Demand for staffing services and multiple acquisitions drive PeopleIN’s record results

Demand for staffing services and multiple acquisitions drive PeopleIN’s record results

Image via PALM scheme website.

Highly acquisitive staffing and recruitment firm PeopleIN (ASX: PPE) has deftly captured increased organic demand for its services in FY22, bringing operating levels to heights greater than pre-COVID levels.

PeopleIN says its record financial performance for the full year and business growth were backed by a business model that remains resilient, even in current uncertain economic conditions.

The company today reported its revenue grew by 54 per cent to $682.3 million, while normalised net profit after tax and amortisation rose by 28 per cent to $31.9 million. PPE says these results were driven by demand for employees across all sectors, translating into record billing hours and placement fees.

The results follow an acquisitive period for PeopleIN, which bought four companies in FY22 including Vision Surveys QLD, GMT Group, Perigon Group and FIP Group, taking its total number of acquisitions since listing in 2017 to 14. The four made a “solid” contribution to EBITDA during the financial year of $6.6 million.

The latter of the four deals saw PPE take control of food sector staffing business Food Industry People for $45 million in June. Established in 2006, Brisbane-based FIP is a national workforce solutions business with around 4,500 people in work, and specifically addresses labour shortages in Australia through the attraction, onshoring and employment of workers from the Pacific Islands under the Pacific Australia Labour Mobility (PALM) Scheme.

PPE shares spiked by 11.64 per cent this morning on the back of the Brisbane-based group’s announcement to $3.74 per share.

PeopleIN CEO Ross Thompson says the company is now larger than ever and operates in a diverse range of sectors thanks to the multiple acquisitions, positioning the company well to take advantage of critical demand for staffing services, especially amid record low unemployment.

“Operating conditions continue to be positive for PeopleIN given the strength of the employment market and unprecedented demand from clients for employees,” Thompson said.

“Based on the operating results for the financial year and current economic conditions continuing, PeopleIN expects strong organic growth performance to continue in FY23.

“The number and diversity of our clients, and critical demand for their services, mean that our core business is resilient even in the event of economic uncertainty. Our strategy has always been to focus on growing in sectors that are defensive and have long term demand for talent.”

PPE’s earnings also grew during the period, up 23.9 per cent to $47.2 million, and the company has declared a 13 cents per share dividend for the full year, up 23.8 per cent on FY21.

The company now services over 4,000 businesses across three verticals (healthcare, professional services, and industrial & specialist services), and has a nationwide footprint via its 26 brands and 33,500 workers.

In order to address labour supply shortages, PPE says it will ramp up onshoring of talent, international recruitment and upskilling. It also intends on expanding further, noting its acquisition pipeline “continues to be strong with a number of acquisitions under review”.

The three sectors it operates in are ‘defensive’ and have a strong demand outlook according to PPE, which it says provides mitigation against any potential changes in macroeconomic conditions.

In the professional services space, PPE expects its blue chip client base to continue to invest in business and process optimisation, outsourcing, compliance and digital transformation. It is also buoyed by the Australian Government and the tech sector’s shared commitment to achieve 1.2 million tech jobs in Australia by 2030.

The health sector is expected to add 301,000 jobs by 2026, with growth in the space driven by a global nursing shortage, government commitments to health including Medicare Urgent Care Facilities and aged care, a growing spend on the NDIS and heightened demand for mental health services.

In the industrial & specialist services spaces, which includes the education, accommodation, hospitality and construction segments, PPE says it is able to service a variety of high-demand areas.

Particularly, the company says it is well positioned to quickly move contractors across sectors depending on demand, and is made confident by government commitments to investment in apprenticeship and traineeship initiatives.

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