Poolia continues to grow and improves profitability of core business
Managing Director and CEO Erik Strand’s comments on Poolia’s year-end report for 2005 Poolia’s sales totalled SEK 270.0 M for the fourth quarter and SEK 1,008.7 M for the full year. An operating loss of SEK 54.9 M was reported for the fourth quarter, of which continued adjustment measures in Germany accounted for a loss of SEK 58.9 M. For the other units, an operating profit of SEK 4.0 M was reported for the fourth quarter and of SEK 26.3 M for the full year, which corresponded to a quadrupling of the operating margin.
The trend in all of Poolia’s markets remained strong during the fourth quarter of 2005. Poolia Sweden’s sales rose 26% during the fourth quarter, compared with the year-earlier period, and the operating margin for the quarter was 5.2%. In total during the year, Poolia Sweden showed growth of 23% and increased its operating margin by slightly more than 2 percentage points. In the United Kingdom, the intensified effort in Reading and Edinburgh, which started at midyear, continues. The operations in both of these towns had an adverse impact on operating profit during the quarter. Revenue from the UK declined somewhat during the fourth quarter, partly because an agreement structure with a major customer was changed from gross to net invoicing, which had an impact on full-year figures. The full-year operating margin was 3.9%, in line with the preceding year. Following fiscal year-end, Lynda Pickess, who has extensive experience of the UK staffing sector, was appointed new Managing Director of Poolia UK. Operations in the Other Nordic countries continued to show the favourable trend that started earlier in the year, with Denmark and Finland noting the strongest performance. Volume in the other Nordic countries more than doubled during the fourth quarter and the operating margin was 6.3%. In total for the year, the other Nordic countries reported growth of 27% and an increase in operating profit by slightly more than SEK 3 M. In Germany, a decision was taken during the fourth quarter to focus operations entirely around Poolia’s core business and thus to intensify the restructuring work that was under way in Hamburg during the year. As a result of this decision, a provision of SEK 10.8 M and a goodwill impairment loss of SEK 48.1 M was posted. The goodwill remaining in Germany totals SEK 3.8 M. With respect to the full year, a favourable trend was noted within the core operations in most locations. Due to the volume decline and adjustment work under way in Hamburg, however, the total result for Germany comprised reduced revenues and a loss. The operations of Poolia Care continued to report a positive trend during the fourth quarter, with growth of 43% compared with the year-earlier period. Following reorganization of the operations, all customer contacts in Sweden will be handled by the Stockholm office, which is eventually expected to increase efficiency but had an adverse impact on earnings during the quarter.