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ITQ Interquest

13.00
0.00 (0.00%)
28 Mar 2024 - Closed
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Share Name Share Symbol Market Type Share ISIN Share Description
Interquest LSE:ITQ London Ordinary Share GB00B07W3X22 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 13.00 10.00 16.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

InterQuest Group PLC Interim Results (0155J)

06/09/2016 7:01am

UK Regulatory


Interquest (LSE:ITQ)
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TIDMITQ

RNS Number : 0155J

InterQuest Group PLC

06 September 2016

InterQuest Group plc

("InterQuest" or "the Group")

Interim Results

InterQuest Group plc (AIM: ITQ), the specialist recruitment business operating in the 'new digital economy', is pleased to announce its unaudited interim results for the six months ended 30 June 2016.

Financial highlights

-- Revenue down 9% to GBP73.8m (2015: GBP81.2m)

-- Net Fee Income ("NFI") down 10% to GBP11.0m (2015: GBP12.1m)

-- Adjusted PBT* down 44% to GBP1.4m (2015: GBP2.5m)

-- Net loss (after goodwill impairment of GBP3.2m) of GBP2.4m (2015: GBP1.6m profit)

-- Diluted adjusted earnings per share down 46% to 3.0 pence (2015: 5.5 pence)

-- Basic loss per share of 6.7 pence (2015: 4.7 pence earnings)

-- Net cash used in operating activities GBP2.9m (2015: net cash generated GBP2.8m)

-- Net debt, consisting of our working capital facility which we use to finance fluctuations in contractor levels, and cash increased during the period to GBP9.9m (2015: GBP6.9m)

-- Interim dividend of 0.5 pence per share to be paid on 16 November 2016 (2015: 1.0 pence)

-- Professional contract recruitment margins were up 90 bps to 17.6% (2015: 16.7%).

-- Contract recruitment margins on all deals (excluding payroll) increased 90 bps to 13.2% (2015: 12.3%)

*Adjusted for share based payment charge, amortisation, impairment and non-recurring items

Operational highlights

-- The average permanent fee per placement has increased by 4% to GBP6.8k (GBP2015: GBP6.5k) through developing a focus on senior roles and supporting our clients at the management and leadership level.

-- The Group has grown the Net Fee Income earned across the divisions through its Solutions clients by 42% to GBP1.6m (2015: GBP1.1m) through expanding on the previous services offered to our managed service clients and adding a further client taking the total to six.

-- The Group continues to focus on supporting our clients to overcome the staffing challenges presented by the digital economy and has made significant progress in developing innovative solutions for our clients.

Chris Eldridge, Chief Executive Officer, commented: "A root and branch reform has been necessary at our ECOM digital recruitment subsidiary which was acquired three years ago, requiring a non-cash impairment charge of GBP3.2m resulting in a total loss of GBP2.4m for the Group although before exceptional items the Group reported Adjusted PBT of GBP1.4m. We have now put the ECOM business on a firmer footing and I am confident it will make a significant contribution to the Group in the future. We are also encouraged by the progress we have made in our Solutions business and can take satisfaction from the fact that our contract recruitment margins and average permanent placement fees have increased which is evidence of the new initiatives we have been putting in place during the period.

Gary Ashworth, Chairman, commented: "The Group's results for the first half of 2016 are below our expectations at the start of the year, particularly in the ECOM brand and the Public Sector division, and were impacted by uncertainty in the UK market leading up to the EU referendum. Following a period of change, the new management team is in place and focused on progressing the Group strategy of expanding our reach in the digital economy and the further development of the Group's Solutions business. We have refocused or removed non profitable elements of the business which we believe will help profits in the medium / long term.

The recent acquisition of Rees Draper Wright on 3 August 2016 will also extend our geographic reach further into the strong markets of the US and Europe. On behalf of the Board I would like to thank all of my colleagues across the Group for their hard work and commitment through these times of change."

This announcement contains inside information for the purposes of Regulation (EU) No 596/2014.

