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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Rtc Group Plc | LSE:RTC | London | Ordinary Share | GB0002920121 | 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% | 82.50 | 80.00 | 85.00 | 82.50 | 82.50 | 82.50 | 10,002 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Employment Agencies | 71.91M | -351k | -0.0240 | -34.38 | 12.08M |
From Apr 2019 to Apr 2024
TIDMRTC
RNS Number : 8037T
RTC Group PLC
23 July 2020
This announcement contains inside information as stipulated under The Market Abuse Regulation (EU No. 596/2014).
23 July 2020
RTC Group Plc
("RTC", "the Company" or "the Group")
Interim Results for the Six Months Ended 30 June 2020
RTC Group Plc (AIM: RTC.L), the engineering and technical recruitment Group, is pleased to announce its unaudited results for the six months ended 30 June 2020.
Summary:
-- Group revenue from continuing operations was GBP40m (2019: GBP46m); -- Profit from operations was GBP0.3m (2019: GBP0.8m); -- Net cash inflow from operating activities GBP4.3m (2019: GBP1.1m); -- Basic earnings per share 1.20p (2019: 3.86p)
No dividends were paid in the period (2019: GBP362,780). At this time, no interim dividend is proposed for the year ended 31 December 2020 (2019: GBP199,734).
Commenting on the results, Bill Douie, Chairman, said:
" I am particularly pleased to be able to report that our Group has managed to navigate its way successfully through an extraordinarily difficult six months and, despite an immediate drop in revenue across all our UK business streams due to the Covid-19 pandemic, we have managed to deliver a modest first half profit and a significantly improved cash position. Cash generation in the period has principally benefitted from reduced working capital requirements through a combination of reduced revenues, accelerated payment terms from a key supplier and taking advantage of the Coronavirus VAT deferral Scheme.
I believe our strategy of concentrating on supporting activities in public and regulated sectors (infrastructure and railway transportation) and providing contract workers vital to the country's long-term infrastructure development plans is proving sound during these very difficult times. I see it as encouraging for the future prospects of the Group.
I am very proud of all of our hard-working employees who have shown exemplary commitment and spirit during these extremely challenging times and I believe we enter a demanding second six months with undiluted strength and determination to the credit of all concerned.
Given the ongoing uncertainties surrounding the impact of the pandemic, a further update on trading will be provided towards the end of the year."
The interim report is available on the Company's website www.rtcgroupplc.co.uk .
SEnquiries:
RTC Group Plc Tel: 0133 286 1835 Bill Douie, Chairman, Andy Pendlebury, Chief Executive www.rtcgroupplc.co.uk SPARK Advisory Partners Limited (Nominated Tel: 0203 368 3550 Adviser) Matt Davis / James Keeshan www.Sparkadvisorypartners.com Whitman Howard Limited (Broker) Tel: 020 7659 1234 Nick Lovering www.Whitman-howard.com
About RTC
RTC Group Plc is an AIM listed business that focuses on white and blue-collar recruitment, providing temporary and permanent labour to a broad range of industries and customers in both domestic and international markets through its geographically defined operating divisions.
UK division
Through its Ganymede and ATA Recruitment brands the Group provides a wide range of recruitment services in the UK.
Ganymede specialise in recruiting technical and engineering talent and providing complete workforce solutions to help build and maintain infrastructure and transportation for a wide range of UK and international clients. Ganymede is a market leader in providing a diverse range of people solutions to the rail, energy, construction, highways and transportation sectors. With offices strategically located across the country, Ganymede provides its clients with the benefit of a national network of skilled personnel combined with local expertise.
ATA Recruitment provide technical recruitment solutions to the manufacturing, engineering and technology sectors. Working as an engineering recruitment partner supporting businesses across the UK. ATA Recruitment has a strong track record of attracting and recruiting engineering talent for our clients. ATA's regional offices which are strategically located in Leicester and Leeds each have dedicated market-experts to ensure ATA delivers excellence to both our clients and candidates.
