Ann: Appendix 4C - quarterly, page-7

A pretty interesting read. Seems like a big focus on overhead reduction which has played into the turnaround (see excerpts below).
Note the last part too that staff cost reductions will only be properly reflected in the current financial year.
Interesting too that the specialist recruitment division is outperforming.

The numbers look good. Just an opinion but this may be a big turnaround story in the making. Even without the on-going cost reductions reflected fully in the quarterly numbers, they have turned a corner on the face of it. I know nothing about the recruitment industry but the numbers are what they are...

Excerpts with highlighted parts:

Expenditure
Contingent labour costs of $28,971k for the quarter ended 30 June 2020 were down 8% on the
comparative quarter in 2019 for continuing operations, in line with the decline in revenue from continuing
operations. The discontinued China operations focussed on permanent recruitment and did not impact
contingent labour costs in the comparative quarter.
The Company continued its focus on improving consultant performance and productivity as well as
reducing operating costs during the June quarter resulting in the departure of underperforming
consultants and the elimination of several non-core roles. Redundancies equivalent to 14% of the
Company’s staff were implemented during the quarter with total headcount reductions including attrition
at 19%.
Additionally, the Company’s Sydney and Western Sydney offices relocated to more cost-effective
premises during the quarter.
The financial benefit from these headcount reductions and office relocations started to be realised in the
second half of the June quarter. The full benefit of these structural cost reductions is expected to be
realised in the 2021 financial year.


OPERATIONAL UPDATE
Specialist Recruitment
In the quarter ended 30 June 2020, the Specialist Recruitment business contributed a profit before tax
and corporate overheads of $1,329k versus a $499k profit in the comparative quarter of 2019. This
positive movement reflected a 46% reduction in salary and related costs offsetting a 16% decline in
gross profit, principally due to a decrease in high margin permanent placement revenue as clients placed
recruitment on hold during the quarter while they assessed the full impact of COVID-19.
The profit before tax and corporate overheads for the June quarter increased 466% on the March quarter
due to a 14% increase in gross profit, principally in contingent labour and a 22% decrease in salary and
overhead costs.
The continuing focus on improving consultant performance and productivity and a focus on the key
functional verticals of IT and Digital and Business Support resulted in headcount reductions of 21%
during the quarter through a combination of attrition and redundancies. The full benefit from these
reductions will be realised during the 2021 financial year.