Interim Statement

 

TIDMCPS 
 
RNS Number : 2292G 
CPL Resources PLC 
28 January 2010 
 
Cpl RESOURCES plc 
Results for the Half Year Ended 31 December 2009 
 
 
Cpl Resources plc, Ireland's leading employment services group, today announced 
results for the half year ended 31st December 2009. 
 
 
Financial results 
 
 
+----------------------------------------+--------------------+---------------------+ 
|                                        |    Half Year ended |     Half Year ended | 
+----------------------------------------+--------------------+---------------------+ 
|                                        |          31-Dec-09 |           31-Dec-08 | 
+----------------------------------------+--------------------+---------------------+ 
| Operating highlights                   |              EUR000 |               EUR000 | 
+----------------------------------------+--------------------+---------------------+ 
|                                        |       ( Unaudited) |        ( Unaudited) | 
+----------------------------------------+--------------------+---------------------+ 
|                                        |                    |                     | 
+----------------------------------------+--------------------+---------------------+ 
| Revenue                                |             91,378 |             118,945 | 
+----------------------------------------+--------------------+---------------------+ 
| Gross profit                           |             12,958 |              20,517 | 
+----------------------------------------+--------------------+---------------------+ 
| Profit before tax and Impairment       |              2,374 |               6,022 | 
+----------------------------------------+--------------------+---------------------+ 
| Goodwill Impairment                    |                    |             (4,500) | 
+----------------------------------------+--------------------+---------------------+ 
| Profit Before tax                      |              2,374 |               1,522 | 
+----------------------------------------+--------------------+---------------------+ 
| EPS                                    |          11.0 cent |            2.0 cent | 
+----------------------------------------+--------------------+---------------------+ 
 
 
 
The markets in which we operate remain difficult and employment trends continue 
to present challenges. Nevertheless, the Group is pleased to report profits 
before tax of EUR2.37 million for the six months ended 31 December 2009. 
In the six months to 31 December 2009 Group Gross Profit fell by 37% when 
measured against the same period last year. This change reflects the continuing 
weakness of the Irish economy.  The Group's net fee income for the six months to 
December 2009 is 10% lower than the six months to June 2009. 
Net fee income from our permanent placement business decreased by 58% when 
compared to the corresponding period last year. However, permanent fees 
generated in the six months to December 2009 were only 15% lower than the six 
months to June 2009. Net fee income in our temporary placement business has been 
more resilient to date across most of the Group. Unfortunately the pricing 
environment in the temporary placement business has become more challenging. 
This has resulted in a 26% decline in gross profit from this sector of our 
business compared with the same period last year. We are however beginning to 
see an increase in demand for temporary staff, and net fee income in our 
temporary business in the six months to December 2009 was similar to that 
generated in the six months to June 2009. 
The Group had cash balances of EUR42 million at 31 December 2009. The business 
generated EUR1.7 million from operating activities in the six months to December 
2009, while EUR1.3 million was spent on acquisitions in the same period. We 
continue to manage our debtor book actively and carefully, and we have not 
experienced any significant increase in bad debts. 
In line with our stated strategy to increase the range of services we offer to 
our customers, we acquired three businesses in the six months to December 2009. 
Loss Control Services Limited (trading as Nifast) is one of Ireland's leading 
providers of training and consultancy in all aspects of Health & Safety. 
Established 22 years ago, Nifast assists companies in reducing the risks of 
accidents in the workplace and in managing their compliance with their statutory 
duties as employers. Ecom Interaction Services Limited is a business process 
outsourcing company for customer contact management, outsourced insurance 
administration and back-office processes. It has a blue chip customer base in 
the finance, technology and commercial sectors. Techstaff International Limited 
is a construction contractor business. Cpl continues to look for suitable 
acquisition opportunities which will enhance our service offering to customers 
and improve the breadth and geographic balance of our business. 
 
 
Our goal is to consistently remain profitable regardless of the economic 
circumstances. Our team has demonstrated their commitment to delivering a value 
based strategy. For this I thank them. Our sales force and delivery teams remain 
committed to providing our customers with innovative and flexible solutions to 
meet their business needs in a constantly changing environment. We value our 
customers and I would also like to thank them for their continued support. 
 
 
 
 
 
 
Outlook 
 
 
The markets in which Cpl operates remain challenging, and the economic outlook 
remains uncertain in Ireland and in our other locations. In these conditions we 
are continuing to manage our cost base carefully, to provide excellent service 
to our clients and to pursue opportunities to add to our business as they arise. 
We do not anticipate any significant expansion or retraction in demand for our 
services in the short term. We note, however, that some commentators are 
forecasting a return to economic growth in Ireland towards the end of 2010, and 
we remain well positioned to take advantage of any upturn in the market as and 
when it occurs. 
 
