Staffline boosted by demand for unskilled work in UK

by reuters.com - 07/09/2010

"Blue-collar recruitment specialist Staffline Group Plc (STAF.L) posted a 50 percent profit rise on Monday as it takes advantage of a glut of British jobseekers to plug a demand for temporary labour."

Shares in Staffline, which finds workers for food processors and manufacturers, rose 33.5 percent to 133.5 pence by 1006 GMT.

Staffline said pretax profit jumped to 2.1 million pounds ($3.2 million) in the first half on turnover up 70 percent to 83.4 million, boosted by demand for temporary staff, acquisitions and an increase in British people looking for work.

"Good people have lost their jobs through no fault of their own but they're good employees and therefore we can help get them back to work," Staffline Chief Executive Andy Hogarth said.

"We've seen an increase in the number of British born-and-bred people, our workforce is just under a third of British-born people, it was running at 20 percent a couple of years ago," Hogarth told Reuters in an interview.

Small-cap white collar recruiter Hydrogen (HYDG.L) also reported results on Monday, showing a modest profit, largely because of its increased focus on overseas markets.

"For us it's the international push ... 92 pct of our candidates work abroad already or would consider working abroad for their career," Executive Chairman Ian Temple told Reuters.

Large white-collar recruiters such as Michael Page (MPI.L) and Hays (HAYS.L) have sought to stress increased net fees and growth in Asia, Australia and the United States, while the economic climate in Britain remains tough.


UK FOCUS

Staffline, which also specialises in placing migrants from EU member states in temporary work in Britain, has cornered a niche in the food industry and is almost exclusively focussed on temporary placements. The company is in the unusual position of doing well out of a tough British economic climate.

The company's "OnSites" service -- its own offices based in large businesses for which they find workers -- has helped differentiate it from other recruiters.

"This has been their key differentiator ... a segment of their exposure is with food. While the value of food products goes down, the demand is there," Julian Tolley, head of research at Hoodless Brennan said.

"We see defensive qualities with a yield so this should be relatively attractive to private and institutional investors alike," Tolley said, maintaining a "buy" rating on the stock.

Recent acquisitions at Staffline have added about 5 million pounds in additional sales to first-half results, Hogarth said, and he expects their contribution to earnings by the end of the year to equate to around 45 million pounds.

For now, Hogarth wants the company to stay focused on its British operations, but he is interested in opportunities in Europe, most probably in geographies where Staffline's biggest clients operate, but he declined to be specific.

"The growth in temporary labour is going to be much greater in the blue collar sector. We think there's huge opportunities here. Whilst I would love to go trekking around the world, it's much safer for us to stay in the UK and Europe," Hogarth said. (Editing by David Holmes) ($1=.6511 Pound)

More Details: http://www.reuters.com/article/idUSLDE68510N20100906