Enquiries:

 
 InterQuest Group plc 
 Chris Eldridge, Chief Executive Officer 
  David Bygrave, Chief Financial Officer 
                                                    +44 (0)20 7025 0100 
  Panmure Gordon (UK) Limited (Nomad and Broker)     +44 (0)20 7025 0100 
 Karri Vuori or Dominic Morley                      +44 (0)20 7886 2500 
 

Chief Executive's Review

The challenges that digitisation cause industry show no signs of abating; in fact they are becoming progressively more challenging to overcome. InterQuest is uniquely positioned to support the recruitment demands of all businesses seeking to re-define their business model and how they take their services to a global market.

Through our ability to identify and build networks with professionals who possess scarce technical and leadership skills, InterQuest is able to provide a solution to our customers' most pressing issues.

During the first half of 2016 the Group's contractor numbers were affected at ECOM by a reduction in demand resulting from changes in buying behaviour and sector. Action has been taken to refocus the business and reverse the decline. In early 2015 the Group also benefited from a spike in demand from the Public Sector which, following the General Election, was not replicated in the first half of 2016.

During the first half of the year the business implemented a number of initiatives to drive the business further into the digital market and ensure that our clients are being offered a collaborative recruitment solution encompassing the breadth of the Group's specialisations. As part of this process the Group reviewed the markets being addressed and as a result focused on the sectors and disciplines that are seeing wage inflation and increasing levels of demand. The Group has looked to reduce levels of lower value business and aspire to move further up the value chain.

The Group continues to invest in market leading learning and development and has seen improvements across the business as a result.

On entering the second half of 2016 the business is well set for growth, and to capitalise on the opportunities in the Digital markets.

Average permanent recruitment fees were 4% higher in the first half of 2016 whilst contract recruitment margins on professional recruitment deals (those at margins over 12%) increased from 16.7% in 2015 to 17.6% in 2016. Contract recruitment margins on all deals (excluding payroll) increased to 13.2% from 12.3%.

The trading performance at ECOM, the Group's digital recruitment division, has been below expectations and has led to an impairment in goodwill for the Group amounting to GBP3.2m, set against the original investment in the acquisition of ECOM.

We are declaring an interim dividend of 0.5 pence (2015: 1.0 pence) and this will be paid on 16 November 2016 to shareholders on the register on 21 October 2016.

Although the first half of 2016 was challenging financially, this masks the significant operational progress we have made across a number of our key developmental objectives including growing our managed service business, enhancing the Group's learning and development capability, improving retention and enabling increased levels of cross selling. The leadership team looks forward to integrating the recent acquisition of Rees Draper Wright, benefiting from joint client development and building upon the platform in the US. We remain mindful of ongoing economic uncertainty and are taking steps to ensure that the Group is agile enough to respond to any changes that we may see in market conditions.

I would like to take the opportunity to thank all of our colleagues across InterQuest on the support they have given the new leadership team and commend them on their focus and commitment to delivering excellence for our clients and candidates.

Chris Eldridge

Chief Executive Officer

6 September 2016

Unaudited condensed consolidated interim statement of comprehensive income

 
                                          6 months    6 months       12 months 
                                                to          to              to 
                                           30 June     30 June     31 December 
                                              2016        2015            2015 
                                  Note     GBP'000     GBP'000         GBP'000 
 
Revenue                                     73,770      81,196         158,613 
Cost of sales                             (62,816)    (69,091)       (134,800) 
                                        ----------  ----------  -------------- 
Gross profit                                10,954      12,105          23,813 
 
Amortisation                                 (172)       (172)           (345) 
Other administration 
 costs                                     (9,613)     (9,567)        (18,554) 
                                        ----------  ----------  -------------- 
Total administrative 
 expenses                                  (9,785)     (9,739)        (18,899) 
                                        ----------  ----------  -------------- 
 
  Operating profit before 
  non-recurring items                        1,169       2,366           4,914 
 
Impairment                                 (3,152)           -               - 
Other non-recurring 
 items                                        (34)       (174)           (337) 
                                        ----------  ----------  -------------- 
Operating (loss)/profit                    (2,017)       2,192           4,577 
 
Acquisition costs                                -           -            (21) 
Finance costs                                (178)       (172)           (444) 
                                        ----------  ----------  -------------- 
(Loss)/profit before 
 tax                                       (2,195)       2,020           4,112 
Income tax expense                 5         (214)       (396)         (1,027) 
                                        ----------  ----------  -------------- 
(Loss)/profit for the 
 period/year                               (2,409)       1,624           3,085 
 