 
 
 
 
 
The Board is recommending an interim dividend of 1.5 cent per share. The 
dividend will be payable on 5th March 2010 to shareholders on the company's 
register at the close of business on the record date of 5th  February 2010. 
 
 
 John Hennessy 
 
+--------------------------------+ 
| Group income statement         | 
+--------------------------------+ 
| for the period ended 31st      | 
| December 2009                  | 
+--------------------------------+ 
 
 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                | Half Year ended |      Half Year |  Year ended  | 
|                                |                 |          ended |              | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |     31 Dec 2009 |    31 Dec 2008 |  30 Jun 2009 | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |           EUR'000 |          EUR'000 |        EUR'000 | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |    ( Unaudited) |   ( Unaudited) |    (Audited) | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Revenue                        |          91,378 |        118,945 |      212,398 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Cost of sales                  |        (78,420) |       (98,428) |    (177,410) | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Gross profit                   |          12,958 |         20,517 |       34,988 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Distribution expenses          |           (762) |          (982) |      (1,575) | 
+--------------------------------+-----------------+----------------+--------------+ 
| Administrative expenses before |        (10,514) |       (14,344) |     (25,209) | 
| impairment charge              |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Operating profit before        |           1,682 |          5,191 |        8,204 | 
| impairment charge              |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Impairment                     |               - |        (4,500) |      (8,061) | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Operating profit               |           1,682 |            691 |          143 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Financial income               |             694 |            832 |        1,552 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Financial expenses             |             (2) |            (1) |         (12) | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Profit before tax              |           2,374 |          1,522 |        1,683 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Income tax expense             |           (309) |          (783) |      (1,002) | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Profit for the Financial Year  |           2,065 |            739 |          681 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Attributable to:               |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Equity Shareholders            |           2,054 |            697 |          639 | 
+--------------------------------+-----------------+----------------+--------------+ 
| Minority interest              |              11 |             42 |           42 | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |           2,065 |            739 |          681 | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Basic earnings per share       |       11.0 cent |       2.0 cent |     1.7 cent | 
+--------------------------------+-----------------+----------------+--------------+ 
|                                |                 |                |              | 
+--------------------------------+-----------------+----------------+--------------+ 
| Diluted earnings per share     |       11.0 cent |       2.0 cent |     1.7 cent | 
+--------------------------------+-----------------+----------------+--------------+ 
  Consolidated Balance Sheet 
@ 31 December 2009 
+--------------------------------+----------------+----------------+---------------+ 
|                                |    31 Dec 2009 |    31 Dec 2008 |   30 Jun 2009 | 
+                                +----------------+----------------+---------------+ 
|                                |                          EUR'000 |          EUR'000 |          EUR'000 | 
+--------------------------------+--------------------------------+----------------+----------------+ 
|                                |   ( Unaudited) |   ( Unaudited) |    ( Audited) | 
+--------------------------------+----------------+----------------+---------------+ 
| Assets                         |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Non-current assets             |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Property, plant and equipment  |          1,426 |          1,436 |         1,444 | 
+--------------------------------+----------------+----------------+---------------+ 
| Goodwill and Intangible assets |         10,668 |         13,875 |         9,979 | 
+--------------------------------+----------------+----------------+---------------+ 
| Deferred tax asset             |            229 |             93 |           263 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total non-current assets       |         12,323 |         15,404 |        11,686 | 
+--------------------------------+----------------+----------------+---------------+ 
|                                |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Current assets                 |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Trade and other receivables    |         29,666 |         34,387 |        29,424 | 
+--------------------------------+----------------+----------------+---------------+ 
| Cash and cash equivalents      |         16,531 |         36,437 |        22,505 | 
+--------------------------------+----------------+----------------+---------------+ 
| Short-term bank deposits       |         25,535 |              - |        19,995 | 
+--------------------------------+----------------+----------------+---------------+ 
| Corporation tax refundable     |            135 |              - |           409 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total current assets           |         71,867 |         70,824 |        72,333 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total assets                   |         84,190 |         86,228 |        84,019 | 
+--------------------------------+----------------+----------------+---------------+ 
|                                |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Equity                         |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Issued capital                 |          3,720 |          3,720 |         3,720 | 
+--------------------------------+----------------+----------------+---------------+ 
| Share premium                  |          1,705 |          1,705 |         1,705 | 
+--------------------------------+----------------+----------------+---------------+ 
| Merger reserve                 |        (3,300) |        (3,300) |       (3,300) | 
+--------------------------------+----------------+----------------+---------------+ 
| Retained earnings              |         58,956 |         58,075 |        57,460 | 
+--------------------------------+----------------+----------------+---------------+ 
|                                |         61,081 |         60,200 |        59,585 | 
+--------------------------------+----------------+----------------+---------------+ 
| Minority Interest              |            109 |             98 |            98 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total equity                   |         61,190 |         60,298 |        59,683 | 
+--------------------------------+----------------+----------------+---------------+ 
| Liabilities                    |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Non-current liabilities        |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Financial liabilities          |             68 |             56 |            81 | 
+--------------------------------+----------------+----------------+---------------+ 
| Provisions                     |              - |            268 |             - | 
+--------------------------------+----------------+----------------+---------------+ 
| Total non-current liabilities  |             68 |            324 |            81 | 
+--------------------------------+----------------+----------------+---------------+ 
| Current liabilities            |                |                |               | 
+--------------------------------+----------------+----------------+---------------+ 
| Financial liabilities          |             32 |             21 |            34 | 
+--------------------------------+----------------+----------------+---------------+ 
| Trade and other payables       |         22,870 |         24,401 |        23,814 | 
+--------------------------------+----------------+----------------+---------------+ 
| Corporation tax payable        |              - |            941 |             - | 
+--------------------------------+----------------+----------------+---------------+ 
| Provisions                     |             30 |            243 |           407 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total current liabilities      |         22,932 |         25,606 |        24,255 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total liabilities              |         23,000 |         25,930 |        24,336 | 
+--------------------------------+----------------+----------------+---------------+ 
| Total equity and liabilities   |         84,190 |         86,228 |        84,019 | 
+--------------------------------+----------------+----------------+---------------+ 
 
