Medacs sees revenue fall

Medacs Healthcare, the specialist recruitment agency, whose parent is global staffing solutions firm Impellam Group, in its half yearly results to 28 June 2013 recorded a revenue fall of 8.7% to £87.7m (2012: £96.1m). Gross profit declined by 9.0% to £12.2m (£13.4m). Operating profit was £2.1m (2012: £4.6m). The directors said: The business is experiencing challenging market conditions with margins under pressure and growth in demand in specific clinical areas being subject to short supply. Buying patterns in the NHS are also changing with shorter lead times and multiple buying frameworks for medical professionals alongside increased penetration of new entrants, particularly those offering solutions aimed at enabling the NHS to reduce VAT related costs (some NHS trusts are using new employment models whereby they can employ what at one time would have been temporary staff on permanent contracts, thereby not incurring VAT). (See news page – Recruitment firms face VAT issue) The directors continued: We are also bearing increased costs associated with both enhanced compliance requirements and in the sourcing of the required medical professionals for the demand available. Accordingly, operating profit of the segment fell to £2.1 m.