Lost profit costing companies 'millions'

The British recruitment agencies industry is wasting 293m worth of profit every year, according to a new study by business analysts Plimsoll Publishing.

The report finds that:

- 15% of companies are making a loss

- 10% are losing money for the second year running

- 7% of companies made less than 3% return on investment

The findings suggest that a staggering 1100 of the 1486 companies covered would make more profit under new ownership, resulting in 293m extra revenue in the industry as a whole. At the moment, that money is being simply thrown away because of companiesí failure to control their losses and manage their businesses more effectively.

The senior analyst on the project, David Pattison, said: ìThese results prove just why the recruitment agencies industry is currently hot with takeover talk and speculation about future ownership. Itís certainly no surprise that trade buyers and private financiers are taking a close look at the industry ñ some of these recruitment agencies businesses have huge potential that is not being realised at the moment. Weíve heard a lot about private equity firms recently, and this is one industry where they could reap rich rewards.î

The Plimsoll report highlights each firmís hidden potential and demonstrates how simple changes can transform both the performance and overall value of a company. Some of the classic strategies which companies are failing to put in place include:

Cutting out unprofitable sales. In some cases, a 10% drop in sales could actually improve profitability
Looking again at unnecessary stock levels and keeping control of trade debtors to free up cash
Reducing borrowing to improve profitability
Reviewing productivity to the point where sales per staff member are at least 200,000. This is a key business measure that often goes unchecked.

The new Plimsoll analysis of the recruitment agencies industry applies the same tests to each business that any corporate investor would, identifying a ìprofit planî for each one and outlining its strengths and weaknesses in an easy to understand format.

The brand new report is available to order by calling Clair Sherwood on 01642 626422. Readers can obtain a 20% discount when quoting the reference PR07.