(Loss)/profit and total 
 comprehensive (expense)/income 
 for the period/year                       (2,409)       1,624           3,085 
                                        ==========  ==========  ============== 
Attributable to: 
Owners of the parent                       (2,436)       1,617           3,020 
Non-controlling interests                       27           7              65 
                                        ----------  ----------  -------------- 
Total comprehensive 
 (expense)/income for 
 the period/year                           (2,409)       1,624           3,085 
                                        ==========  ==========  ============== 
 
Earnings per share 
 from both total and 
 continuing operations: 
                                             Pence       Pence           Pence 
Basic (loss)/earnings 
 per share                         6         (6.7)         4.7             8.5 
                                        ==========  ==========  ============== 
Diluted (loss)/earnings 
 per share                         6         (6.5)         4.4             8.2 
                                        ==========  ==========  ============== 
 

All results for the Group are derived from continuing operations in the current period.

The accompanying notes form an integral part of this unaudited condensed consolidated interim report.

Unaudited condensed consolidated interim statement of financial position

 
                                30 June   30 June  31 December 
                                   2016      2015         2015 
                                GBP'000   GBP'000      GBP'000 
 
ASSETS 
Non-current assets 
Property, plant and 
 equipment                          533       777          611 
Goodwill                         15,715    18,867       18,867 
Other intangible 
 assets                             827     1,173        1,000 
Deferred income tax 
 assets                               -       149            - 
Total non-current 
 assets                          17,075    20,966       20,478 
                               --------  --------  ----------- 
 
Current assets 
Trade and other receivables      31,967    28,621       27,417 
Cash and cash equivalents           807     1,444        1,181 
                               --------  --------  ----------- 
Total current assets             32,774    30,065       28,598 
                               --------  --------  ----------- 
Total assets                     49,849    51,031       49,076 
                               --------  --------  ----------- 
 
LIABILITIES 
Current liabilities 
Trade and other payables       (17,293)  (18,972)     (16,698) 
Borrowings                     (10,752)   (8,302)      (7,180) 
Current tax payable             (1,030)   (1,142)      (1,571) 
                               --------  --------  ----------- 
Total current liabilities      (29,075)  (28,416)     (25,449) 
                               --------  --------  ----------- 
 
Non-current liabilities 
Deferred income tax 
 liability                        (205)         -        (212) 
                               --------  --------  ----------- 
Total non-current 
 liabilities                      (205)         -        (212) 
Total liabilities              (29,280)  (28,416)     (25,661) 
                               --------  --------  ----------- 
Net assets                       20,569    22,615       23,415 
                               ========  ========  =========== 
 
EQUITY 
 
Share capital                       363       353          359 
Share premium account            10,646    10,592       10,632 
Capital redemption 
 reserve                             12        12           12 
Retained earnings                 7,666    10,067       10,829 
Share based payment 
 reserve                          2,471     2,150        2,199 
Share buy back reserve            (666)     (666)        (666) 
                               --------  --------  ----------- 
Total issued share 
 capital and reserves 
 attributable to the 
 owners of the parent            20,492    22,508       23,365 
Non-controlling interests            77       107           50 
                               --------  --------  ----------- 
Total equity                     20,569    22,615       23,415 
                               ========  ========  =========== 
 
 
 

The accompanying notes form an integral part of this unaudited condensed consolidated interim report.

Unaudited condensed interim statement of changes in equity

 
 
                                                                           Share      Share 
                                        Share       Capital                based        buy           Non 
                              Share   premium    redemption   Retained   payment       back   controlling     Total 
                            capital   account       reserve   earnings   reserve    reserve      interest    equity 
                            GBP'000   GBP'000       GBP'000    GBP'000   GBP'000    GBP'000       GBP'000   GBP'000 
 
