 |
|
| CURRENT SECTION :: Market Reports | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
|
 |
Lower Turnover Lorien announce that their turnover in the first half of the year was cut from £58.5 million to £44.5 million. Their profits were cut from £1.3 million to just £0.2 million. At least they are making a profit, which most agencies are not. The good news is that they made a loss of £0.1 million in the first quarter, but made a profit of £0.3 million in the second quarter of the year. Lorien’s share price improved slightly, and now stands at 54p. Their market value is now 10 million compared to their Net Assets which now stand at £9.5 million. Lorien had managed to increase profits in each of the last two years, partly as their turnover didn’t dip as much as other agencies, but also because they took quick action to reduce their costs. However, they are now being hit in the same way that other agencies are being hit. They had warned in February that they couldn’t cut costs any further without cutting at the bone. They said that the economy had to recovery quickly or they would be hit too. How’s the Market? So has the jobs market recovered? It has to a certain extent, according to Lorien. The position has improved somewhat, but there is still a lot of market uncertainty Also, according to the company, in what I think is a great line, “the IT sector is witnessing a recession within a recession”. That’s put very nicely. The reduction in their Resourcing division income was caused not only by reduced demand but by reduced contractor rates as well. In Resourcing their revenues were down from £51.2 million to £37 million. Their margins were down from £5.9 million to £4.1 million. Helping them was the fact that costs fell from £2.6 million to £1.3 million – which is quite a cut. Said the company: “In our Resourcing business the results reflect the reduction in activity levels, contractor pay rates and margins seen throughout last year. Despite the year-on-year decline, I am pleased to report that the stability we had seen in the first two months of 2003 has continued with activity levels constant for the period”. Recovery Coming? So is a recovery imminent? According to the company:- The Board recognises we are much more likely to see the challenging business “environment for Resourcing continue than to see an imminent recovery. The combination of a reduction in demand and excess in the supply side continues to exert significant pressure on rates and margins”. Their Specialist Services division did well, with revenues up from £7.3 million to £7.5 million. Their gross margin rose from £2.2 million to £2.4 million. Their costs fell from £1.6 million to £1.5 million. Well Managed Lorien have ridden out the recession very well. They made £2.2 million profit in 2001 and £2.4 million profit in 2002. They have now made £0.2 million profit for the first half of 2003, with £0.3 million of that profit coming in the most recent quarter. There are not many agencies who have remained profitable all the way through the downturn. Lorien look to be pretty well managed and are in a good position to take advantage of any recovery. Perhaps only Spring Group, of the major agencies, are in a better position, with their cash pile of £51 million at a time when other agencies are struggling and are ‘dirt cheap’ in historic terms. Jul 31, 2003 Email this article Printer friendly page Previous Page
|
|
    |
||||||||||||||||||||||||
| All content © Contractor UK Limited | [Register for News Letter] | [Privacy Statement] | [Terms of Use] | [Top of Page] |