SJR: Strong recovery in Q2 - ABG

Recruitment business bounces back
Positive revisions, mainly from increased margins
Company adopts new growth strategy

SJR reported Q2 sales of SEK 105m (89.3m), in line with the preannounced figure as of 12 July. Staffing revenues showed solid y-o-y growth of 10%, but it was the recruitment revenues that stood out, as they almost doubled in comparison to last year. The recruitment business accounted for 15% of total revenues. As the recruitment business generally has a higher contribution margin, it also helped to improve profitability for the group. EBIT was SEK 11.8m (1.7m), corresponding to an EBIT margin of 11.2% (1.9%). Management also stated that the positive trend in Q2 has continued in the beginning of Q3 with respect for the holiday period. SJR reported positive free cash flow in Q2 of SEK 8.9m, ending the period with a cash position of SEK 41.4m.

In conjunction with the report, SJR also communicated that it has adopted a new growth target for the coming five-year period. The company now aims to double its sales, corresponding to a sales CAGR of 15%. The majority of sales growth would stem from organic initiatives such as broadening the offering outside of the current expertise within economics and finance. However, the plan also includes complementary acquisitions and we expect that the organic growth target could be between 8% and 10% per year with the rest coming from acquisitions. In order to clarify this strategy, a name change from SJR in Scandinavia to Ogunsen has been proposed by the board of directors.

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