Peoplebank reports record earnings on back of IT&T growth

Stan Beer
Monday, 28 August 2006 09:55

IT People - Recruitment

IT&T recruiter Peoplebank Australia Limited (ASX:PBA) has reported record earnings growth of 160% in its first full year result as a listed company, following its IPO on 15 June 2005.

People posted a record net profit after tax of $4.1 million - an increase of 160% over 2004-05 and revenue growth of 15% over FY 2004-05 to $122.2m.

Peoplebank Managing Director Leon Lau said the strong full year result for 2005-06 was achieved as a direct result of growth in Peoplebank's business, rather than from any acquisition activity.

"The growth in revenue and EBIT is largely due to prevailing market conditions and strong demand for quality recruitment services in the IT&T arena, combined with improved efficiencies as a result of the increased scale of our business following the IPO," said Mr Lau, who founded Peoplebank in 1990.

"Peoplebank has focused on client service and delivery, particularly in the permanent recruitment area and this has resulted in improved operating margins.

"Increased turnover, good expense control and excellent growth in our higher margin permanent placement business drove the record 160% increase in net profit after tax," Mr Lau said.

Contracting services represents 97% of Peoplebank's revenue. Revenue from contracting improved by 14% on the previous year and the number of full-time equivalent billable contractors reached 971 by the end of the year.

Recruitment services - the traditional placing of permanent staff with clients for a placement fee - had represented less than 2% of revenue in recent years.  However, strong market conditions saw recruitment services - share of revenue grow to 3% ($3.3m), up 84% from the previous year.

"Peoplebank believes the permanent recruitment market will continue to provide significant growth opportunities over the next year," Mr Lau said.

"While there is considerable room to grow strongly within our specialist ICT sector, Peoplebank also believes sensible diversification in due course will see our operations expand to a range of white collar contracting with broader national geographic reach."