 26pc rise in sales, just under half of which was organic growth, while earnings before interest and tax rose by 32pc. These results were marginally ahead of analysts expectations, despite the fact that the Brexit vote took place halfway through the year.
The management said the company had not seen any material impact from the referendum result. Nonetheless, the vote still hit the share price, which had already fallen significantly from a peak of about £16. Shares (Berlin: DI6.BE - news) fell as low as about 750p before recovering some of the lost ground to close at £10.73 yesterday.
A falling share price in conjunction with rising profits means a much lower rating or price-to-earnings ratio, of course. The shares now trade at about nine times forecast earnings for 2017.
I think they are old ie not updated only Reiterated with the same price target going right back to 5th July 2015 if you look down the list neither broker has changed but the company sentiment has. Both brokers a little lazy not changing their stance unlike the likes of Credit Suisse who started with 8.00 target in September.
As I said before if they change their targets after the results on 25th it will have more meaning to me.
16 Jan 17 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
04 Jan 17 finnCap Buy 1,008.00 1615.00 1615.00 Reiterates
04 Jan 17 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
12 Dec 16 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
17 Nov 16 finnCap Buy 1,008.00 1615.00 1615.00 Reiterates
27 Sep 16 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
22 Sep 16 Credit Suisse Underperform 1,008.00 - 800.00 Initiates/Starts
11 Aug 16 Berenberg Buy 1,008.00 900.00 1250.00 Upgrades
03 Aug 16 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
27 Jul 16 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
27 Jul 16 finnCap Buy 1,008.00 1615.00 1615.00 Reiterates
05 Jul 16 Liberum Capital Buy 1,008.00 1100.00 1100.00 Reiterates
05 Jul 16 finnCap Buy 1,008.00 1700.00 1615.00 Reiterates
Trouble with both broker figures they are old ie June 2015 and have failed to keep up with events unlike credit suisse who in September decided to take the negative sentiment into account and downgrade with 8.00 price target. I will be more keen to get those two brokers forecasts after the results on 25th
finnCap reiterate BUY and 1615p target.
Liberium reiterate BUY and 1100p tp.
So anyway you look at it the price should rise.
My view is that the worries about immigrants being used will fade away and the company share price will soon reflect the positive results here in an ever growing sector and a price nearer previous high of 1600p should result
Is there a reason why the STAFF BB is almost as dead as a dodo?
The prelims are due on the 25th, with a meeting for all shareholders that day - to be applauded for their invitation to all PIs too! Wish I lived within striking distance and coudl get there.
I understand the sentiment for A fall in the SP - employment of many immigrant workers; concerns about companies like SPD who employ low paid workers; concern that their government employment grants may dry up etc. However the trading statement was positive. An interview with Paul Scott some time before Christmas was positive.
Why THE LEVEL of fall in SP? Unjustified in my view. I am a shareholder and am tempted to add to my holding ahead of the prelims, given the very low PER etc
Amazing too that tight controls and reporting mean that can deliver prelims within 4 weeks of year end? Good that private investors invited to presentation too. Unfortunately don't live within striking distance of London or I would be there. Can understand why the SP is where it is, but a re-rating should be justified sooner rather than later. Buy ahead of results. I'm very tempted to add to my holding.
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