 
 
+--------------------------------------------+ 
| Group Cash Flow statements                 | 
+--------------------------------------------+ 
| for the period ended 31st December 2009    | 
+--------------------------------------------+ 
 
 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            |    Half Year |   Half Year | Year ended  | 
|                                            |        ended |       ended |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            |  31 Dec 2009 | 31 Dec 2008 | 30 Jun 2009 | 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            |        EUR'000 |       EUR'000 |       EUR'000 | 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            | ( Unaudited) |           ( |  ( Audited) | 
|                                            |              |  Unaudited) |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Cash flows from operating activities       |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Profit for the financial year              |        2,066 |         739 |         681 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Adjustments for:                           |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Depreciation on property, plant and        |          287 |         274 |         437 | 
| equipment                                  |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Amortisation of Intangible assets          |           83 |         138 |         409 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Deferred Consideration write back          |        (317) |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Financial income                           |        (694) |       (832) |     (1,552) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Financial expense                          |            2 |           1 |          12 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Impairment of Goodwill                     |   -          |   4,500     |       7,157 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Impairment of Intangible assets            |   -          |   -         |         904 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Income tax expense                         |          309 |         783 |       1,002 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Operating profit before changes in working |              |             |             | 
|                                            |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| capital and provisions                     |        1,736 |       5,603 |       9,050 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Decrease/(Increase) in trade and           |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| other receivables                          |          483 |         698 |       6,459 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| (Decrease)/Increase in trade and other     |        (979) |     (4,576) |     (5,017) | 
| payables and provisions                    |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Cash generated from operations             |        1,240 |       1,725 |      10,492 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Interest paid                              |          (2) |         (1) |        (12) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Income tax refund/(paid)                   |   -          |        (28) |     (1,852) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Interest received                          |          495 |         666 |       1,405 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Net cash from operating activities         |        1,733 |       2,362 |      10,033 | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Cash flows from investing activities       |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Acquisition of subsidiary, net of cash     |      (1,198) |   -         |       (760) | 
| acquired                                   |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Deferred consideration paid                |        (127) |     (2,361) |     (2,416) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Purchase of property, plant and equipment  |        (199) |       (170) |       (340) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Purchase of intangible assets              |         (70) |   -         |        (75) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Purchase of investments                    |      (5,540) |   -         |    (19,995) | 
| Transfer to short-term deposits            |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Net cash used in investing activities      |      (7,134) |     (2,531) |    (23,586) | 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Cash flows from financing activities       |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Repayment of borrowings                    |         (15) |        (10) |           - | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Dividends paid                             |        (558) |       (930) |     (1,488) | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Proceeds from issue of share capital       |   -          |   -         |           - | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Net cash from financing activities         |        (573) |       (940) |     (1,488) | 
+--------------------------------------------+--------------+-------------+-------------+ 
|                                            |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Net increase/(decrease) in cash and cash   |      (5,974) |     (1,109) |    (15,041) | 
| equivalents                                |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Cash and cash equivalents at beginning of  |       22,505 |      37,546 |      37,546 | 
| period / year                              |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
| Cash and cash equivalents at end of period |       16,531 |      36,437 |      22,505 | 
| / year                                     |              |             |             | 
+--------------------------------------------+--------------+-------------+-------------+ 
  Notes supporting interim financial statements 
 
 
1. Basis of preparation 
 
 
The consolidated financial information of the Group has been prepared in 
accordance with the recognition and measurement principles of International 
Financial Reporting Standards (IFRS), including interpretations issued by the 
International Accounting Standards Board ("IASB") and its committees and adopted 
by the EU. 
 
