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Adecco surprises with a loss

SWISS recruitment group Adecco surprised the market yesterday with a second-quarter net loss of &euro;147m (&pound;126m), compared to expectations of a &euro;29m net profit, and announced a new round of cost-cutting.<br /><br />Adecco, the world&rsquo;s largest recruiter, said that the loss was driven by impairment charges of &euro;192m on goodwill and intangible assets. It added that there were no signs of a recovery in its main European and US markets and that it has &ldquo;initiated further restructuring measures&rdquo;.<br /><br />Chief financial officer Dominik de Daniel said the firm, which has already shut branches and cut jobs to protect its margins, will cut more full-time equivalent employees.<br /><br />The group expects to incur another &euro;40m of restructuring costs in the second half, after charging &euro;54m in the second quarter, &euro;40m more than previously indicated.<br /><br />Revenue slipped 31 per cent to &euro;3.6bn as firms across the world slashed their workforces, but Adecco said the pace of decline had eased in most markets during the quarter.<br /><br />The company also said it hoped to boost its professional staffing business with the acquisition of UK-based Spring Group for &pound;108m, or 62p a share.<br /><br />&ldquo;With this transaction Adecco will strengthen its position in the fragmented UK market and further increase its professional staffing exposure,&rdquo; Adecco said.<br /><br />Shares in Spring lifted 18 per cent to 61.75p on the news, while Adecco shares dropped six per cent to &euro;32.62.