Pinnacle Staffing Group plc
Pinnacle Staffing Group plc
Interim results for the six months ended 5 July 2009
Pinnacle Staffing Group plc the specialist temporary healthcare recruitment group announces its interim results for the six months ended 5 July 2009.
Turnover was 19.3 million (2008: 19.9million)
Pre-tax Loss before credit for negative goodwill 425,000 (2008: Pre-tax Loss 6,234,000)
Nursing brands on new NHS PASA framework and well placed to grow revenue.
Doctors business continues to grow steadily.
The first half of the year has been a challenging period as we have introduced new processes and focused on improving the quality and potential profitability of the individual divisions.
The Nursing Division delivered results in line with budget. The new British Nursing Association ("BNA") branches which were opened in Bristol and Inverness made a valuable contribution to turnover. However overall progress was held back by weak performances in a few branches which suffered substantial reductions in revenue due to the loss of key clients. Management action has been taken to improve performance and attempt to rebuild the lost revenue. The contract with the Bristol, Bath, Weston and Gloucester NHS Purchasing Consortium commenced satisfactorily in April but is unlikely to contribute significantly to profitability. Nevertheless we expect the substantial cost-savings achieved by the Consortium will be of great interest to other NHS Trusts looking to reduce the cost of using expensive agency staff and will provide new opportunities for BNA.
The purchase of The Compliance Company (GB) Ltd was completed on 20th May 2009. Pinnacle now owns one of the best available systems for monitoring the compliance status of its workers. This is extremely important for Pinnacle as it builds on its relationship with the NHS to provide cost-effective flexible staffing solutions together with the very highest standards of training and compliance.
Pinnacle's doctors recruitment businesses which trade under the Medic International and Holt Doctors brand names have grown steadily since the beginning of the year under their new management. Demand for junior doctors has been helped by the requirements of the European Working Time Directive which from 1 August 2009 has reduced the number of hours which hospital doctors will generally work. The doctors recruitment businesses are now based in Skipton, North Yorkshire where an excellent team of recruiters and support staff has been assembled.
Medical Services performed below budget, mainly due to the lack of investment in recent years in developing a recruitment pipeline to bring qualified overseas candidates to the UK. The Board believes that there is significant strategic value in Pinnacle's Medical Services division. One new partnership has already been established and the pipeline is being rebuilt, however it will take time before significant progress is made.
The invoice discounting facility provided to the operating subsidiaries by Barclays Bank plc has been extended until 1 September 2010 on broadly similar terms as previously in place.
The Nursing Division is expected to have a much better second half as our key nursing brands BNA, Mayfair Specialist Nurses and Grosvenor Nursing Agency build on their new framework positions. The Doctors recruitment businesses are expected to maintain their growth rate and should make a modest profit contribution if the current market conditions continue. Medical Services will again be loss-making as we invest in the division to improve its performance.
The Board is conscious of the fact that the rate of progress in bringing about a change in Pinnacle's fortunes appears to be painfully slow. Much valuable work has been done over the last twelve months to make Pinnacle a more dynamic, efficient business however much still remains to be done. In BNA we have changed our recruitment processes so that at last we now have a good flow of qualified candidates. Our next focus is to develop our client base and forge new relationships with individual NHS Trusts within the new NHS PASA frameworks. Our ambition is to double the size of our nursing division through organic growth over the next three years. This will undoubtedly place strains on the business but we now have a firm base on which to build and look to the future with confidence. In the short term we are dependent on NHS Trusts continuing their use of agency nursing staff and the satisfactory introduction of the new national frameworks. The Company remains on track to be profitable in the second half of the year. However as we currently have a higher than anticipated cost base, we now expect to fall short of our target of reporting a small profit for the year as a whole.