Business Essentials for Professionals


9 Percent Rise in Q3 Core Earnings Posted by Staffing Giant Randstad

9 Percent Rise in Q3 Core Earnings Posted by Staffing Giant Randstad
Staffing agency Randstad said that it saw softness in the United Kingdom and its key market of the Netherlands even as the world's second-largest staffing agency reported a nearly 9 percent rise in core earnings in the third quarter on Tuesday.
Going up from 249 million euros in the three months to the end of September last year, the company clocked in at 271 million euros ($294 million) for the same period this year with regards to its underlying earnings before interest, taxation and amortisation (EBITA).
Also ahead of analysis expectations and noting a 7 percent rise on a year-on-year basis in revenue generated, the Dutch firm also posted revenue of 5.34 billion euros.
Meanwhile,in the same quarter, there was a rise of 7 percent in the   "perm fees" it obtained which is the money that Randstad receives when clients are permanently hired via the company.
"We've seen already 12 quarters of 4 to 5 percent growth so pretty stable picture. Europe is doing very nicely, most countries are in mid-single digit growth…so overall a pretty stable positive picture," Jacques van den Broek, chief executive of Randstad, told CNBC in a TV interview on Tuesday.
There was a growth of 1 percent in the revenues that the company managed to generated from North America, the company's largest market. But while underlying EBIT declined by 8 percent and the revenue generated fell by 15 percent in the third quarter, the results were depressing as far as its business in the U.K., which accounts for about 4 percent of sales, is concerned.
Due to fears that the move could impact hiring and hit the economy across Europe, Randstad's share price fell after Britain voted to leave the European Union (EU) in June.
But even as the U.K. market was softer for the company, it had not spilled over into other regions, the CEO of the company said that these concerns were overstated.
"The U.K. in our topline we see a slight growth. Permanent placement is 4 percent down so that is for us a sign of relative uncertainty, not so much an economy that is going down, but uncertainty. But in no way it translates into our European numbers which are actually quite strong," van den Broek said.
U.S. online recruiting firm Monster for $429 million in cash was agreed to be bought by Randstad earlier this year. But ever since the announcement, the deal is being tried to be blocked by Monster's largest shareholder, MediaNews Group, which owns nearly 12 percent of the company. MediaNews Group plans to nominate seven directors to replace Monster's entire board after the company called the sale process "flawed and unorganized" last month.
But Monster backs the acquisition. While the CEO played down any issues with the deal, Randstad's offer for Monster expires on Friday.
"I'm not concerned. We put a bid out which we think is a fair offer, and our offer expires Friday then we'll see," van den Broek told CNBC.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc