Good morning and welcome to the Staffline Group PLC full year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated in the bottom right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself; however, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Albert Ellis. Good morning to you.
Good morning, and thank you for joining us this morning. I've got my CFO, Daniel Quint here, and we're here really to talk about the detail of the full year 2023 results. As you would have thought, as you would know, we've actually already addressed the headline results in our pre-close statement in January, and we did a webinar at that time. But this morning, we want to take you through some of the detail, and we also want to spend some time on the future, which is quite exciting. So just, without further ado, we'll jump straight into the presentation, and you've no doubt those of you that followed us have seen this before.
It really does form the basis for our presentation in terms of what it's telling you, that we're a business that's broad, that has tremendous scale and reach, and we have, you know, we have a wide portfolio of services. And, you know, you can just pick up the stats for yourself at the bottom there: a business that is substantial and a market leader in its own right. Simply put, our strategy is five key points, and, as you can see, we're focusing most importantly on our market leadership. We'll talk about all of these points in the presentation, and you will remember that as we pick them up. But essentially, we're capitalizing on the group's scale and its market position in blue collar. We're also broadening the portfolio.
Lots of evidence that the market is looking for more than one service in a multiple portfolio of services. The Republic of Ireland has been a tremendous investment, and for the first time, the business there has won a significant contract, a national contract, which will change the prospects of that business. We've completed the turnaround of PeoplePlus. It's been a journey, and some of the impacts of that turnaround is reflected in the results, and you'll see that. The most important message of PeoplePlus is that it had a reasonable year given the market it was in, but actually, we've got over GBP 300 million worth of completed and submitted tenders that were outs that are that are outstanding, and we're waiting to see the results. And finally, Daniel's gonna take you through some really exciting detail on the cash and the balance sheet and the P&L.
I'm really, really delighted about the cash generation. The business is really performing, as a cash generator, and at times like this, that's an absolute necessity, for any business during times that we're facing at the moment. Daniel.
So, good morning, everyone. Very good to see you all and be able to speak to you. Gonna introduce the financials, just giving you some of the highlights from this year in what has been a resilient set of results, and good strategic progress as we will outline through this presentation. Revenue increase, significant organic opportunities, further rationalization of the cost base, as I will walk through, incremental further transformation of PeoplePlus, underlying operating profit that is, as I said, resilient and up 1.5%, good cash generation, banking facilities that we refinanced in December of 2023 at lower cost, illustrating the progress that the business had made, and finally, all of that allowing us to deliver a share buyback of 10% of issued share capital last year. So just the key metrics now through the financial review. Firstly, revenue.
You will see that revenue increased slightly, illustrating the market share gains that Albert will run through in the operating review he will go through later on. Secondly, very importantly for recruitment business, because in the revenue line, the salaries of the workers go through that top line. Gross profit is our fees. So although down from 82 to 80.8, that's down 1.5%, I think that compares relatively favorably with the large recruiters out there, in our sector who are down circa 15% among them. So we are clearly not and it's not great that it's gone down a little bit, gross profit, but in a market that we're in, to just go down 1.5% is a good position to be in.
And then underlying operating profit at GBP 10.3, which was slightly ahead of market expectations, down from the 12 of 2022, which is a real boom year for recruitment back in 2022. We're pleased with that position, and that gives us a good platform for moving forward. But very importantly for a business like ours, as Albert touched on, cash generation is key. And I just wanna take you through what the situation and the position is for our business regarding our cash generation and balance sheet. So we delivered a strong cash-generative year, and that leaves our balance sheet in a strong position, which allowed us in December to refinance at reduced cost. And a few of the contributing factors to that position are as follows.
One of them is, a number of you will remember, we have an interest rate cap in place, which protects us against the high level of interest rates. We actually received GBP 1.9 million worth of income in 2023 that protected our net finance charges of GBP 3.7 million. So, a good strategic decision of the group a couple of years ago to purchase that interest rate cap. Secondly, the strong cash generation, allowed us to, deliver a share buyback of GBP 5 million. We also bought GBP 5 million of other owned and purchased shares, and that left us even with then, net, net residual cash of GBP 3.8 million at the end of the year.
