Hudson rebrands as Hudson RPO
Hudson Global, Inc. has changed its operating brand name from Hudson to Hudson RPO and has launched a new brand identity, logo, website, and investor relations presentation as part of this change.
This change marks the completion of a strategic realignment process launched several years ago to focus on the company’s core recruitment process outsourcing (RPO) business. This process culminated in the sale of all the Company’s agency recruitment and talent management operations in Europe and Asia Pacific in three transactions earlier this year.
Jeff Eberwein, chief executive officer, commented, “RPO is our core business because it offers a compelling value proposition for our clients, as well as strong growth potential for our stockholders.
“The size of the current global RPO market is an estimated US$5 billion and is projected to grow 10-15 percent annually going forward.1 In our RPO business, we focus on partnering with our clients to design recruitment and talent solutions to support their strategic growth objectives, and we are delighted to introduce our new operating brand name, logo, and website to showcase our vision of powering client success through our total talent solutions.”
The company first offered RPO as a service for clients in 1999 to a global pharmaceutical company in Australia. Eberwein said, “Now that the Company’s strategic realignment is complete, we are increasing our investment in people and technology to enhance our innovation and subject matter expertise, and to best meet our clients’ growth initiative. Our vision is to be the top RPO provider of professional roles in the industry.”
For investors, given the projected growth of the RPO industry over the coming years, the company is committed to investing in its RPO business to capitalise on these favourable market trends. In addition to its internal investments, the company will also begin to look at profitable, bolt-on acquisition opportunities in 2019 after it has finished building out the new platform for its operating business.
The company is very focused on generating profitable growth from operations, and is also committed to reducing corporate costs without impacting its operating business. The company believes the run rate for corporate costs in 2019 should be approximately $4m, which is about 50% lower than in 2018 including severance costs, or about one-third lower excluding severance costs. As part of the reduction in corporate costs, the company has relocated its corporate headquarters from New York City to Old Greenwich, Connecticut – a move that will reduce annual rent expense by more than 80%.
For 2019, the company expects to grow gross profit more than 10% versus 2018, and adjusted EBITDA before corporate costs should grow faster than this rate. This growth, along with the aforementioned decline in corporate costs, should enable the company to generate positive adjusted EBITDA in 2019. Longer term, the company’s goal is to grow its RPO business in line with industry growth, or faster, and for adjusted EBITDA margins to approach 20% of gross profit at the RPO division level, while holding corporate costs flat. Successfully achieving this goal should allow corporate-level adjusted EBITDA margins as a percentage of gross profit to approach the mid-teens range.
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