Impellam Group publishes pre close trading statement
"Our staffing businesses are all expected to see year over year growth in net fees in the second half of the year with both our UK Staffing and US Staffing business seeing full year on year growth.
"The Group is planning to capitalise on the opportunities available in both the managed services and specialist staffing markets. Both the UK and the US Staffing businesses are keen to accelerate investment in headcount which will lead to upward cost pressure.
"Whilst we anticipate year on year growth in operating profits in both our UK and US Staffing businesses, the costs associated with both enhanced compliance requirements and the sourcing of medical professionals is still depressing net fee conversion in our Medacs business. Accordingly, Medacs will report year on year operating profit contraction in the second half, albeit at a slower rate than we saw in the first half.
"The Group's staffing businesses, in total, are therefore expected to see a small year on year decrease in operating profits. However, the outlook is promising with increased activity and recovering markets.
"Trading in our Carlisle Support Services business has shown some early signs of improvement. Changes to the management structure announced at the half year are starting to deliver the benefits we anticipated in the mobilisation of high volume labour solutions to the retail, transport and logistics sectors. Whilst second half trading will not show any material improvement due to restructure costs, the outlook is more favourable. However, the business has two long term contracts, one a substantial first generation out sourcing agreement, which have proven to be operationally complex, badly priced and financially onerous. In accordance with accounting standards, full provision will be made for the costs of the exiting of one and the future ongoing losses of the other. The total provision, amounting to some £13.0 million, will be taken as an exceptional item. Having carefully reviewed the contracts portfolio, we are satisfied that no other similar contracts exist in the Group.
"Total Group adjusted operating profit is expected to be about £5.0 million lower than the comparative period last year.
"During the year, Impellam has returned £19.8 million to shareholders in dividends. The return of cash to shareholders remains a key objective for the Group. A final dividend of 7.0p per share will be recommended. Further details of this will be announced in due course."