PRETAX PROFITS at recruitment firm CPL Resources almost halved in the six months to the end of December due to the “extremely challenging business and employment background”.

During the period, pretax profits fell to €6.02 million, down from €11.73 million during the same period in 2007.

Group chairman John Hennessy said the company was “experiencing a significant reduction in activity as businesses retrench and potential job candidates defer possible job changes, and it has become more difficult to forecast future performance accurately”.

Net fee income fell by 26 per cent in the six months to December 31st, while fees from the company’s permanent placement business declined 40 per cent over the period.

CPL said its temporary placement business had been the most resilient and fees in this sector were just 10 per cent lower.

Revenues fell from €132 million to €118.9 million, and the group finished 2008 with cash reserves of €36.4 million. The company has also taken an impairment charge of €4.5 million on the carrying value of goodwill from recent acquisitions.

The company has recommended an interim dividend of 1.5 cent per share. In a briefing Davy stockbrokers noted that operating profit had declined 94 per cent to €690,000 with earnings per share of 2 cent.

“The difference between actual and forecast numbers is largely due to a €4.5 million impairment charge on goodwill in the period,” said Davy analyst Ivan Skelly.

Although the fall in revenues was sharp, it was in line with expectations. The stock managed to gain 9 cent in trading on the Iseq index yesterday, closing up 8.5 per cent at €1.15.

CPL shares are down 70 per cent over the last 12 months, marginally worse than the overall Iseq which is 65 per cent lower.