 
The figures for the half year ended 31 December 2009 are unaudited. The 
comparative figures for the half year ended 31 December 2008 are also unaudited. 
The amounts for the year ended 30 June 2009 represent an abbreviated version of 
the Group's full financial statements for the year on which the auditors issued 
an unqualified audit report. 
 
 
The preparation of financial information in conformity with IFRS requires 
management to make judgements, estimates and assumptions that affect the 
application of policies and reported amounts of assets and liabilities, income 
and expenses. The estimates and associated assumptions are based on historical 
experience and various other factors that are believed to be reasonable under 
the circumstances, the results of which form the basis of making judgements 
about carrying values of assets and liabilities that are not readily apparent 
from other sources. 
 
 
 
 
2. Dividends to equity shareholders. 
 
 
+-------------------+-------------+-------------+-------------+ 
|                   |   Half Year |   Half Year |  Year ended | 
|                   |       ended |       ended |             | 
+-------------------+-------------+-------------+-------------+ 
|                   |      31 Dec |      31 Dec |     30 June | 
|                   |        2009 |        2008 |        2009 | 
+-------------------+-------------+-------------+-------------+ 
|                   |       EUR'000 |       EUR'000 |       EUR'000 | 
+-------------------+-------------+-------------+-------------+ 
| Ordinary          |             |             |             | 
| dividends:        |             |             |             | 
+-------------------+-------------+-------------+-------------+ 
| Interim dividends |           - |           - |         558 | 
| paid              |             |             |             | 
+-------------------+-------------+-------------+-------------+ 
| Final dividend    |         558 |         930 |         930 | 
| paid              |             |             |             | 
+-------------------+-------------+-------------+-------------+ 
|                   |         558 |         930 |       1,488 | 
+-------------------+-------------+-------------+-------------+ 
 
 
 
 
3. Earnings per ordinary share 
 
 
The earnings per ordinary share is calculated on the basis that the weighted 
average number of shares in issue for the half year ended 31 December 2009 is 
37,211,825 (period ended 31 December 2008 - 37,211,825; year ended 30 June 2009 
- 37,211,825). It has been calculated based on the profit for the financial 
period ended 31 December 2009 of EUR2,054,000 (period ended 31 December 2008 - 
EUR697,000; year ended 30 June 2009 - EUR639,000). 
 
 
 
 
4. Provisions 
+-------------------------------------------+------------+ 
| Deferred and contingent consideration     |      Group | 
+-------------------------------------------+------------+ 
|                                           |      EUR'000 | 
+-------------------------------------------+------------+ 
|                                           |            | 
+-------------------------------------------+------------+ 
| Balance at 30 June 2009                   |        407 | 
+-------------------------------------------+------------+ 
| Amount recognised during the year (note   |         67 | 
| 5)                                        |            | 
+-------------------------------------------+------------+ 
| Paid during the year                      |      (127) | 
+-------------------------------------------+------------+ 
| Revision to estimate during the year      |      (317) | 
+-------------------------------------------+------------+ 
| Balance at 31 December 2009               |         30 | 
+-------------------------------------------+------------+ 
| Current                                   |         30 | 
+-------------------------------------------+------------+ 
| Non-current                               |          - | 
+-------------------------------------------+------------+ 
|                                           |         30 | 
+-------------------------------------------+------------+ 
 
 
 
 
5. Acquisition of business undertakings 
In July 2009, the Group acquired the businesses and certain assets of Loss 
Control Services Limited (trading as Nifast) (in receivership), Ecom Interaction 
Services Limited (in receivership), and Techstaff International Limited.  The 
carrying value of the assets which were acquired, determined in accordance with 
IFRS at the acquisition dates was EUR.8 million. Total consideration amounted to 
EUR1.2 million. 
The initial assignment of fair values to identifiable net assets acquired has 
been performed on a provisional basis in respect of the above business 
combination. Any amendments to these fair values within the twelve month 
timeframe from the date of acquisition will be disclosable in the 2010 Annual 
Report as stipulated by IFRS 3, Business Combinations 
 
 
For Further Information: 
 Anne Heraty, CEO , CPL Resources, 01 6146000 
 Josephine Tierney, Finance Director, 01 6146000 
Ends 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 IR LLFFRLTIDFII