Importantly, as we exited this 2023 and entered 2024, we have significant financing headroom of over GBP 62 million, and our covenants, leverage, 0.5 times, so way less than 1 times, 0.5 times EBITDA, interest rate cover of 3.5 times, allowing us to take advantage of that cheaper refinancing that we agreed to in December 2023. And finally, as you'll see on the next slide, all that, especially towards the end of last year, left us with the opportunity to invest in organic growth. So just to clarify graphically how we delivered that cash generation, you'll see going from left to right here, that strong trading cash flow, EBITDA of GBP 13.4 million. We were able, therefore, with some of that, to do some of the restructuring.
We've spoken about that in our in our results this morning, whether that be the restructuring decisions in the recruitment division, Recruitment GB division, or the exiting from the in-person skills division, which is the right strategic decision to make, makes that division, PeoplePlus, a stronger division. We were able to absorb those costs within the cash position at the end of 2023. Tight control of CapEx, as I've said, good control of interest paid with the benefit of that interest rate cap protection. And finally, again, tight working capital management, a real a real boom there, and credit to our credit control teams who were able to deliver that across our businesses. And this enabled us, on the right-hand side of this graphic, to then invest in working capital growth of GBP 2 million, but also carry out the share buyback program.
So in summary, that left us with GBP 3.8 million of net cash at the end of last year, and that further allows us in 2024 to create a position where we're able to invest. And Albert is now gonna take us through some of the divisional reviews and illustrate some of the areas where we've already started to invest at the end of last year, but where the new opportunities have already started to roll in at the beginning of 2024. Albert.
Thank you, Daniel. If moving on to Recruitment GB, this is our, you know, this is the largest business in terms of its scale. Really, it's an organic growth story in 2023. Ours have been down in terms of like-for-like. The market has been much more subdued than the years prior. However, we've maintained revenues, which is quite a significant achievement in a market that's, well, down. The expansion has mainly been the existing blue collar customers, and I'll come on to that. But we've also seen temp hours during the peak up 5%. So we had a very, very good second half in this business, and that was driven by the new the new accounts and the organic expansion that we had achieved in our existing customers in blue collar recruitment.
Now, perm recruitment is down, and that is absolutely to be expected in this current market, but just 10% being in the business for 30 years in terms of recruitment, I would have expected in a market like we've just been in for recruitment to be much for permanent fees to be far higher in terms of their decline. So just 10% down does demonstrate that not only temp, but perm is showing some resilience in our markets. The engineering recruitment business contributes to that result, and they had a strong year driven by really, vacancies, strong vacancies, and a tight skills shortage in that area. The defense sector has been spending money on engineering and tech, as a result of some of the geopolitical trends in the world.
So Omega has had a strong year, a solid year, and we're expecting Omega to continue in that vein. The start of the year well. Efficiency program, we kicked off a project in the middle of the year last year to make ourselves more efficient as we were taking on more volume, and we incurred a charge, which you'll see in the non-underlying, but actually, it reduced the cost base by, you know, at least GBP 2 million on an annualized basis. So very pleased about that. That means going into the current year, we should protect our conversion rates. Finally, compliance and assurance is really the significant single factor in the current market.
Customers want reassurance on financing, on headroom, on ability to deliver, but they also want to make sure that you're delivering in a compliant way, very important for their reputation and for their operations. So delighted with GB's performance. And look, to put on an increase in profits in a year when the sector has been down in quite dramatic fashion, I think, is a really respectable achievement. Now, the three drivers of the secular growth we've been talking about here is Tesco, Morrisons, GXO, and AMFRESH. These are the three sort of three trends we're seeing. First of all, existing businesses like Tesco, where we have a strong multi-year relationship, they are continuing to extend and renew our supply arrangements with them.
