A RECRUITMENT agency that lost a major contract when Samsung pulled out of the region has bounced back with a big increase in profits.

Interim results posted by Northern Recruitment Group (NRG), of Grey Street, Newcastle, revealed a 63 per cent rise in pre-tax profits, from £1.017m to £1.657m.

Leo Finn, NRG chairman, said: "Our business model maintains regional strength and a low cost base, together with the proven capacity to handle major national projects efficiently and cost- effectively.

"Prospects remain encouraging for the key regional economies in which we operate."

Figures for the six months to December 31 showed there was only a marginal reduction in turnover from temporary placements, despite the loss of the Samsung contract when its electronics plant at Wynyard, on Teesside, closed last April.

Excluding this impact, temporary revenues grew by 15 per cent.

Overall, turnover was only one per cent higher at £11.063m, but costs were down by 12 per cent.

Lorna Moran, who founded the business in 1977, said: "We have successfully replaced our lost Samsung contract with new business gains, notably in the automotive and distribution sectors.

"By focusing on the maintenance of a low cost base, good housekeeping and tight controls, we are well-equipped to continue winning new and repeat business and to deliver both client satisfaction and shareholder value."

The company works in the public and private sector and employs 100 people in its NRG Connect contact centre in Newcastle, which provides one of the largest response handling facilities in UK recruitment.

It is retained by the Department of Trade and Industry to handle all board member appointments for regional development agencies in the UK, and has recently won a contract to recruit 350 lay members for employment tribunals nationwide.

It also has approved supplier status with the Cabinet Office for executive recruitment and recently secured a major framework agreement for senior recruitment with the Office of the Deputy Prime Minister.

In the private sector, new clients include npower and Newcastle Building Society.

Permanent fees grew by 24 per cent on a like-for-like basis and gross profit from permanent recruitment was up by 6.5 per cent on last year.

The company opened premises at Teesdale Business Park, near Stockton, in October.

The group, which also has offices in Darlington, York and Middlesbrough, also announced the appointment of Richard Hutton as non-executive director. Mr Hutton, 36, is group financial controller of Greggs plc.