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Share Name Share Symbol Market Type Share ISIN Share Description
Nakama Group Plc LSE:NAK London Ordinary Share GB0004251970 ORD 0.01P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 1.00p 0.90p 1.10p - - - 0 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 16.8 -1.5 -1.3 - 1.00

Nakama Group Plc Unaudited Interim Results and Board Appointment

20/11/2018 7:00am

UK Regulatory (RNS & others)


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RNS Number : 8244H

Nakama Group Plc

20 November 2018

20 November 2018

Nakama Group plc

("Nakama" or the "Group")

UNAUDITED HALF YEAR RESULTS AND BOARD APPOINTMENT

Nakama Group plc (AIM: NAK), the AIM quoted recruitment consultancy working across UK, Europe and Asia, providing recruitment services for the web, interactive, digital media, IT and business change sectors, announces its half year report for the six months ended 30 September 2018.

Highlights

   --     Progress made towards long term profitability and focus on core markets 
   --     Net fee income ("NFI") of GBP2.7 million (2017: GBP2.7 million) 
   --     Permanent placement revenue remained flat at GBP1.7 million (2017: GBP1.7 million) 
   --     Contractor revenue reduced slightly to GBP6.3 million (2017: GBP6.5 million) 
   --     Overall headcount reduced by 23% to 57, improving the cost base 
   --     H1 Group performance was a significant improvement on H1 2017 
   --     Profit before tax of GBP186,000 (2017: loss of GBP437,000) 

Andrea Williams, CEO of Nakama Group, commented:

"As the first phase of our turnaround plan starts to bear fruit, we are very pleased with the results of the first half of this financial year. As we have committed to focusing our efforts on core markets, we have had to implement changes across most of our business units, early results are promising.

"Whilst the NFI has not seen any significant changes from the same period last year we have created a more focused and lean operation and are pleased to show a return to profitability in H1 2018. Having posted a loss before tax of GBP437,000 in H1 2017, I am pleased with the improvement seen this year to date.

"Overall headcount has decreased and whilst we expect this to reduce further in the short term, as we move into the next phases of our turn-around plan, we expect to see headcount increase as we progress through H2 and into the next financial year.

"This is a positive start to our turn-around plan and I would like to thank all my colleagues for their hard work and commitment to the business. I would also like to thank our candidates and clients for their continued support across our key markets and to our supportive shareholders."

 
 
   Enquiries: 
 
   Nakama Group plc                    www.nakamaglobal.com 
 Andrea Williams, CEO                  00 44 75 2559 5100 
 Tim Sheffield, Chairman               00 44 20 7236 2400 
 
 Allenby Capital Limited (Nominated 
  Adviser & Broker)                    www.allenbycapital.com 
 Nick Naylor / Nicholas Chambers       00 44 20 3328 5656 
 

About Nakama Group plc:

Nakama Group plc (AIM: NAK) is a recruitment consultancy which places people into specialist and management positions in the digital, data, creative, media, marketing and technology disciplines with offices in the UK and Asia. The UK also specialises in the insurance and wealth management sectors, specifically in business change and IT, through the brand Highams Recruitment.

The Group's speciality is finding excellent career opportunities and assignments for digital, IT, business change and professional services talent. The team at Nakama seek to develop their relationships and networks to ensure the Group obtains the best available positions for such talent, whilst ensuring that the skills and personalities of its staff are compatible with the needs of its clients.

Notes to Editors:

Nakama Group plc is a recruitment group of two branded solutions placing people into specialist and management positions;

-- Nakama operates in the digital, creative, media, marketing and technology sectors all over the world from offices in the UK and Asia.

-- The Highams brand specialises in the Financial Services sector, specifically Business Change and IT in Insurance and Wealth Management currently in the UK and Europe.

Nakama Group plc was created in October 2011 through the acquisition of Nakama Ltd UK and its subsidiaries in Hong Kong, Singapore and Sydney by AIM listed Highams Systems Services Group plc.

CEO Review

I present the unaudited results of Nakama Group plc for the first six months to 30 September 2018. Group revenue for the first six months of the year was GBP8.0 million (2017: GBP8.3 million) and profit before tax was GBP186,000 compared with a loss before tax of GBP437,000 for the same period in 2017.