We actually recently agreed to take over supply of four further warehouses and distribution operations for Tesco on the basis of our delivery. We've also transferred over 1,000 workers, and this is actually just in the last three months. This new award, as Tesco said, is testament to the growing strength of the strategic partnership. And this is about new organic sites and existing, large customers.
Then when you look at sole supply, what we've been saying to our customers is, "If we can work for you on a strategic basis, and we can also provide an attractive terms and conditions if we get sole supply, 'cause we can benefit from the scale." And Morrisons is a great example of that, you know, to supply labor to their manufacturing and warehouse running through all of this year and next year, transferring six additional operational sites to Staffline. So and Morrisons, we're now over 95% in terms of supply, and the same is true for AMFRESH, one of the country's leading providers of fresh fruit and suppliers to the supermarket sector. And finally, we've seen a lot of sector consolidation. A lot of our customers are actually outsourcing their third-party logistics. Sainsbury's is one of them. There are others.
And so GXO is driving and leading the sector consolidation. We're their largest supplier. So in 2023, we secured 14 new warehouses on the back of an acquisition GXO made previously. We've got more potential in the pipeline. I'm sure that we're gonna see more sector consolidation, and we're the best placed recruiter to address the labor shortages and also supply into the customer's logistics sector. So a really strong customer story underpinning the GB results. Moving on to Ireland, really this is a slightly different story in the sense that both temp and perm fees were down. Northern Ireland was really blighted in NI as a geography by this impasse, and the market has also been held back by the fact that we've had no government in Northern Ireland for some years now.
We have continued to make investments in the Republic of Ireland, but importantly, for the whole of the Irish business, we have determined that a year investment, whilst we are pitching for quite significant contracts, securing our future growth through maintaining fee earners and investment in tech, is the right strategy for 2023. That means we took a bit of a hit, as you can see, on operating profit. We didn't reduce our cost base. We maintained the fee-earning capacity because we knew and we expected to make significant inroads in contract wins. So the good news here is these multiple contract wins are now secured. We've announced them, and I'll come on to them. But even more importantly, the environment has changed.
Northern Ireland government is up and running, as you know, and subsequently, after the first eight weeks of trading, we are literally sitting on the largest perm fee pipeline that we've seen since before the pandemic. So the new contract wins, which will drive the second half mainly of this year, are in the south, we're in the Republic of Ireland, where we've been chosen by An Garda Síochána, as its trusted recruitment partner. Now, we are delivering administrative white-collar jobs. We, it's not recruiting security officers.
This is about back office administration, tech, HR, and accounting, all of the administration, some of the leadership positions, where we are sole supplier, and we will be. We have got a total solution to make sure that we provide good value and talent on time to the Garda in the Republic of Ireland. A tremendous win for us and demonstrates that our Republic of Ireland business is maturing as a business and becoming a force to be reckoned with. In addition to that, in the south, we have been put on the supply arrangement for ESB, the Electricity Supply Board for the Republic of Ireland. That's a new contract. We've got new requirements already that we're filling, and that will also contribute mainly in the second half, but will make a contribution this year.
And then last but not least, in the north, you might have heard of the Independent Commission for Reconciliation and Information Recovery. This is a commission set up by the government, will run for a number of years, and is likely to grow its headcount to carry out its mandate and its mission. We've been appointed the tier-one supplier, and we'll bring you more news of the pipeline as it unfolds. As I said. So, in essence, new contract wins, material contract wins, both in the north and the south, this will mean that our bounce back in terms of profits this year should be welcome and should be very good. Thank you. On to PeoplePlus. Look, this is last but not least.
We've had a very tough year in terms of the market. Low unemployment continues, and that's because PeoplePlus is an anticyclical business, it means that, you know, the volumes are lower because, if there's high unemployment and there's a high joblessness, as was expected during the pandemic, then, of course, PeoplePlus, the volumes rise and the revenues rise. So we're in a tough market for PeoplePlus because it is anticyclical. Of course, it's blighted a little bit by politics. There's a general election looming, and there's no real big decisions. So we're seeing a cyclical commissioning trough for large contracts and new initiatives coming out of central government. So, you know, this is just the market in which PeoplePlus finds itself. But it didn't do too badly, in my view, in that market.
