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USG Expects Improvement

USG Expects Improvement

Dutch staffing firm USG People NV says it has seen signs of recovery in some markets and it expects stabilisation or a slight improvement in business conditions for the remainder of 2009. The Netherlands' second-largest jobs company after Randstad reported third quarter profit that beat estimates on Wednesday. It declined to give a forecast but said there was an improvement in the early cyclical industries and regions.

USG's third quarter earnings before interest, taxes and amortisation and restructuring costs and some other items (underlying EBITA) was 24 million, double the preceding quarter and beating the average forecast of 20 million from a Reuters poll.

"For the rest of 2009 we anticipate a stable situation and in some cases a slight improvement," said USG, which has been cutting jobs and closing down branches, cutting debt and easing its debt covenants after suffering during the economic slump.

Earlier this week Dutch staffing association ABU said that Dutch staffing sales declined 22% in the four weeks to Oct. 4, similar to declines in the preceding six months.

Sales declines compared with the same period a year earlier were strongest in the technical sector, where revenue fell 31%, followed by a 23% decline in the administrative sector, ABU said in a statement.

Recruiters such as USG People and Randstad which report results on Wednesday and Thursday, have seen sales drop as companies cut back on hiring workers due to the recession.

Staffing firms' shares extended losses, with Randstad down 3.2% t at 28.04, USG People down 2.8% at 12.32 and Brunel down 2.4% at 20.60.
The shares underperformed the DJ European Industrial Goods and Services index .SXNP, which was up 0.1% and contains Randstad rivals such as Switzerland's Adecco and UK's Michael Page.

Since March, staffing sales have declined by 20% or more annually for each four-week period. Hours worked in the four weeks to Oct. 4 fell 22%, said ABU, whose data covers two-thirds of the domestic staffing market.

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