Bad times but NRG boss is glad to have delisted

Mar 4 2010 by Iain Laing, The Journal

THE North East's biggest recruitment agency is hoping to grow its profits once again after a tough couple of years for a sector which has seen many rivals crumble or disappear.

Newcastle-based NRG has seen its revenues fall as the recession put most companies’ recruitment plans on hold or pushed them to cut staff rather than take on more.

The Grey Street-based firm’s first results since it delisted from the stock market in 2008 show revenues of £30m and profits of £1.9m for the 18 months to the end of 2009, which is almost exactly the same as the figure for the 12 months before that.

But founder and chief executive Lorna Moran said the business had moved to take advantage of economic change and had fared better than giant rivals such as Hays, Michael Page and Robert Walters which had made large staff cuts as revenues plunged.

“There have been good times and bad times over the last 18 months and our margins have been squeezed but we have adapted and the business is on a strong footing with good financing,” she said.

Mrs Moran, who founded her Grey Street business as Geordie Jobfinders in 1976, said she has had no regrets about taking her business off the stock market after 11 years which saw it treble in size, although its price eventually fell from a 2005 peak of £2.20 to around 35p.

“It was a great time to get out. The small caps had been absolutely destroyed and lots of people did what we did. It was not good for confidence seeing your share price fall,” she said.

And the company, which cut seven staff from its 100-strong workforce in the recession, is already looking at recruiting around the same number again as it develops new markets such as higher education.

Mrs Moran, who owns nearly 90% of the business, said that around half the company’s income currently comes from the public sector.

It had won large contracts for the Government and in social housing and was working more for universities over the last year.

NRG’s private-sector work ranged from large contracts for contact centre companies, which are increasingly relying on temporary staff, to high-level executive recruitment.

“From a client point of view it has remained business as usual. Our client base has remained and a lot of it has remained surprisingly buoyant,” she said.

And she said she was tentatively optimistic about the sector as the economy slowly re-emerges from the shadow of recession.

“I would be pleased if we can put on some growth in profits if not in revenues, but I’m not expecting miracles,” she said.

“I am reasonably confident going forward but I do think it will continue to be tough for a good while yet.”