It did very well on revenue keeping, a like-for-like revenue, broadly flat with a little bit of an increase, and then, underlying operating profit slightly down, but with a very respectable conversion to operating profit from gross profit ratio, 18% to 19%, very respectable. So solid results from prison education and employability. We exited the in-person skills and training. We've talked about that before, but really, inflation has really been a major factor there. These contracts are not index-linked, generally, and wage and cost inflation have been material in the training and tutor sector, particularly with skill shortage in tutors. So we are focusing on digital online because candidates also want a digital solution. And then I'm just going to mention that Restart, of which we've had two good years, will be extended now. We're in discussions about that extension.
It's a two-year extension after the initial four years. So that's a really welcome extension to an important contract for us, and we'll bring you news as and when we conclude discussions. Now, on PeoplePlus, the next slide, please, Daniel. The most important, if you know, most important fact at the moment is the way that we're seeing the pipeline, which we've submitted already, tenders to the value of GBP 310 million, mainly to the Ministry of Justice, where direct tenders to the Justice Department to carry out prison education just shy of GBP 200 million, with partners, other companies that are running prisons on behalf of the Justice Department. We've got GBP 66 million worth of tenders there, and then other programs in the Ministry of Justice, GBP 30 million further GBP 32 million. So a really large pipeline there.
And also, this is our largest area, and our area of expertise is prison education. We've got significant market share, and we're hopeful and confident that we can have a good result in these tenders. In the Department for Work and Pensions, we've got a long history of working with them. They've got less work. It's mainly focused around Restart, but we've also got bids out there in Glasgow, but also a big mental health support bid for GBP 20 million. You know, and you've read and you've heard that there's a crisis in terms of mental health. It's affecting the workforce, and the numbers have shot up, people who are on disability and ill because they are economically inactive because of mental health. So the Department for Work and Pensions is trying to address that.
So there we've got results to be announced in 2024. No news today, but we'll announce as soon as we get more information on that. So that wraps up the operational review, and this section of the presentation. You know, it's all forward-looking. All the green shoots that we've been seeing over the last few months, we're starting to see them in real terms now in the first quarter. And so I'll probably return at the end with the outlook statement, Daniel, and talk more about what we see at the moment.
Good. Thank you very much, Albert. We just wanted to highlight what is, what for us is a significant competitive advantage in ESG. So ESG is, of course, very important for all companies, and particularly, in the S for us, not to the ignoring of the E and the G, but we just wanted to highlight some of the areas that we are focused on. And as the slides are here, our focus is to make a positive difference to people's lives and to deliver social value to the communities in which we operate. And we see this and not just that we see this, we know, because this actually contributes to our commercial success, this is a competitive advantage for us.
This slide here illustrates that one of the core elements of our strategy is being the S in ESG, and you can see that whether that's through employability schemes, education services in prisons. You can see the deep social value that the Staffline Group, through both the recruitment business, but very, very importantly, the PeoplePlus business, delivers to society and how customers value the contribution that we make, not only in our recruitment but also in our PeoplePlus business, combined together to deliver real value for customers across their supply chain. And here are some examples of actual ways that we deliver competitive advantage for ourselves but deliver value for our customers. You can see that we trained 8,500 people for vacancies available through social recruitment. We had 11,700 learners in 72 prisons, started over 27,000 courses.
Of course, not to forget at all, our environmental commitment. You see there we reduced CO2 emissions in the year compared to 2022 by 20%. So the ESG element of our operations and our values is very, very important to the group, and we look forward to continuing those results in the weeks, months, and years ahead. Albert, over to you.
