PeopleIN struggles to find 4000 workers, probes company overhaul

PeopleIN, the largest listed recruitment business, is undergoing a strategic review of its operations as thousands of jobs remain unfilled in the health, industrials and IT sectors.

Ross Thompson, the CEO of PeopleIn, has called for a strategic review of the company which could include a sale or an international acquisition. Photo: NewsWire / Sarah Marshall

PeopleIN could find work for another 4000 people immediately, the contracting company’s chief executive, Ross Thompson, says.

The company – the country’s largest listed contracting and recruitment business – has brought in Luminis Partners to run a strategic review, with options including a sale of the entire group under consideration.

Mr Thompson said he was focused on opportunities overseas, and said it was most likely to purchase a business in the UK or Ireland by the end of June.

“We have had strong interest (as part of the strategic review),” he said. “It is always good to look at options, and one option is that we don’t make any change … but we don’t know until we go there and test options, and there are so many opportunities whether in Australia or the UK,” he said.

“The review is all about what is the optimal option for PeopleIN to turbocharge growth.”

While the review is in its early stages – Mr Thompson declined to provide further details – sources with knowledge of the discussions said the most likely interested parties would be in private equity.

PeopleIN has a market capitalisation of $337m, with shares sliding 17.5 per cent in the last 12 months to close down 1c on Friday at $3.34. In August, it reported 15.9 per cent organic revenue growth for the year to the end of June, with earnings of $47.2m.

The business has three areas of operation, including health – where Mr Thompson said he had the need for another 1000 nurses particularly “with recent requirements coming into aged care to have registered nurses”.

Another area of operation is in industrials, where 3000 positions need to be filled. That part of the business supplies staff for diverse sectors including food processing and meat processing. PeopleIN also supplies staff in IT and financial support services.

PeopleIN had not increased its prices, and Mr Thompson said “a long game is a good game”.

“We haven’t increased the percentage we charge, although clearly as salaries goes up our dollar margin goes up,” he said.

“We do have some mitigation against wage inflation, and that does generate organic growth, particularly in technology where our technology business had the best year it has ever had.”

In a note published in December, Petra Capital’s Ken Wagner said the company was on target to achieve earnings at the top of its $62m to $66m target for this financial year “based on … solid organic growth as well as the recent Perigon and FIP acquisitions outperforming expectations”.

“We were impressed with the quality of the management team across the group with cultural alignment from recent acquisitions also coming through,” Mr Wagner wrote to clients.

Mr Thompson said there was plenty of scope for more consolidation in the industry. PeopleIN has made 14 acquisitions totalling some $160m since it listed on the ASX, but has less than a 5 per cent share of the $34bn market.

“In the health space, there is opportunity for there to be a global network particularly in countries where Australia recognises qualifications, which is UK, Ireland, Canada and Singapore,” he said. “The UK and Ireland is the focus, given that is where we had the most success in the past.”