LONDON (ShareCast) - Recruitment and outsourcing group Staffline hiked its interim dividend by over a fifth after underlying profits jumped by around a third in the first half, with the company saying it is on track to hit full-year forecasts.

The AIM-listed company, which specialises in food processing, manufacturing, e-retail, driving and logistics, has declared a dividend in respect of the six months to June 30th of 3.8p, up 22.6% from 3.1p the year before.

"Current trading remains robust and the confidence we place in our future trading performance supports our commitment to a progressive dividend policy," said Chief Executive Andy Hogarth.

Sales grew by 14.2% to £187.2m in the first half, though the company admitted that the rate of increase was "relatively modest compared to earlier years mainly due to lower levels of acquisitive growth".

Underlying profit before tax jumped by 32% to £4.9m, while the gross margin improved by 90 basis points to 10.2%.

Net debt was reduced to just £2.7m from £8.4m at the same point in 2012.

Looking ahead, the company said that the second half has started well with the recent hot weather resulting in an increase in demand for contracts from many clients, reflected in the strong retail figures for July.

Meanwhile, the recently-open driving business has also been helped by the shortage of available HGV drivers in the UK.

Hogarth said: "Staffline continues to trade ahead of the broader recruitment sector with demand for our Onsite model and broader outsourcing services underpinning growth. We are still seeing a strong pipeline of new business enquiries from both new and existing customers and believe increasing regulatory and budgetary pressures will continue to drive strong levels of demand for our services."

The stock was up 4.85% at 540p in early trading on Wednesday.

BC

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