Empresaria Group (EMR) H1 2024 earnings summary

Executive summary

• Net fee income declined 9% constant currency like-for-like to £25.3m in H1 2024, with permanent placements down 21%, temporary and contract down 1%, and offshore services down 9%, reflecting challenging market conditions across all regions and sectors.

• Adjusted operating profit fell 8% constant currency like-for-like to £1.0m, down 23% on a reported basis, despite £2.3m in year-on-year cost reductions.

• Adjusted diluted loss per share was 1.2p, reflecting lower profits and allocation to non-controlling interests.

• Adjusted net debt increased to £13.5m (from £11.1m at 31 Dec 2023), with headroom of £10.5m.

• Strategic initiatives included exits from Finland and China, streamlined management, and enhanced productivity tools.

Financial highlights

• Revenue was £121.8m, down 3% year-over-year; net fee income down 15% reported, 9% constant currency like-for-like.

• Adjusted profit before tax dropped 60% to £0.2m; loss before tax was £4.4m.

• Administrative costs reduced by 14% to £24.3m; central costs down 13%.

• Exceptional bad debt expense in Germany resulted in a £3.0m impact to adjusted net debt.

• Average net debt for H1 was £10.9m, up from £7.9m last year.

Outlook and guidance

• Weak hiring trends expected to persist through H2 2024, but some early signs of demand recovery are emerging.

• Full-year adjusted results anticipated to be broadly in line with current market expectations.

• Focus remains on cost control, sales capability, and diversification to position for market recovery.

• Offshore and IT sectors seen as key areas for future recovery and growth.