The results of the first six months of this financial year demonstrate the positive impact of the changes being made across the group. We aim to continue on this journey in order to create a more balanced Group showing profitable reporting periods in each business unit.

Difficult decisions have had to be made during this reporting period and it was announced in the Annual Report that we will be focusing on core markets where we believe we can gain maximum impact in the shortest amount of time. As part of this, we reported the closure of the Melbourne office and subsequently have made the decision to cease trading in Sydney also. This gives us far more focus and clarity on the markets where we have been able to realise most gain since the start of this financial year.

The Hong Kong business has performed well to date and we look forward to supporting its growth as we progress through the second half of the financial year and into the next financial year. The Singapore office has performed solidly too, with further support and further opportunities for growth, we expect these results to continue to improve.

In the UK, the London Nakama business unit has been through some significant change and we are pleased that we have secured a new leader for this team. Contracting revenues are strong in London and we expect revenues generated through permanent recruitment activities to increase. The Highams business continues to deliver positive results and again, we look forward to implementing new growth strategies for this business unit where its longevity and consistency has been an important part of the overall results of the Group.

Outlook

It is expected that the cost-cutting activities completed in the first half will continue to deliver better returns and we are now focused on 'owning' the markets in which we operate. To achieve this, we must continue to be focused and highly specialised in our competitive markets, in addition to driving revenue per head figures in each location to improve overall cashflow. This will create a strong platform for us to move into our growth phase where we will be able to support an increase in headcount in each business unit and to deliver more consistent profitable results to shareholders.

Overall, I am pleased with the progress made to date, however, I am conscious that we are only part way through this business improvement strategy. We are already monitoring revenues per head in each location and are seeing some pleasing early results. I look forward to the second half of this financial year as I believe we have a strong team in place to deliver the results we have set out to achieve. I would like to thank everybody involved for their efforts and continued support.

Board updates

On 26 July 2018, we announced that Michael Clelland was appointed to the Board as Non-Executive Director. Michael's international and financial background is already proving to be of great value to the Board.

Additionally, we are today pleased to announce the appointment of Patrick Meehan, ACCA, to the board as Finance Director. Patrick is an experienced finance director who has worked both inside and outside the recruitment industry. He is currently the finance director of Sheffield Hawarth Limited ("Sheffield Haworth") and previously worked in the finance team at an AIM company. Following the detailed review of the Group's finance function, Patrick has been serving as interim finance director on a part-time basis and has been working closely with the board in driving the cost saving programme. The Board have now taken the decision to appoint Patrick to the Board. Patrick's services will continue to be supplied to Nakama by Sheffield Haworth pursuant to the secondment agreement on a part-time basis.

Andrea Williams, CEO of Nakama, said: "I am delighted that Patrick is joining the board. He has been instrumental in developing and delivering our cost saving programme and I look forward to working with him in the coming years as we grow Nakama's business."

Regulatory Disclosures

In accordance with Rule 17 and Schedule 2(g) of the AIM Rules for Companies, Patrick Thomas Meehan, aged 37, is, or has been within the last five years, a director or partner in the following companies and partnerships:

 
 Current directorships and partnerships   Past directorships and partnerships 
                                           held within the last five years 
 Gillespie Morrison Holdings              n/a 
  Limited 
 Gillespie Morrison Limited 
 SH Support Services Limited 
 

There is no other information required to be disclosed under the AIM Rules for Companies.

Andrea Williams

Chief Executive Officer

 
 
 
   CONSOLIDATED STATEMENT OF COMPREHENSIVE 
   INCOME 
 For the six months to 30 September                6 Months      6 Months 
  2018                                                   to            to 
                                                30 Sep 2018   30 Sep 2017 
 
                                                    GBP'000       GBP'000 
 
 Revenue                                              8,031         8,255 
 Cost of sales                                      (5,366)       (5,538) 
                                               ------------  ------------ 
 Net Fee Income                                       2,665         2,717 
                                               ------------  ------------ 
                                                      33.2%         32.9% 
 Administrative cost                                (2,454)       (3,135) 
                                               ------------  ------------ 
 Operating profit /(loss)                               211         (418) 
 Finance costs                                         (25)          (19) 
 Profit/(loss) on ordinary 
  activities before taxation                            186         (437) 
                                               ------------  ------------ 
 Tax expense/credit                                       -             - 
                                               ------------  ------------ 
 Profit for the period attributable 
  to equity shareholders                                186         (437) 
                                               ============  ============ 
 