Thank you, Daniel. Just a few comments from me on that section. I mean, ESG is not just an academic exercise for us, and neither are we doing it just to comply. ESG for us is a competitive advantage, so it must generate returns to shareholders, and that's one of the sort of guiding principles that Daniel uses as he chairs that committee. One of the most exciting things is the cross-referrals that we're seeing, and one of them being G4S, where G4S and PeoplePlus have a strong daily working relationship in the market, and as a result, the recruitment business has secured some work from G4S as a result of that strong working relationship. And I think as shared values with G4S and PeoplePlus and Recruitment GB, that's underpinning that relationship.
But just to show you, we've got 16 dedicated recruiters now, for G4S, working on a managed service solution for them, and that is all as a result of PeoplePlus's proposition in terms of social recruitment. Working, looking now at the current trading and our very, very simple. You've probably seen hints of it in the presentation, but we most importantly, we're encouraged by this 5% uplift, which is not yet a market a market return to growth. This is because we're winning market share, and hours are up, productivity's up in our temp labor force. Very, very encouraging that it's up on the prior year by a number as material as 5%. So these are the first 10 weeks of the year, including the permanent fees in Ireland.
I wouldn't wasn't expecting perm fees to be so strong, particularly in Ireland in the first three months. We're looking at January and February 27% ahead of budget, similar percentage ahead of last year. And I think this is all about what I was describing as the environment in Northern Ireland, where the government's come back. We've got lots and lots of confidence now that's happening in Northern Ireland, but also in Southern Ireland, in the Republic of Ireland, where we're seeing economic growth this year being forecasted by the IMF and other bodies. So, you know, Ireland looking like a good year in terms of perm. We've also got record levels as a result of the contract wins in PeoplePlus, outstanding, a bid pipeline of, you know, circa GBP 300 million.
So we're very encouraged by these, more than green shoots, really a brightening of the outlook. As I said, this will improve our conversion ratio because we took action early. I've seen lots and lots of companies are announcing restructuring this year. You know, we're anticipating that the sector's going to restructure, you know, the large major players, the sort of bellwethers are all talking in the first quarter about declining earnings and restructuring and reducing their headcount. We did that early last year. I knew this was coming. I knew we were going to hit a trough, and we wanted to get our cost base at a position where we would benefit from the upturn early. So we expect that conversion ratio to be protected as the annualized benefit of all those actions last year flow into the current year.
So we're just gonna conclude this short presentation by saying, look, the year has started well, a little bit better than we were expecting. At this stage, it's a bit too early to make definitive changes to what we feel about the future, but we're very encouraged about how it started. You know, in summary, this is all in line with our management expectations, and we're delighted with the cash flow that we're seeing coming through in the first three months too, which is underpinning that confidence. So with that, thank you for your attendance and for listening so well. We're open to questions. We're gonna have sort of 20 minutes, 15, 20 minutes of questions. Daniel will probably lead that. I'll chip in if there's any questions that you'd like from me.
Maybe I should kick off with the first one, which is that someone has asked about our scale and how the 35,000 temps and the 15,000 learners change. Well, they haven't. Regarding this, these are averages. As you can see, over two years, our revenue has really been static. So you would expect them to be relatively static 'cause these are averages. If you want to look for more specifics, obviously, the ESG, and you look on our website with the with the presentation, you'll be able to go back to the ESG slide, and you'll see some more specifics there on learners and prison and our prisons and employability breakdown. But we work on an average, and we've got about 35,000 temps out there, and they come and they go.
There's peaks and troughs, but on average, in the last 24 months, that has not materially changed.
Yeah. The only thing I would point out is that, while the temp numbers were low in the first half of the year, as we've shown in the presentation, we've been 5.2% up in the last quarter. The run rate coming into this year, and we've seen hours up this year as well, those are translated through the temp worker numbers. So they're generally up as of run rate closing last year and into this year. The 15,000 learners will be down a touch 'cause we'll, of course, we've exited the in-person skills group, skills business, but that will be picked up through digital. And our prison footprint, where we, of course, have learners as well, that is starting to grow as well. So as Albert Ellis says, the averages, but there's the yin and the yang throughout the year.