International division
Through its GSS brand the Group works with customers across the globe that are focused on delivering projects in a variety of engineering sectors. GSS has a track record of delivery in some of the world's most hostile locations. Working closely with its customers GSS provides contract and permanent staffing solutions on an international basis, providing key personnel into new projects and supporting ongoing large-scale project staffing needs. GSS typically recruit across a range of disciplines and skills from operators and supervisors, through to senior management level.
The Group headquarters are located at the Derby Conference Centre which also provides office accommodation for its operating divisions in addition to generating rental and conferencing income from space not utilised by the Group.
Chairman's statement
Six months ended 30 June 2020
I am particularly pleased to be able to report that our Group has managed to navigate its way successfully through an extraordinarily difficult six months and, despite an immediate drop in revenue across all our UK business streams due to the Covid-19 pandemic, we have managed to deliver a modest first half profit and a significantly improved cash position. Cash generation in the period has principally benefitted from reduced working capital requirements through a combination of reduced revenues, accelerated payment terms from a key supplier and taking advantage of the Coronavirus VAT deferral Scheme.
I believe our strategy of concentrating on supporting activities in public and regulated sectors (infrastructure and railway transportation) and providing contract workers vital to the country's long-term infrastructure development plans is proving sound during these very difficult times. I see it as encouraging for the future prospects of the Group.
I am very proud of all of our hard-working employees who have shown exemplary commitment and spirit during these extremely challenging times and I believe we enter a demanding second six months with undiluted strength and determination to the credit of all concerned.
Given the ongoing uncertainties surrounding the impact of the pandemic, a further update on trading will be provided towards the end of the year.
W J C Douie
Chairman
23 July 2020
Finance Director's statement
Six months ended 30 June 2020
Highlights
Despite the impact of the Covid-19 pandemic ("the pandemic"), I am pleased to report that the Group delivered revenues of GBP40m (2019: GBP46m) and a profit from operations of GBP0.3m (2019: GBP0.8m) for the six months ended 30 June 2020.
Trading
Whilst trading in Q1 was largely unaffected by the pandemic, some disruption was experienced in Q2, with certain areas of the Group more significantly impacted than others. Revenue from contract placements was 89% of corresponding period levels at GBP38.7m and revenue from permanent placements and other revenue was 52% and 50% of corresponding period levels respectively.
Throughout Q2 we continued to provide contract workers to the UK infrastructure and railway transportation sectors but at reduced levels from Q1. General UK recruitment activities, permanent recruitment in particular, were significantly impacted by the lockdown. Smart-meter installation stopped, and our hotel and conference centre remained closed in line with Government guidance. Internationally our activities remained largely unaffected.
Towards the end of Q2 we began to see an increase in the number of contract workers required in the infrastructure and railway transportation sectors which is continuing in July. Some smart-meter installation activity recommenced in July, but general UK recruitment activities have remained significantly impacted by the pandemic, as has our hotel and conference centre.
Trading by segment
As outlined above, the impact of the pandemic on UK Recruitment was mixed. Overall, the segment delivered revenues of GBP31m (2019: GBP37m) which was converted to profit from operations of GBP1.2m (2019: 1.6m).
International Recruitment saw minimal impact of the pandemic and increased revenues to GBP8.3m (2019: GBP8.1m) reflecting a steady increase in the number of workers supplied to KBR its longstanding international partner. P rofit from operations was maintained at GBP0.5m (2019: GBP0.5m).
UK Central Services has been significantly impacted by the pandemic with the hotel and conference centre facilities at the Derby site closed from 23 March 2020 in line with Government guidance. It re-opened in July but at present Government guidance curtails conference and event activities. Revenue generated by the UK Central Services segment was GBP0.5m (2019: GBP0.9m) and gross profit was GBP0.2m (2019: GBP0.4m).
Taxation
The total tax charge for the period is estimated at GBP60,000 (2019: GBP158,000). This is higher than would be expected if the standard tax rate was applied to the profits for the period, as explained in note 3.
