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Japan – Persol Holdings full year revenue boosted by PersolKelly and Recruiting

15 May 2019

Persol (2181: JP), the Japanese staffing giant, reported revenue today for the full year ended 31 March 2019 of JPY 925.8 billion (USD 8.46 billion), an increase of 28.2% when compared to the previous year.

The Tokyo-based company operates a joint venture in the Asia Pacific region with Kelly Services Inc. (NASD: KELYA), which rebranded as PersolKelly last  year.

(JPY millions) FY 2018 FY 2017 Change FY 2018 (USD millions)
Revenue  925,818 722,183 28.2% 8,466.6
Gross Profit 206,517 167,438 23.3% 1,888.7
Gross Margin 22.3% 23.2% N/A N/A
EBITDA 59,972 48,026 24.9% 548.4
Operating Income 44,111 36,068 22.3% 403.3
Net Income 24,631 7,769 213.5% 225.2

Revenue growth was boosted by the growth of Persol's overseas businesses.

“The PersolKelly segment succeeded in expanding sales structures in each country underpinned by the strong business conditions in APAC markets,” the company stated.

In January 2019 Persol Holdings announced the acquisition of Avanti Staff, a Tokyo-based temporary staffing firm. The group added that the impact of the acquisition on its full year results will not be significant.

The group made changes and rebrands to its subsidiaries. The group merged ten subsidiaries within the Temporary staffing/BPO (Business Process Outsourcing) segment with effect from 1 October 2018.

For the revenue segment below, Persol noted the financial closing date of Programmed differs with Persol by three months. The deemed acquisition date for business combinations was set as 30 September 2017 and as such, Programmed’s contribution to the results commences from January 2018.

Revenue by segment

(JPY millions) FY 2018 FY 2017 Change FY 2018 (USD millions)
Temporary Staffing/BPO 509,538 481,071 5.9% 4,659.8
Recruiting 85,826 72,841 17.8% 784.8
Programmed 201,476 54,512 N/A 1,842.5
PersolKelly 76,106 65,774 15.7% 695.9
ITO 33,644 28,988 16.1% 307.6
Engineering 29,357 27,795 5.6% 268.4
Adjustments -15,883 -13,140 N/A -145.2
Total 925,818 722,183 28.2% 8,466.6

In Temporary Staffing/BPO the group said favourable corporate results and structural shortages of labor were underpinned by strong demand trends in FY 2018.

Within Recruiting, Persol stated, “During this consolidated fiscal year under review demand for HR resources continued to be strong, underpinned by changes in the awareness of individuals regarding changing jobs.”

In PersolKelly, the group said revenue growth was the result of expanded sales structures achieved through active strengthening of sales team headcount in response to the buoyant APAC market environment.

The ITO segment reported a revenue increased due to growth in IT systems investments.

In the Engineering sector, Persol said the bullish ordering trend from clients was underpinned by favourable demand for development services in the core automobile related sector.

Looking ahead, the group is forecasting revenue of JPY 1 trillion (USD 9.14 billion) for the year ended March 2020.

In trading today Persol Holdings shares closed at JPY 1,969.00 (USD 18.01), up 2.02% on the day and 27.86% above the 52 week low of JPY 1,540.00 (USD 14.08) set on 25 December 2018. Based on its current share price the company has a market value of JPY 456.84 billion (USD 4.17 billion).


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