Agency adapts to times of change

Oct 1 2008 by Barry Turnbull, Liverpool Daily Post

LEE & Nightingale is a business that has never stood still in more than 150 years of trading.

The present environment is as challenging as it has ever been for the recruitment advertising agency, with sales showing a sharp drop.

TJ Hughes is one of its chief clients, with a special website developed to attract and screen candidates.

In the early days, the emphasis was much more on news distribution, the enterprise being launched by two local journalists. Indeed, Mr Lee and Mr Nightingale were offered the chance to manage the fledgling Press Association in 1870, but declined.

Recruitment advertising has undergone a revolution in the last few years, thanks to the internet, but the company wisely set up a digital arm in 2000.

Jonathan Clarke, who bought the business from his father in 2006, said: “The market has changed and much of it has gone online. We set up a digital service in 2000 which was an astute move, otherwise it would be costing us a lot of money now to acquire services.

“In print, we operate on margins of 10%-15%, but with online it is 100%. So overall sales have dropped but profit margins are holding up.

“Also, we have a spread of clients including public sector, health and charities, so not everything is with private companies.

“It is difficult to see where things are headed, but our core business is rock solid.”

In 2006, turnover rose to £15.8m after some years of steady growth, but last year it nosedived to £6.6m, due to the changing circumstances.

Despite the top-line fall, pre-tax profits increased from £862,695 to £1.3m in the same period, although the latter figure included £780,000 gained from a disposal.

The staff complement of 32 cost £1.1m in 2007, with the highest-paid director receiving £292,000 and a dividend shareout of £209,950.

Mr Clarke added: “Our business model is based on constant evolution. That doesn’t just mean adapting to changes in technology, business practices and the labour market. It also means adjusting as our clients themselves evolve.’’