Adecco surprises with a loss
SWISS recruitment group Adecco surprised the market yesterday with a second-quarter net loss of €147m (£126m), compared to expectations of a €29m net profit, and announced a new round of cost-cutting.
Adecco, the world’s largest recruiter, said that the loss was driven by impairment charges of €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 “initiated further restructuring measures”.
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.
The group expects to incur another €40m of restructuring costs in the second half, after charging €54m in the second quarter, €40m more than previously indicated.
Revenue slipped 31 per cent to €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.
The company also said it hoped to boost its professional staffing business with the acquisition of UK-based Spring Group for £108m, or 62p a share.
“With this transaction Adecco will strengthen its position in the fragmented UK market and further increase its professional staffing exposure,” Adecco said.
Shares in Spring lifted 18 per cent to 61.75p on the news, while Adecco shares dropped six per cent to €32.62.