Second question that we've received is, with the strong cash generation in 2023, how do you plan to balance your capital allocation between growth investments, shareholder returns, and maintaining a healthy balance sheet? I'll take that first off and see if Albert has anything else to add. I think what we will do, we're encouraged by the start to this year in terms of cash generation and the ongoing great performance by our finance teams in controlling and getting the cash in. When we pass through our AGM in May, we'll receive new authority in terms of purchasing shares, and we will then assess where we are.
But as our chairman's statement said today, we, you know, we at the levels that we're at at the moment of 2.5x EBITDA share price-wise, I think that's a pretty good investment in terms of buying back shares at that level, and so it will depend on the share price as well. But of course, also, critically, depend on the health of our balance sheet. So you can probably take the signals from what we did last year in terms of spending GBP 5.5 million and leaving ourselves not much below the year before, just over GBP 1 million in terms of net cash. I would've thought we'll take a similar strategy in 2024. Albert, do you have anything?
Yeah. I mean, this is, you know, shareholder returns are really important to us. We're all shareholders on the board. We know our institutions and our shares as well, and returns at the moment are paramount in our minds as we see the cash generation so strong.
Good. Thank you, Albert. Next question, what kind of work does Staffline do in the defense sector? What kind of clients do you serve in this sector?
Yeah. I mean, the defense sector in this country, as you know, is world-class. It's based mainly in the southwest, in the area where Bristol is the main city, and that's where Omega is located. And we're talking about engineering, and defense roles here, and mainly we are delivering into the supply chain. So these are multiple organizations of scale, some of them small, some of them larger, that actually are sited around the large, well-known defense companies, and obviously, they are all looking for engineering and technology expertise. And we're certainly not seeing any letup in demand. I mean, the candidate market is a little bit up and down. Candidates have lost a little bit of that sort of post-pandemic confidence they had.
You've read it in Page and in Hays and in Walters, how candidates are a little bit more cautious, and that, of course, creates some friction in the system, but we're not seeing, and we're not getting reports from our team of a letup in the demand for defense work. So the primary challenge there is candidates scarce. It's a tight labor market, but, you know, it's good to see that it's holding up our perm business. It's also pretty inelastic in terms of price. So if customers need engineers desperately because they've got large defense contracts that are generally significant global and they're also very, very important to, you know, to, to the political environment in which we're operating, then obviously, there's better margins for the supply chain for meeting those hard-to-fill vacancies.
Yeah. And the one additional fact I would add in there, and apologies for the pun here, but, Staffline, as illustrated through last year and the beginning of this year, I think has a great position in, with a small d, defensive sectors. And if you combine defense with a capital D, with the food retail and food supply chain sectors that we are significantly operating in, that, I think, really puts us in a good position, in what was a, you know, what has been a challenging recruitment environment. So, a good characteristic there. Next question is, what are the top priorities for strategic expansion, especially in new markets or sectors?
So the first thing is our geographical expansion into the Republic of Ireland from a very strong, solid market-leading base in Belfast, in the north of Northern Ireland. Now, that is where we are pushing for geographic expansion. We see the market there is sort of quite resilient, quite strong. GDP growth numbers have exceeded the UK in some of the years running up to this current year, and we see the market for recruitment buoyant. So that's the first thing. The second thing is, within our sectors, we want to look at more managed services. Customers are looking to outsource large-scale recruitment.
G4S is a good example of that, where we're managing the recruitment for a particular sector in which they're involved in, and we're providing the dedicated recruiters embedded in the market and embedded in their in that account to do that. So looking at RPO, Datum is very much our RPO brand, that they've been very, very strong in construction, but as construction has slowed down over the last couple of years, they've actually been looking at other sectors. So that is another service we're looking at. But also, we mentioned medical in the chairman's statement and the CEO statement. Quite important for us, medical. We're bringing in nurses, particularly into the Republic of Ireland, on a permanent basis, and medical staff.
