IT recruitment agency will make founders millionaires

Two UK tycoons will share £100 million when they float their IT recruitment company in the next few weeks, according to a story in The Times today. Andy Baker and Les Clark started Glotel ten years ago after leaving Hestair, the recruitment arm of conglomerate BET. The London-based company has 245 staff in the UK, US and Australia. Baker and Clark, each with 50 per cent of Glotel, will give up to five per cent of the business to staff on flotation. The company is expected to come to market through a placing by broker HSBC Securities. HSBC this week forecast $101 million sales and £4.4 million profit for Glotel for the year ended 31 March. It has been valued at between £100 million and £150 million. But analyst Richard Holway warned that growth in this area was slowing: "IT agencies magnify trends. IT staff agencies always do very well when demand outstrips supply -- they usually do very badly when demand moderates. "Demand is moderating and growth rates will fall post Y2K. More IT staff will still be required, but the premiums paid to contractors will reduce and a higher proportion will return to permanent employment." Holway stressed that he was not predicting the death of the market next year. IT staff with skills in short supply would continue to net good fees as contractors, and agencies operating at this level would continue to grow, he said. But this level would be lower that the 40 per cent or more organic growth rates seen recently. ®