Norman Broadbent: Fee income down 13 per cent amid ‘challenging period’ for recruiters
Norman Broadbent has reported a slide in fees for the first half of 2024 as it became the latest company to bemoan a “challenging” period for the recruitment sector.
The AIM-listed firm said on Monday that net fee income dropped to £4.48m over the six months, down 13 per cent from £5.18m during the same period last year. The number was in line with the firm’s expectations and up 36 per cent on the first half of 2022.
Norman Broadbent swung to an operating loss of £56,000 in the half year, compared to an £78,000 profit during the first six months of 2023. For the full year in 2023, the company posted a £412,000 operating profit.
Its first-half revenue slumped to £5.04m from £6.06m, while underlying earnings before tax (EBITDA) dropped to £129,000 from £271,000. The firm said it remained confident that it would meet its target of £1.25m of EBITDA in 2025, “assuming the market improves as expected”.
Norman Broadbent is one of many well-known UK recruiters to experience a downturn this year as economic uncertainty made both employers and candidates hesitant to commit to new roles.
Industry giants Pagegroup and Hays have both shed around 15 per cent of their workforce since last year. Robert Walters has cut slightly less – 376 workers have gone, around eight per cent of total staff.
In contrast, Norman Broadbent said on Monday that its fee earner headcount grew 20 per cent year on year, and it has made additional hires in the second half of the year.
The firm said the recruitment market “remains tough, as reported in recent announcements by virtually all companies in our sector”.
“Norman Broadbent has delivered growth in headcount, capability and capacity in the first half of 2024 whilst also continuing to generate positive EBITDA,” added chief executive Kevin Davidson.
“This has been achieved amidst a challenging period for the recruitment sector and positions Norman Broadbent for future growth when the market recovers.”
Norman Broadbent argued that “several industry indicators suggest a gradual stabilisation is underway”. The firm noted “pockets of increased activity” and “gradually improving retainer income” so far in the third quarter.
“However, given the inherent quarter-to-quarter variability in the company and uncertainty around the pace of the broader recovery, it is difficult to say with any certainty whether we are back on a positive trajectory or if this is an isolated uptick,” the company added.
Despite the slump in fee income, Norman Broadbent said it continued to “actively identify and explore synergistic acquisition opportunities”.