Balance at 1 
 January 2015                   344    10,468            12     10,322     2,006      (666)           288    22,774 
                           --------  --------  ------------  ---------  --------  ---------  ------------  -------- 
Comprehensive 
 income 
Profit for the 
 period                           -         -             -      1,617         -          -             7     1,624 
Total comprehensive 
 income for the 
 period                           -         -             -      1,617         -          -             7     1,624 
Transactions 
 with owners 
Movement in share 
 based payment 
 reserve                          -         -             -          -       144          -             -       144 
Issue of share 
 capital                          9       124             -          -         -          -             -       133 
Dividends                         -         -             -      (515)         -          -             -     (515) 
Elimination of 
 reserves on acquisition 
 of IQ Telecom 
 NCI                              -         -             -          -         -          -         (242)     (242) 
Elimination of 
 deficit on acquisition 
 of Korus Group 
 NCI                              -         -             -          -         -          -            70        70 
Adjustment to 
 IQ Telecom NCI                   -         -             -    (1,037)         -          -          (16)   (1,053) 
Adjustment to 
 Korus Group NCI                  -         -             -      (320)         -          -             -     (320) 
                           --------  --------  ------------  ---------  --------  ---------  ------------  -------- 
Total contributions 
 by and distributions 
 to owners                        9       124             -    (1,872)       144          -         (188)   (1,783) 
                           --------  --------  ------------  ---------  --------  ---------  ------------  -------- 
Balance at 30 
 June 2015                      353    10,592            12     10,067     2,150      (666)           107    22,615 
 
Balance at 1 
 July 2015                      353    10,592            12     10,067     2,150      (666)           107    22,615 
                           --------  --------  ------------  ---------  --------  ---------  ------------  -------- 
Comprehensive 
 income 
Profit for the 
 period                           -         -             -      1,403         -          -            58     1,461 
Total comprehensive 
 expense for the 
 period                           -         -             -      1,403         -          -            58     1,461 
 
Transactions 
 with owners 
Movement in share 
 based payment 
 reserve                          -         -             -          -        49          -             -        49 
Issue of share 
 capital                          6        40             -          -         -          -             -        46 
Current tax credit 
 on share based 
 payments                         -         -             -      (191)         -          -             -     (191) 
Deferred tax 
 credit                           -         -             -         39         -          -             -        39 
Dividends relating 
 to 2015                          -         -             -      (574)         -          -             -     (574) 
Elimination of 
 reserves on acquisition 
 of IQ Telecom 
 NCI                              -         -             -          -         -          -          (65)      (65) 
Elimination of 
 deficit on acquisition 
 of Korus Group 
 NCI                              -         -             -          -         -          -          (66)      (66) 
Adjustment to 
 IQ Telecom NCI                   -         -             -         24         -          -            16        40 
Adjustment to 
 Korus Group NCI                  -         -             -         61         -          -             -        61 
Total contributions 
 by and distributions 
 to owners                        6        40             -      (641)        49          -         (115)     (661) 
Balance at 31 
 December 2015                  359    10,632            12     10,829     2,199      (666)            50    23,415 
                           ========  ========  ============  =========  ========  =========  ============  ======== 
 
 
 
 
                                                               Unaudited condensed interim statement of changes 
                                                                                          in equity (continued) 
 
                                                                        Share      Share 
                                     Share       Capital                based        buy           Non 
                           Share   premium    redemption   Retained   payment       back   controlling    Total 
                         capital   account       reserve   earnings   reserve    reserve      interest   equity 
                         GBP'000   GBP'000       GBP'000    GBP'000   GBP'000    GBP'000       GBP'000  GBP'000 
 
Balance at 1 
 January 2016                359    10,632            12     10,829     2,199      (666)            50   23,415 
                        --------  --------  ------------  ---------  --------  ---------  ------------  ------- 
Comprehensive 
 income 
Profit for the 
 period                        -         -             -    (2,436)         -          -            27  (2,409) 
Total comprehensive 
 income for the 
 period                        -         -             -    (2,436)         -          -            27  (2,409) 
 
Transactions 
 with owners 
Movement in share 
 based payment 
 reserve                       -         -             -          -       272          -             -      272 
Issue of share 
 capital                       4        14             -          -         -          -             -       18 
Dividends                      -         -             -      (727)         -          -             -    (727) 
Total contributions 
 by and distributions 
 to owners                     4        14             -      (727)       272          -             -    (437) 
Balance at 30 
 June 2016                   363    10,646            12      7,666     2,471      (666)            77   20,569 
                        ========  ========  ============  =========  ========  =========  ============  ======= 
 

Unaudited condensed consolidated interim statement of cash flows

 
                                       6 months  6 months  12 months 
                                             to        to      to 31 
                                        30 June   30 June   December 
                                           2016      2015       2015 
                                        GBP'000   GBP'000    GBP'000 
 
