These two UK shares released full-year trading statements on Tuesday. Here is the key information that investors need to know.
Profits drop on Covid-19 crisis
The Staffline Group (LSE: STAF) share price has performed strongly over the past year. It’s up almost 50% since last June as hopes around the economic recovery gradually improved. However, the recruitment and training specialist has fallen 2% on Tuesday following the release of fresh financials.
Staffline saw revenues slip 13% year-on-year in 2020 as the public health emergency broke, it announced. These clocked in at £927.6m for the full year. As a result, losses before tax widened to £51.6m from £44.4m in 2019.
While group net fee income dropped 12.7% last year, chief executive Albert Ellis commented that “the impact of the transformation and cost reduction actions resulted in a significant improvement in underlying operating profit in the second half compared to the first.” This meant that full-year profits came in ahead of expectations at £4.8m versus £2.9m a year earlier.
The Staffline share price has fallen, however, as it cautioned that some coronavirus-related turbulence remains. The UK support share said that “market conditions remain volatile” in some of the sectors that are just re-opening following Covid-19 lockdowns.
That said, it noted that “the successful vaccination programme is providing a springboard for a strong recovery in the second half of 2021.” It added that performance in the first quarter of 2021 had exceeded expectations.
Sales suffer at this UK share, too
The James Cropper (LSE: CRPR) share price, meanwhile, is unchanged on Tuesday following the release of its own full-year results. It remains 7% higher than it was 12 months ago.
James Cropper makes advanced materials and paper products for a broad range of applications. And it saw revenues sink by almost a quarter year-on-year in the financial year to March 2021, to £78.8m. Demand for its products sank across the group and sales were particularly badly hit at its core paper division. Turnover here slumped 32% from financial 2020 levels, to £51.4m.
As a result, pre-tax profit at the UK paper share slipped to £1.7m last year from £5.5m in the prior 12-month period.
James Cropper chief executive Phil Wild noted that the brunt of the Covid-19 impact was felt during the first half of the year, with the business witnessing a steady improvement during the remainder of financial 2021. He added that “with the continuation of robust business development throughout, continued innovation and investments restarted, I am optimistic the company is exceptionally well placed to emerge stronger and accelerate growth in each business.”
The company now intends to restart capital investments that were put on ice last year. These include the commissioning of a fourth production line at the technical fibre products (or TFP) division. It also plans to significantly upgrade the finishing capabilities of its paper division.