We're tendering for large-scale medical frameworks in Ireland, in Northern Ireland and the Republic of Ireland. Also, we're focusing on medical as one of those sectors that's going to have sort of an infinite level of demand provided you can find the candidates. We've set up the supply chain now, and we're ready to start reaping the rewards for that. So those are just some of the new markets and sectors. We obviously like perm because this business was a sort of 95%-plus perm business. We've now moved the date a little bit because we want to see more perm, up to 20% of our GP coming from the permanent recruitment market. It's cash-generative. It's highly high margin.
Of course, it's a good sort of service to yin and yang between temp and perm as customers change.
Thank you, Albert. Next question, what were the indicators and factors that led Staffline to take the decision to exit the loss-making PeoplePlus in-person skills business? For how long has it been making losses, and how much have we lost so far on this line of business? So I'll take that. So in terms of the indicators and factors that led us to make this decision, the especially driven by the pandemic, this operating model just wasn't efficient anymore, and we see huge and better opportunities in digital and online skills training.
In terms of the length of, how long it's been making losses for, well, we started to see that trend in, I would say, 2022, late 2021, early 2022, started to see it, but wanted to see if it was really crystallising, which it did, throughout 2022, which triggered the decision to be made in 2023 to exit that business. And in terms of how much we've lost, well, actually, the losses we saw were we've illustrated the charge of GBP 3.1 million in 2023. The losses started, but a much smaller number than that towards the end of 2022, but we could see the trend of activity. So although we did take the losses of 2023, there wasn't significant losses before that, and we I suppose you could say we nipped that in the bud and made the correct strategic decision to exit that business.
In terms of timing, really important that we managed the process well, and therefore, we didn't rush into there. We were looking at contracts that we have got responsibilities to deliver, and so therefore, the timing of that was around the sort of termination or end of contract useful contract life that we had with the Department of Education. So it was a managed exit of that business, bearing in mind we were still delivering on a number of contracts right up until the point at which we closed the business.
Great. Thank you, Albert. Next question, you mentioned you have a significant amount of completed tenders, circa GBP 310 million, which are awaiting a decision. What is your historic win rate on bids at PeoplePlus? So I think our win rate, I would say, probably 1 in 2, 50%, but there is a large element of that GBP 310 million is in our sweet spot at the moment, in justice, and one of them is in our contract which we're currently operating in, so our main prison contract, which we are delivering successfully. And I would say we're probably in the most successful period of delivery of that contract in the last 4, 5, 6 years. So we are cautiously confident, and in what is a sector within that GBP 310 million is in the justice sector.
Albert illustrated that before, the amount that's in that. So this is probably the most amount we've had in the justice sector, so probably the historic win rate on bids might not be totally indicative, plus a significant chunk of that 310 is one major contract that we hear about in the second half of this year. Next question, given the strong cash generation and net cash position, are you considering further buybacks? We have said there, the chairman, in his statement today, makes that comment that we would strongly consider buybacks, certainly at the current level. We're talking 2.5 times, approximately 2.5 times EBITDA.
We think that is a good level at which to consider share buybacks, but of course, all options are on the table as we go through the next months and years as to what our capital allocation policy would be. But echoes of last year, if the position is similar, would find their way into this year. Next question, within PeoplePlus, would you consider going back to classroom-based delivery if it proves to be a better way of addressing current employability challenges?
I think we would absolutely consider that, but as management that came in in 2019, 2020, and inherited that business, and we really got under the bonnet of the commercial opportunities in that business, but also the commercial challenges, and therefore, addressed those, we would have a very, very close look at the commercial operating model before investing in leases because that means investing in leases in buildings. Although you could take short-term leases, but that's more expensive. So we'd be very careful about considering that, especially post-COVID, and in a world which is becoming ever more digital. Although I do accept, of course, as the return to the high street illustrates after COVID, that in-person activity is a possible channel of delivery that people might prefer than digital, but only if it is profitable. And that is the reason why we exited the last sector.
We would look at that.
