Red ink flows, but talent2 is looking up

The recruitment division returned to profitability in the june quarter as, demand for
placement services stabilised and cost cutting took effect, listed recruiter and software services
Firm talent2 reports.
However, the economic downturn has taken its toll. The company said it would swing to
a full-year loss of $2.5 million before interest, tax, depreciation and amortisation, from a profit of
$10.8 million a year ago, and there were doubts it would pay a final dividend.
Talent2 chief executive john rawlinson said he was disappointed the overall result was worse
than the previous year's but it was not bad in the context of the global financial crisis crippling
the jobs market.
"we returned to profitability in the recruitment part of the business during the fourth
quarter and the managed services part of the business performed strongly, so there are some
things to be very positive about," he said "also we are very confident about what happens
moving forward. from what we can see, we would except a continued improvement in conditions
in every geography we operate in. It will not necessarily be back to the heady days when
recruitment was booming, but certainly a reasonable proft contribution."
His sentiment reflects that of people bank chief operating officer peter acheson, who said
earlier this month that his company had also recorded a marked upturn in hiring intentions across
its 50 largest clients in july. Mr acheson said the positive hiring intentions were largely limited
to contract positions and the company forecast no change to the flat market for permanent
recruitment this year.
Mr rawlinson said talent2 had begun to see some upturn in permanent recruitment in its
asia business, and Singapore in particular was firming up. However, he said growth in Australia
was largely restricted to contract staff.
Recruitment revenue would fall 16 per cent year on year to $114.4 million and overall
revenue was expected to total $228.7 million.
Revenue from Talent2s managed services business, which provides outsourced human
resources, was up 21 per cent to $114.2 million.
our strategy once recruitment ground to a halt after last October was to make the
necessary cost reductions and get the business better focused on areas of the economy that were
still active, mr rawlinson said.
 we have since been able to align our business to win more of the available permanent
recruitment market. If the current trends continue we would expect that the permanent market
would pick up in the coming month

Although the company traditionally declared an annual dividend, it looked likely that
would not possible this year, he said

Because of impairment charges related to it operation in hongkong and united kingdom,

talent2 predict a netloss before tax of $5,5 million, which would make a return to shareholder
unviable.