CPL pretax profits up 54% to €8.1m

SHARES IN CPL Resources closed 10 per cent stronger last night after the recruitment company said pretax profits jumped by 54 per cent last year from €5.3 million to €8.1 million.

Revenues increased by a quarter to €235.3 million in the year ended June 30th, 2011, up from just under €190 million the previous year. Operating profit grew by 81 per cent to €7.2 million from €3.9 million. The numbers were better than expected.

Investors responded favourably to CPL’s announcement of its intention to return up to €20 million of surplus capital in the form of a tender offer to shareholders at €3 a share, a process which will be subject to shareholder approval.

The price represents a premium of 20 per cent to Tuesday’s closing price of €2.50 and a premium of 12.8 per cent to the volume weighted average price over the three-month period to September 13th, CPL said.

“The board has determined that, given the strength of the balance sheet, and taking account of continued positive cash flow generation, a return of surplus capital is in the best interests of shareholders as a whole,” chairman John Hennessy said.

Earnings per share rose 57 per cent to 19.2 cent last year, while the shareholders’ dividend increased to 5 cents from 4 cents. CPL had €46.3 million in net cash at year end, compared to €43.4 million in the 12 months to June 2010, up 7 per cent.

The company said that a “two-speed economy” had developed in the jobs market, with sectors such as technology witnessing skills shortages while other sectors, such as construction, continue to offer very few job opportunities.

Chief executive Anne Heraty noted that while unemployment was still rising, the level of employment in Ireland remained relatively high from a historical perspective. Shares in CPL closed at €2.75, up 25 cents on the day.