When Livingbridge first engaged with Staffline, we were backing a management buyout and the business quickly became more successful. But changing market pressures soon started to threaten Staffline’s future. Fortunately we’d appointed a finance director whose visionary ideas – with our support – not only rescued the business, but completely transformed it.
Turning one man’s vision into reality
Staffline began in 1986 as a regional high street recruitment agency, specialising in blue-collar employment. But the sector was commoditised, and soon after Livingbridge backed a management buyout in 2000, supply and demand shifted, putting Staffline and its competitors in a precarious position.
We’d already brought in Andy Hogarth as finance director, and we’d been working closely with him and his management team to stabilise the business. So when Andy outlined his vision for the business, we were completely behind him.
Staffline’s business model was based entirely on high street branches, but Andy planned to move away from this and start providing a full outsourcing service on site at his clients’ own premises. For high-volume recruiters this was a more convenient, more bespoke and more efficient staffing service than they’d ever had before, and take-up was fast. In just 18 months, 40% of Staffline’s revenues were coming from on-site operations.
In just four years, the Staffline had transformed from a regional temporary staff supplier into a national business. In 2004, it was floated on AIM - the London Stock Exchange’s international market for smaller, growing companies. When it was floated, Staffline had 21 branches and 33 on-site operations and it was providing 4,000 staff to nearly 400 clients including Sainsbury’s, Hozelock and Allied Bakeries. Andy Hogarth had successfully turned his vision into reality with our help, and he went on the become managing director and then CEO of this burgeoning business.
After the IPO Andy and the internal team set up a plan to treble the size of the business, taking it to £120m sales and £3m profit in three years. By 2007 they had hit their sales target and exceeded their profit target. This put Staffline in a much better position when the recession hit in 2008. According to Andy, “We spent a lot of time looking at strategy and having said we never would, we started buying competitors on an earn-out model. That allowed us to build our client base much quicker than we were already.” In 2010 they launched their next plan, to treble the business size again, a target met by 2012, and in 2013 they launched the ‘burst a billion’ target to hit £1bn in revenue in 2017.
As well as growing organically and through acquisition, the business also moved into a new space, employability, in 2011. As well as apprenticeships and skills training the business also does training in prisons via in-cell television channels. Andy describes employability as, “Really exciting work to do, it’s enormously helpful and rewarding. You take someone who has never worked and show them what life could be like and the day that they get a job, it is the most satisfying thing.” By 2016 that part of the business, People Plus, had the biggest market share in employability in the UK.
“Andy Hogarth backed a plan to build a differentiated business in a commoditised sector. We backed him, though the early period was fraught with difficulties. Staffline remains one of the most rewarding moments of my career and we remain one of the largest shareholders today, continuing to back Andy’s strategy.”
Mark Turner, Livingbridge
Staffline formed in Nottingham
Livingbridge invests in Staffline
First on-site location opened, turnover £38m
On-site business extends to 17 locations
Staffline admitted to AIM of the London Stock Exchange
On-site business extends to 33 locations
Business exceeds its ‘trebling’ target with turnover of c.£120m and profits of c.£4.3m
Makes 3 acquisitions
Employability business launched with acquisition of EOS
Business hits its ‘treble the treble’ target with turnover of c.£360m
Launch of ‘burst the billion’ target to reach £1bn revenue in 2017
Acquisition of Avanta, giving employability side of the business 10% market share
Wayout TV & Way2Learn, educational television channels developed as a means of communication, education and the promotion of offender services, are launched
Acquisition of A4E, giving employability side of the business just under 25% market share. Employability brands come together under the name PeoplePlus
On-site business extends to c. 350 locations