Sanders buys out co-founder as de Poel’s profits rise

RECRUITMENT process outsourcer De Poel increased turnover by 43% last year to £298.7m as it translated a string of new account wins into improved revenue growth.

The Knutsford company also managed to increase margins through the addition of new service lines, which meant that it turned a £43,625 pre-tax loss in 2009 into a profit of £3.4m last year.

De Poel, which handles dealings with recruitment agencies on behalf of larger corporates, has also set a turnover target of more than £400m for its current financial year.

Chief executive Matthew Sanders told TheBusinessDesk.com that the improvement in last year’s figures were due to contract gains with the likes of British Gas and waste management firm Veolia, as well as increased revenues from contracts won in 2009 with healthcare operators such as Care UK, Four Seasons Healthcare and Craegmor.

The company now has more than 60 corporate clients for whom it handles relationships with over 1,600 agencies employing 35,000 workers.

Sanders added that the increased profitability was due to a number of new service lines, including a service which offers almost instant payments on fees owed to agencies in return for a small percentage of the fees.

For instance, if an agency places workers with Sainsbury’s which is due for payment within 38 days, de Poel will forward payment within 3-4 days of placements ending and will charge anything between 0.5-2% of the value of the contract.

Another ‘bolt-on’ service which helped to improve margins was TempSure – an insurance policy for the company’s band of temporary workers.

de Poel was co-founded by Sanders and Michael Campbell 10 years ago. However, during the past year Sanders has bought out Campbell’s share of the company, although he remains on the board as a non-executive chairman.

Sanders did not disclose the sum paid for the business, but said that payments were being made through a series of deferred consideration amounts over the next few years.

Since its year end, de Poel has also agreed a new banking deal with Santander, whom Sanders described as “a bank who want to grow with us and support us”.

Sanders said that during his brief time with the bank, he had also been introduced to the bank’s CEO. “In terms of customer service for a growth business like ours, what more do you want?”

He added that the market for recruitment process outsourcing remained competitive, but none more so than it had been in previous years.

“This is very much a concept sell still, so if new people are arriving in the market and it helps to explain the concept, then I’m happy, because a sale is a long process.

“But as far as I’m aware, most of the others are still being operated by recruitment consultancies. And If you’re owned by a recruitment consultancy, you’re not really really neutral vendor.”

Accounts show that the bulk of the company’s post-tax profits have been retained, which means the firm’s net assets climbed from £507,514 to £3.1m by the company’s year-end.