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Empresaria - much better performance in the second half of the year

Empresaria Group plc Has Issued A Trading Update


Full year pre-exceptional earnings in line with market expectations
Strong cash generation in H2 with reported net debt reduced by approximately 3m since June
Second half revenues from continuing businesses of 103m (H2 2008: 104m) down 1%
Second half net fee income from continuing businesses of 22m (H2 2008: 25m) down 12%
Full year revenues of 195m (2008: 208m), down 6%
Full year net fee income of 41m (2008: 51m), down 20%
Positive performance in H2 reflecting stable or improved trading conditions in selective markets (most notably UK and Germany), increasing contribution from smaller companies in developing economies and the benefit of cost savings

More stable market conditions in the UK and improved trading conditions in Germany and within developing economies have resulted in a much better performance in the second half of the year. It is encouraging that, through a process of selective cost reduction balanced by support for growing operations, Empresaria has maintained a global network and staffing infrastructure and is well positioned to take advantage of opportunities created both by strengthening economies in Asia and Latin America and economic recovery in more developed countries.
As suggested in September, when reporting on results for the first half of the year, the more stable market conditions have led to only limited operational restructuring in the second half and consequently only a small exceptional cash charge to profits. Non-cash exceptional charges will be higher as, in assessing the performance of individual companies and markets, the Board has decided to write down goodwill carrying values of a number of smaller companies in the Group amounting to approximately 4.5m where a combination of profitability relative to carrying values and concern as to market outlook for some of these businesses justifies a prudent approach to impairment review.

The Board anticipates pre-exceptional profits for the year ended 31 December 2009 to be in line with current market expectations.
Empresaria starts 2010 with a lower cost base, with lower debt levels, with positive sales momentum from temporary staffing operations (representing 80% of group net fee income), and with optimism as to prospects for the New Year in a number of its key markets. Increased demand for temporary staff, particularly within Germany and the UK at the end of 2009 and in early 2010, has resulted in a better than anticipated performance in December and an expectation of a stronger than anticipated performance in January. The group will benefit in 2010 from its international diversification strategy with only 36% of group net fee income generated directly from the UK economy.
The Board, mindful of the continuing uncertain global economic outlook, will continue to manage the group prudently in 2010 with a particular focus on cost management, cash generation and profit growth. Over the longer term the Board is confident that trends underlying specialist recruitment, which include liberalisation of labour markets, demographic changes, skill shortages and demand for flexible labour solutions, will provide exciting growth potential.


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