Cash flows from operating 
 activities 
(Loss)/profit after taxation            (2,409)     1,624      3,085 
Adjustments for: 
        Depreciation                        221       232        441 
        Disposal of assets                    -         -       (10) 
        Share-based payment charge          272       144        193 
        Finance costs                       178       240        444 
        Amortisation                        172       172        345 
        Impairment                        3,152         -          - 
        Income tax expense                  214       396      1,027 
        Increase in trade and other 
         receivables                    (4,550)   (2,252)    (1,052) 
        Increase in trade and other 
         payables                           594     2,690      2,019 
                                       --------  --------  --------- 
Cash (used in)/generated 
 from operations                        (2,156)     3,246      6,492 
Income taxes paid                         (759)     (488)      (688) 
                                       --------  --------  --------- 
Net cash (used in) / generated 
 from operating activities              (2,915)     2,758      5,804 
                                       --------  --------  --------- 
 
Cash flows from investing 
 activities 
Purchase of property, plant 
 and equipment                            (144)      (76)      (138) 
Acquisition of subsidiaries, 
 net of cash acquired                         -         -    (1,560) 
Acquisition of non-controlling 
 interest in subsidiaries                     -     (563)          - 
Loan notes paid                               -         -      (443) 
Net cash used in from investing 
 activities                               (144)     (639)    (2,141) 
                                       --------  --------  --------- 
 
Cash flows from financing 
 activities 
Proceeds from issue of share 
 capital                                     18       111        179 
Proceeds from sale of shares 
 in subsidiary                                -         -         25 
Net (decrease) / increase 
 in discounting facility                  3,572   (1,310)    (2,432) 
Interest paid                             (178)     (172)      (444) 
Dividends paid                            (727)     (515)    (1,089) 
                                       --------  --------  --------- 
Net cash (used in) / received 
 from financing activities                2,685   (1,886)    (3,761) 
                                       --------  --------  --------- 
 
Net increase in cash and 
 cash equivalents                         (374)       233       (98) 
 
Effects of currency translation 
 on cash and cash equivalents                 -      (68)          - 
 
Cash, cash equivalents and 
 overdrafts at beginning of 
 period/year                              1,181     1,279      1,279 
 
Cash, cash equivalents and 
 overdrafts at end of period/year           807     1,444      1,181 
                                       --------  --------  --------- 
 

The accompanying notes form an integral part of this unaudited condensed consolidated interim report.

Notes to the unaudited condensed consolidated interim report

   1          Nature of operations and general information 

The InterQuest Group is a specialist technology recruitment business. The Group focuses on both permanent and contract recruitment across a range of sectors, specifically in high growth functions including digital, information security, analytics, telecommunications, change management and other high value niche markets. This is underpinned by an expanding capability in recruitment process outsourcing, helping our clients procure resources in a highly effective manner.

The Group's strategy is to continue to focus on those markets that are experiencing growth due to high demand for transformational technologies. We are witnessing acute skill shortages for technologies that will enable our clients to either augment or transform their operating model to capitalise on the new digital economy. This demand is having an upward impact on salaries as well as permanent and contract recruitment margins.

The Group's unaudited condensed consolidated interim report is presented in Pounds Sterling (GBP'000).

The unaudited condensed consolidated interim report has been approved for issue by the Board of Directors on 5 September 2016.

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2015 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498 of the Companies Act 2006.

   2          Basis of preparation 

The unaudited condensed consolidated interim report is for the six months ended 30 June 2016 and has been prepared in accordance with the accounting policies as set out in the annual financial statements for the year ended 31 December 2015. The unaudited condensed consolidated interim report should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (EU).

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of the unaudited condensed consolidated interim report.

   3          Summary of significant accounting policies 

The same accounting policies, presentation and methods of computation are followed in this unaudited condensed consolidated interim report as were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2015.

Notes to the unaudited condensed consolidated interim report

   4          Revenue and segmental reporting 

For management reporting purposes the Group is organised into the following five divisions:-

1. Niche - comprising specialist recruitment practices focused on Analytics, Business Intelligence, Cyber Security, Internet of Things, Telecommunications, Business Change, Risk and Compliance which provide access to talent in some of the most critical areas of demand in the modern economy;

2. ECOM Recruitment Limited - the UK's leading recruiter in the digital market space which the Group acquired in November 2013;

3. Enterprise - comprising our Recruitment Process Outsourcing services together with legacy client relationships with significant customers in the financial services and retail sectors;

   4.   Public sector - focussed on the public sector and not for profit markets; and 
   5.   Other - including the group sales function. 

