27 July 2023

Empresaria Group plc

("Empresaria" or the "Group")

Trading Update and Notice of Results

Challenging market conditions continuing to impact results

Empresaria (AIM: EMR), the global specialist staffing group, today provides a trading update ahead of announcing its interim results on 22 August 2023.

Trading update

·      H1 net fee income down 9% year-on-year to £29.7m (down 10% in constant currency)

·      Adjusted net debt slightly increased to £8.7m (31 December 2022: £7.9m) with headroom slightly increased to £18.4m

·      Anticipated improvements to trading conditions have not been seen and we now do not expect these to significantly change in the second half of 2023. 

·      Full year adjusted profit before tax is expected to be materially lower than market expectations

As highlighted in the trading update on 23 May 2023, the softening of demand and slowing of hiring decisions seen across the Group's businesses in the second half of 2022 have continued into 2023.  These difficult market conditions have been experienced across the Group, particularly in the US.  The greatest net fee income impact has been on permanent recruitment which was down 24% year-on-year with temporary and contract down 8%.

Our Offshore Services operation, where there is a 28% non-controlling interest, delivered year-on-year net fee income growth of 15% against the first half of 2022.  Sales to UK clients, which primarily support the Healthcare sector, have continued to grow strongly, however sales to our US clients, the majority of which support the IT sector, have continued to be impacted by the fall in client demand seen in the second half of 2022.  

The Group has already implemented a number of targeted measures to manage its cost base, including reductions in headcount, and we continue to keep costs under review.  However, given the ongoing trading conditions, which we no longer expect to improve significantly in the second half of the year, full year adjusted profit before tax is now expected to be approximately £5m.

Financial position

Adjusted net debt as at 30 June 2023 increased slightly to £8.7m (31 December 2022: £7.9m) reflecting trading performance and a normal H1 weighting of certain key cash outflows.  Headroom has increased slightly to £18.4m reflecting improved efficiency in the management of cash balances.

Rhona Driggs, CEO of Empresaria, commented:

"We continue to face challenging market conditions which developed through the second half of 2022 and remained throughout the first half of 2023.  We have not seen the anticipated signs of sustained improvement as client confidence remains low and candidates continue to be reluctant to move in the current environment.  With the ongoing macro-economic uncertainty, we now expect these factors to continue to have an adverse impact on the Group's profits in the second half of 2023.

We have taken action on our cost base and will continue to maintain tight control over costs while ensuring that we are able to maximise opportunities as and when market confidence returns.  While we are disappointed with these results, we are continuing to execute on our strategic initiatives and are confident in the medium and longer-term prospects of the Group."

Investor presentation

In line with Empresaria's commitment to ensuring appropriate communication structures are in place for all sections of its shareholder base, management will deliver an online results presentation open to all existing and potential investors via the Investor Meet Company platform on Tuesday 22 August 2023 at 4:30pm UK time.

Questions can be submitted pre-event through the platform or at any time during the live presentation.  Management may not be in a position to answer every question it receives but will address those it can while remaining within the confines of information already disclosed to the market.

Q&A responses will be published at the earliest opportunity on the Investor Meet Company platform.

Investors can sign up for free via: https://www.investormeetcompany.com/empresaria-group-plc/register-investor.  Those who have already registered and requested to meet the Company will be automatically invited.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

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Enquiries:

Notes for editors:

§ Empresaria Group plc is a global specialist staffing group offering temporary and contract recruitment, permanent recruitment and offshore recruitment services across 6 sectors: Professional, IT, Healthcare, Property, Construction and Engineering, Commercial and Offshore Recruitment Services.

§ Empresaria operates from locations across the world including the 4 largest staffing markets of the US, Japan, UK and Germany along with a strong presence elsewhere in Asia Pacific and Latin America.

§ Empresaria is listed on AIM under ticker EMR.  For more information visit empresaria.com.