Job cut specialists boom

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Widespread redundancies across the financial, retail and construction sectors have continued to aid Penna Consulting, prompting the human resources group to issue its second profits upgrade in five months.

The Aim-listed group said growth in its career transition service, which provides advice to companies that are making job cuts, meant that pre-tax profits would exceed previous expectations by about 20 per cent.

Contracted by clients such as Royal Bank of Scotland and BT, Penna uses role-plays to teach managers tactful ways of laying off staff and helps those who have been made redundant to find new jobs.

Gary Browning, chief executive, said: “Larger blue-chip companies have recognised the value of supporting people through redundancy.

“It’s not entirely a nicety. It’s just generally good for business as it protects their reputation and they can maintain their position as a good employer even in difficult times.”

Mr Browning said revised analyst estimates of £5.2m ($7.4m) for pre-tax profits for the full year to March 31 were more realistic than the previous £4.3m forecast.

Almost half of Penna’s career transition clients are in financial services and include 60 financial institutions, as well as the large banks.

Mr Browning said that all the other divisions of the business including recruitment were also growing, in spite of falling revenues at other companies such as Adecco and Manpower, due to the group’s focus on the more resilient public sector.

Julian Cater, analyst at Collins Stewart, said: “More surprising has been the relative resilience of the other smaller HR consulting divisions,” adding that the group could support twice the current level of revenues with minimal cost.

Revenue from Penna’s career transition division, which accounts for 59 per cent of net fee income, grew 39 per cent in the six months to September 30 2008. However, Mr Browning said that, during the 10 months to January, like-for-like growth had increased to more than 50 per cent. The shares closed up 6½p at 190½p.

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