Ann: Appendix 4D and 2016 Half Year Financial Statements-AMB.AX, page-4

I'm so so on the profit result.

To me there isn't enough information on what the strategy is for this company and I can't understand it.  I think this business is really attractive in that they earn good revenue (over 10x the market cap) but the company is clearly overstaff and have far too high a cost structure for the existing revenue.  Whats the strategy for increasing profitability?  

If it was up to me I would be slashing and burning costs and trying to retain the revenue with less (margin expansion) however the commentary seems to suggest that their strategy is to grow revenue to grow the bottom line.  As such they are putting consultants on rather than taking them away.  To me that says they are happy with the current operating margins but think they have operating leverage to earn more gross profit without adding to their overheads.  

Why do I say this?

When I look at the financials of AMB vs HIT there is a massive difference in both cost base but also "fee income to employee expenses".  

Employee Level:
At the employee or margin level there appears no consistency between AMB and HIT.
When I look at Employee Benefits Expenses as a% of net fee income (in the HIT accounts this is Admin Expenses):

HIT AMB
2015 28.95%    68.95%
2014 26.38%    68.74%
2013 76.86%    73.53%
2012 72.07%    69.68%
2011 56.98%    69.85%
2010 52.71%    66.69%

I realise that HIT deal mainly with contracting and AMB do permanent placement so there might be differences in that.  
I don’t know if this is right but in the absence of information I tried to work out the % of AMB revenue that was contracting and what was permanent placement.   Assuming a 20% margin on contracting (this is what HIT achieve consistently so I assume its industry pricing) then:

AMB (Estimate of breakdown)
Contract Rev    Perm Rev    Total Revenue
2015   73,499 33,744 107,243
2014   59,489 29,998 89,487
2013   54,588 28,342 82,390
2012   58,012 29,415 87,427
2011   61,080 34,345 95,425
2010   61,643 36,386 98,029

Overheads Level:  
(Total Expenses less Employee and employee related expenses) of AMB are high but I suspect they are fairly normal and HIT is run off the smell of an oily rag so I doubt there is much to trim there.
   
AMB % of Net Fee Income HIT    % of Net Fee Income
2016   $274,230 7.04%
2015 $10,412 22.64% $323,167 10.16%
2014 $10,323 25.86% $230,584 19.06%
2013 $9,399   25.10%   $247,650 15.58%
2012 $9,305   23.81%   $659,879 32.06%
2011 $9,190    20.64% $539,009 24.56%
2010 $10,000 21.43%