Sales at NRG forecast to fall below expectations

May 3 2008 by Graeme King, The Journal

SALES at recruitment firm NRG (Northern Recruitment Group) are expected to come in £1m below previous expectations after the business saw a fall in temporary recruitment income.

The Newcastle company headed by Lorna Moran announced yesterday that its February forecast of growth in permanent and temporary recruitment would not be achieved.

NRG said in its February half-year report that its permanent recruitment operations would make progress, and the temporary division would see “a renewal of growth.”

Yesterday the company’s broker Brewin Dolphin revised its forecast for full year performance – saying sales were now expected to reach only £20m, rather than the £21m previously advised.

Pre-tax profits are now expected to hit £1.2m – below the £1.5m the broker was predicting, and Brewin has also downgraded its expectations of earnings per share performance.

The NRG statement yesterday said: “While our permanent revenue stream has remained strong in the third quarter, our temporary revenues have weakened and we expect this trend to persist for the remainder of the financial year to June 30, 2008. Taking this into account, we now expect that our results for the current year will be somewhat below market expectations.”

A statement from Brewin Dolphin said: “The weakness in NRG’s temp business, highlighted at the time of the interims in February, has continued into the second half, and no change to this trend is expected in the final quarter. We are downgrading our earnings per share forecasts by 21% for both 2008 and 2009.”

When NRG last updated the market in February the firm blamed a freeze on public sector recruitment for slashing its profits by nearly half.

The company published pre-tax profits down 46% to £540,000 as sales slipped to £9.9m from £11.2m a year earlier.

NRG is one of the best known recruitment firms in the North East with prominent headquarters in the heart of Grey Street in Newcastle.

The business was founded by Lorna Moran in 1976 as Geordie Jobfinders and has developed into the business it is today over the last 32 years. The business is known for handling a large number of public sector contracts.

While its headquarters are in Newcastle, the group has other offices in Tees Valley, Edinburgh, Glasgow, London, Middlesbrough and York.

Lorna Moran was awarded the MBE in 2001 for services to employment creation, and she is also known for her work with the Entrepreneurs Forum.