Whitehead Mann, the headhunter, has dramatically cut its losses as a restructuring programme paid off.
The company, which almost collapsed after it expanded too fast, shrank pre-tax losses to £1.6m for the year to March, an improvement on the £19.6m loss the previous year. It was in profit in the second half and should return to the black for the full financial year in 2006-07.
Jonathan Baines, the chairman, said: "Now that we have completed the reorganisation, we are much better placed to focus on our clients and generate growth. We have achieved a great deal and the group has a clear and measurable plan for implementing the next stages of its strategy."
Whitehead, which specialises in jobs paying more than £100,000, has reduced the size of the group, closing its disastrous US operation and its "interim management" unit. It also pulled off a £13m refinancing last year. In 2000 and 2001, the company made six acquisitions in the space of 18 months.
Chris Merry, the chief executive, said: "The economy is in much better shape. M&A [mergers and acquisitions] activity has come back, which helps us. It means that people change jobs and there is a need to recruit more bankers." He also said the company was "holding our own" against key rivals - its competitors include Korn/Ferry and Heidrick & Struggles.
Oriel Securities forecast a profit of £3.1m for the current financial year. The broker said: "Overall, these are a very creditable set of results. Management has delivered on expectations notwithstanding the huge amount of activity required to refocus the business.
"Having got the cost base under control during 2006, the senior management team can now focus primarily on recruiting additional high-quality revenue earners to ensure the top line growth trajectory we are forecasting is achieved."