CPL Resources PLC Half Yearly Report (8442C)

TIDMCPS

RNS Number : 8442C

CPL Resources PLC

25 January 2018

Cpl Resources Plc

Results for the six months ended 31 December 2017

CPL delivers double-digit growth in revenue, gross profit and earnings and

returns EUR25m to shareholders in the first half of financial year 2018

Cpl Resources Plc ("Cpl" or the "Group"), Ireland's leading employment services group, today announced results for the half year ended 31 December 2017.

Chairman's Statement

I am pleased to report that in the six months to 31 December 2017 the Group delivered continued growth in revenues, net fee income and profits.

Half year highlights

   --      12% increase in revenues to EUR256.7 million 
   --      12% increase in gross profit (net fee income) to EUR40.5 million 
   --      Profit before tax of EUR9.0 million, an 11% increase 
   --      Earnings per share increased 15% to 26.4 cent 
   --      10% increase in interim dividend to 6.35 cent per share 
 
 Half year highlights          Half year   Half year   % change 
                                   ended       ended 
  EUR000s except where         31-Dec-17   31-Dec-16 
   indicated 
----------------------------  ----------  ----------  --------- 
 
 Revenue                         256,714     228,717        12% 
 Gross Profit                     40,502      36,188        12% 
 Adjusted Operating profit*        9,343       8,971         4% 
 Adjusted Profit before 
  tax*                             9,666       8,979         8% 
 
 Operating profit                  8,684       8,088         7% 
 Profit before tax                 9,007       8,096        11% 
 Earnings per share            26.4 cent   23.0 cent        15% 
 Dividend per share            6.35 cent   5.75 cent        10% 
----------------------------  ----------  ----------  --------- 
 
 Conversion ratio ** 
 Adjusted Operating Profit         23.1%       24.8% 
 Adjusted Profit before 
  tax                              23.9%       24.8% 
 Operating Profit                  21.4%       22.3% 
 Profit before tax                 22.2%       22.4% 
----------------------------  ----------  ----------  --------- 
 
 Net fee income - permanent 
  placements                      13,037      13,279       (2%) 
 Net fee income - temporary 
  and contract                    27,465      22,909        20% 
----------------------------  ----------  ----------  --------- 
 
 Permanent net fee income 
  as a % 
 of total gross profit               32%         37% 
 Temporary and contract 
  net fee income as a % 
 of total gross profit               68%         63% 
----------------------------  ----------  ----------  --------- 
 

* Adjusted operating profit and adjusted profit before tax exclude non-cash charges relating to the Group's Long-Term Incentive Plan (LTIP) and currency translation

** As a % of gross profit

Revenues for the six months to 31 December 2017, which includes a full six months' trading contribution by RIG Healthcare Group ("RIG"), our recent UK acquisition, increased by 12% to EUR256.7 million. Our gross profit increased by 12% against the same period last year to EUR40.5 million. The Group's profit before tax was EUR9.0 million for the six months to 31 December 2017, an 11% increase on the same period last year. Our conversion rate of gross profit to operating profit (excluding non-cash foreign currency translations and LTIP charges) was 23.1% in the period.

The non-cash LTIP charge was EUR0.5 million in the six months to 31 December 2017 (2016: EUR0.4 million). The LTIP charge for the six months to 31 December 2017 reflects current expectations in relation to the achievement of performance targets included in the LTIP awards.

The Group delivered a 15% increase in earnings per share to 26.4 cent for the six months to 31 December 2017, positively impacted by the Tender Offer which completed during the period.

The Group continues to work with clients to understand their specific requirements and with our candidates in order to match their skills to those client requirements. The proportion of our net fee income that is made up of temporary fees has increased from 63% in the same period last year to 68%, driven primarily by RIG's revenue mix but also by organic growth across our sectors. This shift in our business model is reflective of a global move toward the "gig economy" and greater flexibility for client and candidate alike. We also improved the margin on our temporary business to 11.3% (2016: 10.6%).

We have invested significantly in our technology platform over the past few years and are delighted to be pioneering one of the first artificial intelligence tools in the recruitment sector. Cpl is committed to staying at the forefront of AI and machine learning technology in order to make the recruitment process faster and more efficient for the benefit of our candidates and clients.

We continue to grow and develop our people within the Group and on behalf of the Board I wish to express my gratitude for the continuing hard work and dedication of all of our people and for their commitment to the Group.

Tender Offer

During the six months ended 31 December 2017, the Group returned EUR25 million of surplus cash to its shareholders by way of a fixed price tender offer (the "Tender Offer"), considering this to be the most effective use of those shareholder funds. The Tender Offer was fully subscribed and successfully executed, with the Company repurchasing and cancelling 3,703,703 shares at a price of EUR6.75 per share, thereby reducing the issued share capital by approximately 12%.

Cash

The continued strength of our Balance Sheet reflects the positive cash-generating capability of Cpl. The Group has a net cash balance of EUR12.4 million as at 31 December 2017 (2016: EUR35.2 million). In the six months to 31 December 2017, EUR9.8 million was generated in cash flow from operating activities before tax and changes in working capital. Although our business requires significant investment in working capital, excluding the impact of the Tender Offer (EUR25.2 million) we recorded a net cash inflow of EUR3.9 million in the period (2016: EUR2.2 million). Together with available financing facilities, the Group remains adequately funded to pursue its stated growth objectives.

Dividend

The Board proposes to pay an interim dividend of 6.35 cent per share, an increase of 10% on last year's interim dividend, reflecting the Group's strong performance in the period. The interim dividend will be payable on 2 March 2018 to shareholders on the register at the close of business on the record date of 2 February 2018.

Outlook

As we move into the second half of our financial year we are closely monitoring activity levels in all of our markets. We remain conscious of the impact of political, regulatory and economic events globally on our business. Positive momentum in the Irish and Eurozone labour markets should position the Group well for further growth across its key business sectors.

We remain confident in the outlook for the business and expect to deliver continued profitable growth for the remainder of the financial year.

John Hennessy

Chairman

25 January 2018

Financial Statements

The financial statements for the six month period ending 31 December 2017 can be accessed below:

http://www.rns-pdf.londonstockexchange.com/rns/8442C_-2018-1-24.pdf

 
 For Further Information: 
 
 Cpl Resources plc                 [phone] 
 Anne Heraty (CEO) 
 Mark Buckley (Deputy CEO 
  & COO) 
 Lorna Conn (CFO) 
 
 Davy Corporate Finance (NOMAD, 
  ESM Adviser)                     [phone] 
 Ivan Murphy 
 Daragh O'Reilly 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR QZLFLVFFZBBD

(END) Dow Jones Newswires

January 25, 2018 02:00 ET (07:00 GMT)