Yeah. The volumes have been affected by the cost of living crisis as well, and that's what while you will hear, you know, that the cost of living crisis might be sort of easing, people who are looking for work or who are between work, between jobs, to actually devote time to train is very expensive for them. And where there's a tight labor market and they can get a job relatively quickly, they're not likely to indulge in in-person training. It's expensive. It's for the candidates. It requires transportation, time investment, and obviously, the salary the sacrifice of not earning. And I think that's one of the biggest factors that have led us to believe that this market might be a smaller market going forward for a long time.
Candidates are getting younger, and they are more digitally native, and therefore, they're looking more for online solutions, so we'll focus on that. The other issue is really inflation, and on tutors and teachers, and the sort of individuals one needs to do effective training, that the inflation and the pressures on those wages have been quite substantial, and the skill shortages have driven them up. So, you know, that's a challenge to run a long-term contract with such high levels of inflation. I don't see that going away anytime soon. Of course, we have a commanding position in the Justice Department in terms of training, but there, the volumes are relatively stable.
They're guaranteed, and actually, the process is one that's much more suited to our business, in terms of the style and the way we deliver training. So we're not out of the skills and training market. We're focusing on justice as our key area of strength.
Thanks, Albert. Next question, has there been any management talk about taking the company private over the last two years?
We're sorry, we can't speculate about corporate activity like that much as you'd like to ask. You're allowed to ask the question, but we really can't speculate. Alf, we're just focused on getting the best results we can, given the market and the circumstances, and doing the best jobs we can for the sort of, you know, 1,500-2,000 permanent staff that are in our administration, selling and our operational teams, and of course, also many, many people in the field, in the prisons and in employability centers across the country. You know, our commitment is to make sure that, you know, that they work for a company they can be proud of and that shareholders get a good return.
Thank you, Albert. Final question, I think, unless anyone asks another one while I'm answering this one, how is the BMW contract? There's been lots of talk in terms of the food and retail and supply chain news. Well, the BMW contract's going very well. As we spoke about last year, we, you know, hope to get supply chain opportunities in the BMW supply chain world, which has materialized. You get small opportunities across that supply chain. But yeah, the BMW contract's going very well, profitable, successful, stable, and a great opportunity for new and further work in the automotive sector moving forward. No other questions. Final word from me before I just hand back to Albert. Thank you very much to all of you for joining and following the business over the last number of years.
We really feel as though, especially as we've seen the hours start to grow at the beginning of this year, that the wins of late last year and early this year, that we see real opportunity for the business in 2024 and beyond. And Albert, handing over to you to just conclude.
Yeah. I mean, the outlook is brightening, in my view, particularly for Staffline, based on the organic growth that we've generated last year. We'll get the full annualized benefit this year. Delighted that the cost base in the first eight weeks, as we've watched it and looked at it and scrutinized it, is reflecting those changes we implemented. The cost of the changes that we put through as non-underlying, though painful, people don't like to see non-underlying. I totally accept that. I'm in a similar situation. I'd much prefer clean earnings, but they were necessary. Now, many of our competitors and our peers are starting to feel that that's a strategic option for them this year. We wanted to be early in making those changes. We wanted to make them quickly so that we could feel the benefit.
In terms of the outlook, in terms of cash, in terms of share buybacks and returns to shareholders, it's all going well. We feel, you know, high levels of confidence that the business will be well-funded during the year despite the growth, and therefore, gives us lots and lots of options in terms of what we do, in the next 12 months. But yes, the green shoots are actually turning into reality, and we're seeing, in the first 8 weeks, as we've said, double-digit increases in perm and 5% increases in temp working hours as a result of those, wins. And it just remains for us to wait for those tenders, those all-important tenders, as we see the results announced, you know, cautiously optimistic that we're going to win our fair share.
With that, thank you from Daniel and I, and we'll catch up in the next event.
Thank you.
That's great. Albert, Daniel, thank you very much indeed for updating investors today. Could I please ask investors not to close this session, as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Staffline Group PLC, we'd like to thank you for attending today's presentation, and good morning to you all.