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Norman Broadbent now has multiple strings in its bow

Published: 00:54 04 Oct 2018 AEST

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More to Broadbent now than just search

Mike Brennan, chief executive of Norman Broadbent Plc (LON:NBB) expects the market to begin to recognise the improvement at the business once next results are published.

Recent interims showed clear signs of the progress being made.

WATCH:The NEW Norman Broadbent tips off the market to look again

Revenue in the half year to June rose 42% to £4.7mln, while losses dropped to £265,000 from £679,000.

Net fee income rose 27%, which reflected good growth in Research & Insight and Consulting division revenues.

Executive search still accounted for the majority of sales but Broadbent said customers are increasingly using the other services it provides, something that is not yet being recognised by investors.

“The market still looks at us a traditional executive search firm.

“And while we still do that type of work (for the highest levels of British industry), we now do lots of other things as well."

He points out that three years ago 80% of revenue came out of the executive search business, but now that proportion is 54%.

That change has come about because all of the other activities are doing so well, he adds.

Four legs better than one

Brennan took over two and half year ago and recognised that while Norman Broadbent was a great brand, executive search was becoming increasingly commoditised and competitive.

He looked at how audit firms had diversified into consultancy and other services and applied a similar logic.

Broadbent now has four legs: Insight & research, interim, consultant services and executive search.

Clients have the option to pick and chose what particular service they want, be it just one or in the case of one client all of them.

“We created something that is much more holistic with a complementary portfolio of different services arms.”

“The opportunity to buy one item or two or three bundled together is a very unique proposition in the market.”

Bottom line progression

Broadbent has not made a profit for some time, but Brennan says that after the marked interim improvement he is excited about the next set of results.

“The bottom line progression is good.

“We are bringing in more revenue with fewer people and the quality of that revenue is now much better.”

He also believes the new income streams will attract a higher valuation than pure executive search.

"The balance in the business is much better, which means we can also cope better with shocks in the market.

“All and all, the trajectory is very positive and it’s a really interesting time for investors.

"The next results will enable people to see how we are progressing.”

At 12.25p, AIM-listed Broadbent is valued at £6.6mln.

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