On 1 January 2016 the trade and assets of Mint Recruitment Solutions Limited were transferred to InterQuest Group (UK) Limited. Subsequent to the transfer the business is now continuing to trade under two trading divisions of InterQuest Group (UK) Limited; IQ Change, based in London, and IQ Digital, based in Manchester. In order that the 2015 segmental analysis may be comparable to the 2016 performance the Business Change division is now shown under the new 2016 structure in Niche.

All business units provide contract and permanent recruitment services and have similar economic characteristics and are considered to meet the aggregation criteria of IFRS.

Information regarding segment assets is not provided to the Group's chief operating decision maker. This is because the Group considers net fee income (gross profit) and profitability for the purpose of making decisions about allocation of resources.

Six month period to 30 June 2016

 
                                                        Public 
                          Niche     ECOM   Enterprise   Sector    Other             Total 
                        GBP'000  GBP'000      GBP'000  GBP'000  GBP'000           GBP'000 
 
     Revenue             27,675    6,137       25,749   12,434    1,775            73,770 
     Gross profit         5,374    1,621        2,292    1,041      626            10,954 
 
     Divisional EBITA     1,713      153          794      517       81             3,258 
     Unallocated central 
      overheads                                                                   (1,645) 
                                                                         ---------------- 
     EBITA per 
      management 
      accounts                                                                      1,613 
 
  Reconciling items to amounts reported in the interim statement of comprehensive income: 
     Share based 
      payment                                                              (272) 
     Amortisation                                                          (172) 
     Impairment                                                          (3,152) 
     Non-recurring 
      items                                                                 (34) 
     IFRS operating 
      profit                                                             (2,017) 
     Finance costs                                                         (178) 
     Profit before tax                                                   (2,195) 
                                                                         ======= 
 
 

Notes to the unaudited condensed consolidated interim report

   4          Revenue and segmental reporting (continued) 

Six months to 30 June 2015

 
                                                          Public 
                           Niche     ECOM   Enterprise    Sector    Other           Total 
                         GBP'000  GBP'000      GBP'000   GBP'000  GBP'000         GBP'000 
 
     Revenue              29,064    8,898       24,324    17,824    1,086          81,196 
     Gross profit          6,040    2,153        1,796     1,763      353          12,105 
 
     Divisional EBITA      2,255      587          717       988       46           4,593 
      Unallocated central 
       overheads                                                                  (1,911) 
                                                                           -------------- 
     EBITA per management 
      accounts                                                                      2,682 
 
  Reconciling items to amounts reported in the interim statement of comprehensive income: 
     Share based 
      payment                                                              (144) 
     Amortisation                                                          (172) 
     Non-recurring 
      items                                                                (174) 
     IFRS operating 
      profit                                                               2,192 
     Finance costs                                                         (172) 
     Profit before tax                                                     2,020 
                                                                           ===== 
 
 

There are no external customers who individually represent more than 10% of the entity's external revenues during the six month period ended 30 June 2016 and 30 June 2015.

 
 
                                   Revenue                                            Gross profit 
               Six month period to 30     Six month period to 30     Six month period to 30     Six month period to 30 
                            June 2016                  June 2015                  June 2016                  June 2015 
                              GBP'000                    GBP'000                    GBP'000                    GBP'000 
 
Permanent                       3,833                      3,993                      3,833                      3,993 
Contract                       69,937                     77,203                      7,121                      8,112 
            -------------------------  -------------------------  -------------------------  ------------------------- 
                               73,770                     81,196                     10,954                     12,105 
            =========================  =========================  =========================  ========================= 
 
 

The Group does not report items below EBITA by segment in its internal management reporting.