 Profit per share 
 Basic and diluted profit per 
  share from continuing operations                    0.16p       (0.36)p 
 
 
 CONSOLIDATED STATEMENT OF RECOGNISED            6 Months      6 Months 
  INCOME AND EXPENSE                                   to            to 
 For the six months to 30 September 
  2018                                        30 Sep 2018   30 Sep 2017 
 
                                                  GBP'000       GBP'000 
                                             ------------  ------------ 
 Profit/(loss) for the period                         162         (437) 
 Foreign currency translation difference               24         (107) 
                                             ------------  ------------ 
 Total recognised income and expense 
  for the period attributable to equity 
  shareholders                                        186         (544) 
                                             ------------  ------------ 
 
 
 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 As at 30 September 2018 
 
                                                                        Employee   Currency 
                                                                           share    reserve 
                                                     Share     Merger    benefit               Retained 
                                  Share capital    premium    reserve    reserve               earnings   Total equity 
                                        GBP'000    GBP'000    GBP'000    GBP'000    GBP'000     GBP'000        GBP'000 
 
 At 1 April 2017                          1,602      2,580         90       (61)         26     (2,823)          1,414 
-------------------------------  --------------  ---------  ---------  ---------  ---------  ----------  ------------- 
 
 Loss for the year                                                                              (1,514)        (1,514) 
 Other comprehensive Loss                                                              (39)                       (39) 
 Total Comprehensive loss for 
  the year                                                                             (39)     (1,514)        (1,553) 
-------------------------------  --------------  ---------  ---------  ---------  ---------  ----------  ------------- 
 
 At 1 April 2018                          1,602      2,580         90       (61)       (13)     (4,337)          (139) 
-------------------------------  --------------  ---------  ---------  ---------  ---------  ----------  ------------- 
 
 Profit for the 6 months                                                                            186            186 
 Other comprehensive Income                                                              56                         56 
 Total Comprehensive profit for 
  the 6 months                                                                           56         186            242 
-------------------------------  --------------  ---------  ---------  ---------  ---------  ----------  ------------- 
 At 30 September 2018                     1,602      2,580         90       (61)         43     (4,151)            103 
-------------------------------  --------------  ---------  ---------  ---------  ---------  ----------  ------------- 
 
 
 CONSOLIDATED BALANCE SHEET 
 As at 30 September 2018 
                                                           6 months 
                                          6 months to            to 
                                         30 Sept 2018   30 Sep 2017 
 
 
                                              GBP'000       GBP'000 
 Assets 
 Non-current Assets 
 Property, plant and equipment                     19            62 
 Goodwill                                                       487 
 Deferred Tax asset                                56            85 
--------------------------------------  -------------  ------------ 
 Total                                             75           634 
 
 Current assets 
 Trade and other receivables                    2,387         2,816 
 Cash and cash equivalents                        183           236 
 
 Total                                          2,570         3,052 
--------------------------------------  -------------  ------------ 
 Total assets                                   2,645         3,686 
--------------------------------------  -------------  ------------ 
 
 Liabilities 
 Current Liabilities 
 Trade and other payables                     (1,871)       (1,816) 
 Borrowings                                     (671)       (1,000) 
 Total                                        (2,542)       (2,816) 
--------------------------------------  -------------  ------------ 
 Net assets/(liabilities)                         103           870 
--------------------------------------  -------------  ------------ 
 
 
 Equity 
 Ordinary shares                                1,602         1,602 
 Share premium                                  2,580         2,580 
 Merger reserve                                    90            90 
 Employee share benefit trust reserve            (61)          (61) 
 Currency reserve                                  56          (81) 
 Retained earnings                            (4,164)       (3,260) 
-------------------------------------- 
 Total equity                                     103           870 
--------------------------------------  -------------  ------------ 
 
 
 CONSOLIDATED STATEMENT OF CASH FLOWS 
 For the six months to                                         6 months         6 months 
  30 September 2018                                                  to               to 
                                                                 30 Sep          30 Sept 
                                                                   2018             2017 
 
