Report of the Board of Management

Operational review

Engineering

Vedior provides qualified technical personnel to support both private and public sector infra-­structure initiatives. We provide contractors with experience in many different engineering skills such as consulting, designing, drafting, manu-facturing, constructing and field commissioning.

Engineering recruitment sales grew organically by 22% in 2004, one of the Group’s best performing sectors.

In the UK, Vedior operates two engineering brands, Hill McGlynn and Beresford Blake Thomas both of which achieved exceptional growth in sales and operating income.

In France, Belgium, Spain and Switzerland, Expectra’s growing reputation in engineering recruitment in continental Europe is reflected in increased sales and profitability.

ATS Reliance, based in Canada, provides specialist personnel primarily to the international oil and gas industries. The company increased sales during the year.

In Argentina, SESA Select’s Engineering division has expanded considerably. This is a good example of a primarily traditional recruitment company using its existing platform to develop a new and profitable niche in a higher margin sector.

Education

Vedior provides a full range of education personnel to public and private schools as well as higher educational establishments. Experienced personnel can be provided to teach nursery, infant, junior, special needs, further education and senior classes.

Education recruitment sales declined by 6% on an organic basis.

In the UK, Select Education is the clear market leader and continues to outperform its peer group. Demand for teachers declined in the UK reflecting falling vacancy levels, however, we continue to perform well in this challenging market. The company is very well-positioned to benefit from any improvement in market conditions.

The Group has also established education recruitment specialists in the US, Australia, the Netherlands, Spain, India and Turkey.  These new operations are much smaller than our UK network at present, but have potential for longer-term development. Progress made in Australia during 2004 is particularly encouraging and provides a very solid foundation for further growth in this region.

Other sectors

Vedior provides recruitment services in a number of other niche sectors including audio-visual, catering/hospitality, executive, human resources, insurance, interim management, legal, sales & marketing, teleservices and travel/leisure. The Group also provides a number of complementary HR-related services such as vendor management, outplacement, training and business process outsourcing.

These sectors of operation represented 5% of overall Group sales in 2004, however, while relatively small they are important in Vedior’s long-term strategy of improving the diversity of its revenue stream and increasing the proportion of sales derived from professional/executive recruitment. In 2004, these sectors grew organically by 12%.

The largest of these sectors is tele­-services which we provide in 16 coun-tries, primarily under the Teleresources brand. The most important markets are Portugal, the UK, Australia and the Netherlands. Our teleservices businesses grew through the global economic downturn and, in 2004, continued to make good progress, most notably our operations in the UK and Portugal.

Legal recruitment is provided in 9 countries, the largest of which are the UK, Australia and the Netherlands. Legal recruitment tends to have a high proportion of permanent placement and is one of the more economically sensitive sectors within the Group. Legal recruitment was a positive contributor to Vedior’s growth during 2004, benefiting from the generally more positive global economic environment.

Other notable areas of growth during 2004 were Albemarle and Funktie Mediair, providers of interim management in the UK and Netherlands respectively, Tanner Menzies, an Australian executive recruitment provider, and Fairplace Japan, an outplacement specialist provider of career management services.