Notes to the unaudited condensed consolidated interim report

   5          Income tax expense 
 
                               6 months  6 months     12 months 
                                     to        to            to 
                                30 June   30 June   31 December 
                                   2016      2015          2015 
                                GBP'000   GBP'000       GBP'000 
 
Current tax 
Corporation tax on 
 profits for the period/year        222       433           975 
Adjustment in respect 
 of prior periods                     -         -          (50) 
Adjustment in respect 
 of non-recurring items               -      (37)          (68) 
                               --------  --------  ------------ 
Total current tax                   222       396           857 
 
Deferred tax 
Origination and reversal 
 of temporary difference            (8)         -          (37) 
Adjustment in respect 
 of prior periods                     -         -           207 
Total deferred tax                  (8)         -             - 
 
Total income tax expense            214       396         1,027 
                               --------  --------  ------------ 
 

Notes to the unaudited condensed consolidated interim report

   6          Earnings per share 

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period/year.

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post-tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

 
                                                       12 months 
                                 6 months    6 months   to ended 
                                    ended       ended         31 
                                  30 June          30   December 
                                     2016   June 2015       2015 
                                  GBP'000     GBP'000    GBP'000 
 
(Loss)/profit for the year 
 attributable to the owners 
 of the company                   (2,436)       1,617      3,020 
 
Adjustments to basic earnings 
Intangible assets amortisation        172         172        345 
Tax on intangible asset 
 amortisation                        (34)        (36)       (69) 
Impairment                          3,152           -          - 
Share based payment charge            272         144        193 
Deferred tax (credit) on 
 share based payment                 (54)        (30)       (39) 
Restructuring items                     -         153        118 
Tax on restructuring items              -        (32)       (24) 
Fees related to acquisition 
 of ECOM Recruitment Limited            -           -         21 
Redundancy and loss of 
 office costs                          34           -        219 
Tax on loss of office costs           (7)           -       (44) 
Fees related to acquisition 
 of non-controlling interest 
 in subsidiary                          -          20          - 
Tax on acquisition fees                 -         (4)          - 
 
Adjusted earnings                   1,099       2,004      3,740 
 
 
 
Notes to the unaudited condensed consolidated 
 interim report 
 
  6 Earnings per share (continued) 
Number of shares 
Weighted average number 
 of ordinary shares for 
 the purposes of basic earnings 
 per share                           36,204,457  34,732,097  35,635,968 
 
Weighted average number 
 of ordinary shares for 
 the purposes of diluted 
 earnings per share                  37,213,139  36,410,815  36,995,389 
 
Earnings per share                        Pence       Pence       Pence 
Basic (loss)/earnings per 
 share                                    (6.7)         4.7         8.5 
Diluted earnings per share                (6.5)         4.4         8.2 
 
Adjusted earnings per share 
Basic (loss)/earnings per 
 share                                      3.0         5.7        10.5 
Diluted earnings per share                  3.0         5.5        10.1 
 
   7              Impairment of goodwill 

On 26 November 2013, the Group acquired 100% of the share capital of ECOM Recruitment Limited ("ECOM"), the UK's leading digital technology recruitment business for a total consideration of up to GBP7.04 million.

At 30 June 2016 the Board conducted a review of the carrying value of the intangibles and goodwill associated with the business of ECOM and as a result of that review the goodwill has been impaired by GBP3,152k which has been treated as a non-recurring item in the period. The carrying value of the goodwill at 30 June 2016 is GBP1,710k.

   8              Subsequent events 

On 3 August the Group acquired 78% of the share capital of RDW-RD Limited ("RDW"), a boutique executive search firm for blue chip clients, with the right to acquire the remainder of the shares in RDW.

The wholly owned subsidiaries of RDW, Rees Draper Wright Limited and Rees Draper Wright Inc operate from offices in London and New York.

The total consideration agreed was:

 
                         GBP'000 
Cash                       1,273 
Issue of new shares in 
 InterQuest Group Plc        546 
Deferred consideration       381 
Total                      2,200 
 

As part of the total consideration, InterQuest issued 728,000 new ordinary shares to the vendors on completion. The outstanding interests in RDW are subject to put and call arrangements with the vendors, which can be exercised up to 18 October 2016 on the same terms. Assuming that this option is exercised, a further 205,333 new ordinary shares will be issued in due course.

   9              Interim report 

This report will also be available from the Company's registered office and on Company's website www.interquestgroup.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LELLBQKFLBBB

(END) Dow Jones Newswires

September 06, 2016 02:01 ET (06:01 GMT)

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