                                                                GBP'000          GBP'000 
 
 Cash flows from operating 
  activities 
 Profit/(loss) before 
  taxation                                                          186            (437) 
 Depreciation of property, plant 
  and equipment                                                      18               33 
 Impairment and amortisation of 
  intangible assets                                                   -               37 
 Net finance costs                                                   25               19 
 Decrease in trade and other 
  receivables                                                       483            1,068 
 Decrease in trade and other payables                             (154)            (137) 
 Net cash generated by operating 
  activities                                                        558              583 
------------------------------------------    ------      -------------      ----------- 
 Cash flows from investing 
  activities 
 Purchase of property plant 
  and equipment                                                       -              (9) 
 Net cash outflow from investing 
  activities                                                          -              (9) 
------------------------------------------    ------                         ----------- 
 Financing activities 
 Decrease in borrowings                                           (546)            (471) 
 Finance cost paid                                                 (25)             (19) 
---------------------------------------       ------      -------------      ----------- 
 Net cash outflow from financing 
  activities                                                      (571)            (490) 
------------------------------------------    ------      -------------      ----------- 
 
 Net changes in cash and cash 
  equivalents                                                      (13)               84 
 Cash and cash equivalents, beginning 
  of year                                                           141              259 
 Effect of foreign exchange 
  rate movements                                                     55            (107) 
-----------------------------------------     ------      -------------      ----------- 
 Cash and cash equivalents at end 
  of period                                                         183              236 
------------------------------------------    ------      -------------      ----------- 
 
 

Notes to the Interim Report

1. Basis of Preparation

This unaudited consolidated interim financial information has been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements ("FRS100") and Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101"). It does not constitute the Group's statutory financial statements for those periods. The principal accounting policies used in preparing the interim results are those the Group expects to apply in its financial statements for the year ending 31 March 2019. The comparative financial information for the half year ended 30 September 2017 has not been audited. A copy of the full year audited statutory financial statements for the year ending 31 March 2018 has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-498(3) of the

Companies Act 2006.

The financial information in the Interim Report is presented in Sterling and all values are rounded to the nearest thousand pounds (GBP'000) except when otherwise indicated.

2. Loss per share

 
                              6 months                        6 months 
                                 to 30                           to 30 
                                   Sep                             Sep 
                                  2018                            2017 
                              Weighted                        Weighted 
                               average                         Average 
                                number                          number 
                                    of   Earnings                   of            Loss 
                                              per 
                     Profit     shares      share      Loss     shares       per share 
                    GBP'000    GBP'000          p   GBP'000       '000               p 
 
 Basic and 
  diluted 
  earnings/(loss) 
  per share             186    117,791       0.16     (437)    117,791          (0.36) 
 
 

3. Segmental Analysis

The Group has two main reportable segments based on the location from which revenue is derived:

Asia Pacific - This segment includes Hong Kong and Singapore.

UK - The UK Segment includes candidates placed in the UK.

The Group has discontinued operation in the USA in the year ending 31 March 2018.

The Group has also discontinued operation in Australia in the current financial year.

These segments are monitored by the Board of Directors.

Factors that management used to identify the Group's reportable segments

The Group's reportable segments are strategic business units that, although supplying very similar service offering, operate in distinct markets and are therefore managed on a day to day basis by separate teams.

Measurement of operating segment profit or loss, assets and liabilities

The Group evaluates performance on the basis of profit or loss from operations before tax, head office costs and amortisation.

The Board does not review assets and liabilities by segment.

 
                                       Asia Pacific        UK       USA        Total 
                                             30 Sep    30 Sep    30 Sep 
                                                 18        18        18     30 Sep18 
                                            GBP'000   GBP'000   GBP'000      GBP'000 
 
  Revenue from external customers             2,239     5,792         -        8,031 
                                      -------------  -------- 
 
   Segment loss before tax                      190        37         -          227 
                                      -------------  --------  --------  ----------- 
 
 
 
                                       Asia Pacific        UK       USA        Total 
                                            30 Sept   30 Sept   30 Sept 
                                                 17        17        17   30 Sept 17 
                                            GBP'000   GBP'000   GBP'000      GBP'000 
 
  Revenue from external customers             3,055     5,196         4        8,255 
                                      -------------  -------- 
 
   Segment profit/(loss) before tax           (257)      (28)      (32)        (317) 
                                      -------------  --------  --------  ----------- 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR FFFFWUFASELF

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November 20, 2018 02:00 ET (07:00 GMT)

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