Programmed Maintenance Services: Like Talent 2, PMS provides a number of non-recruitment services to complement their recruitment operations (Integrated). But unlike Talent2, they aren’t making enough profit anywhere in their business to satisfy either analysts or shareholders.
On Friday 1 October, the share price shed another 4.5%, continuing its recent horror run. The fundamental problem being that their revenue line was grown nearly 400% in three years but their net profit in the same period has risen just 17%.
PMS’s interest costs on their long term debt is proving to be very heavy lead in their saddle bag right now.
Chandler Macleod: New CEO, Ian Baser’s stonking take-home pay of $1 million-plus, outstripped the earnings of any other CEO by more than 50%. This was due to the juicy bonus he received for quickly turning around the financial performance of CMG after the humiliation of CMG’s brief and disastrous foray into the ADF recruitment contract, won with some fanfare from Manpower.
Better margins, lower overheads and reduced interest costs all contributed to CMG’s $27 million, 12 month, turnaround in net profit.
Ross Human Directions: A succession of senior executives have come and gone at RHD over the past few years and Founder and major shareholder, Julia Ross is back in the big chair, yet again.
Like PMS and Talent 2, RHD does not rely solely on traditional recruitment operations to generate profit. RHD has proven itself to be Talent 2’s equal in turning managed services revenue into profit (EBITDA of $9 million from $94 million revenue) but less so in traditional recruitment (EBITDA of $3.8 million from $280.6 million revenue).
The Navis Capital/Peoplebank takeover is looming and RHD’s long-suffering shareholders will soon be on to greener pastures, much like Julia Ross herself, I suspect.
Clarius: After an explosion of growth in the (ex-CEO) Rob Collins era from 2001 – 2007, new CEO, Diana Eilert couldn’t meet the demands of the board and left in November 2008.
Since then Candle founder, Geoff Moles has resumed the CEO’s role and has concentrated on reducing costs, paying down debt (through a capital raising) and seeking greater revenue streams in Asia.
Staff turnover across all their brands continues to be a worry and a major bull-run on their shares, this time last year, proved to be temporary.
It’s hard to see where major improvements in the Clarius results are going to come from in the short term.
Ambition: The double whammy of a large exposure to the UK financial services market, causing top line revenue to drop by 33% between 2008 and 2009, and writing off nearly $30 million in goodwill, has been almost fatal for Ambition.
Co-founders Paul Lyons and Nick Waterworth admitted early this year that their 2009 goal had been ‘survival’. Long term shareholders are unlikely to see any sunshine soon as the Ambition shares remain friendless.
Rubicor: Current CEO, Jane Beaumont took over from founding CEO, Wayman Chapman in early 2009 and found herself faced with the toughest recruitment job in the country.
As a highly leveraged company, Rubicor was absolutely hammered from all sides during the GFC and their shares were dumped.
Huge debt and huge goodwill write-offs ($32.4 million in 2009) have made returning to profitability a monumental task for Beaumont. Better margins, reduced costs and the support of their major lender, ANZ, has seen Rubicor struggle off the canvas.
Rubicor’s management team must deliver strong profitable growth in 2011 to significantly cut their huge financing costs.
HJB: Their revenue continues to shrink. They continue to make a loss. Staff turnover remains an issue and their share price is lower than Rubicor’s. CEO, Robin Jerome, must be one optimistic and resilient guy.