Earnings per share
The basic earnings per share figure is 1.20p (2019: 3.86p). The diluted earnings per share 1.07p (2019: 3.48p).
Dividends
No dividends were paid in the period (2019: GBP362,780). At this time, no interim dividend is proposed for the year ended 31 December 2020 (2019: GBP199,734).
Statement of financial position
The Group statement of financial position has strengthened compared to the same point last year with net working capital increasing to GBP4.3m (2019: GBP3.3m). There has been a significant reduction in debtors since the start of the period as monies have been collected and 2020 revenues reduced as a result of the Covid-19 pandemic. Further, the reduction in revenue, together with accelerated payment terms from a key client and use of the Coronavirus VAT deferral scheme has led to a corresponding reduction in the amount of invoice finance required to support the business. The Group has no term debt and is financed using its invoice discounting and overdraft facilities with HSBC. The ratio of current assets to current liabilities has also increased to 1.5 (2019: 1.3). Interest cover was 3.5 times (2019: 8.5 times).
Cash flow
The positive cash flow from operating activities of GBP4.3m (2019: GBP1.1m) for the six-month period reflects a reduction in debtors as a result of reduced revenues but also the payment profiles of the mix of clients we have been supporting during the period, with a key client paying on accelerated terms to support suppliers through the pandemic and, as a result of the pandemic, a reduction in the supply of contractors to some clients on longer payment terms and the deferral if GBP1.5m VAT under the Government's Coronavirus VAT deferral Scheme. The impact of both of these factors on the utilisation of the Group's invoice discounting facility has been a GBP4.3m reduction in the amount of invoice finance required to support activities.
Prior period restatements
In line with the presentation adopted in the 2019 Annual Report, the consolidated statement of financial position at 30 June 2019 has been restated to show cash balances of GBP208,000 which were previously included within liabilities due within 1 year. This restatement has not impacted the previously reported profits, net current assets or net assets. In addition the consolidated cashflow statement has been restated to present the movement on invoice discounting facility within cash flows from financing activities together with the movement on perpetual bank overdrafts, also in line with the presentation in the 2019 Annual Report.
Financing
The Group's current bank facilities comprise an overdraft of GBP50,000 and a confidential invoice discounting facility of up to GBP12.0m with HSBC at a discount margin of 1.5% above base. The Board closely monitors the level of facility utilisation and availability to ensure there is enough headroom to manage current operations and future needs of the business. The Group continues to be focussed on cash generation and building a robust statement of financial position to protect the business.
As a result of the pandemic, the Group is taking additional measures to protect its financial position by reducing its cost base, deferring non-essential capital expenditure, and making use of the Government's Coronavirus Job Retention Scheme by furloughing affected employees and utilising the Government's Coronavirus VAT deferral scheme and rates holidays for the hospitality sector.
Own shares held
The cost of the Group's own shares purchased through the Employee Benefit Trust is shown as a deduction from equity. 40,000 options were exercised during the period. The balance of GBP235,918 on the own shares held reserve within equity reflects 337,027 shares remaining in the EBT that will be used to satisfy future exercises.
Going concern
The Board continues to review and monitor the risks and sensitivities associated with the pandemic and its potential impact on the Group. Given the Group's trading performance in the six-month period to 30 June 2020, Board consideration of a range of forward looking forecast scenarios for the second half of the year and its financing facility of GBP12m which has sufficient headroom to support those expectations, the Group is expected to be able to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of approval of the accounts. As a result, the going concern basis continues to be appropriate in preparing the financial statements.
S L Dye
Group Finance Director
23 July 2020
Consolidated statement of comprehensive income:
Hot Features
Premium
Six-month Six-month Year ended
period period 31
ended 30 ended 30 December
June 2020 June 2019 2019
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
--------------------------------------- ------- ------------ ------------ ------------
Revenue 2 39,858 45,983 94,949
Cost of sales 2 (34,211) (38,985) (80,475)
--------------------------------------- ------- ------------ ------------ ------------
Gross profit 2 5,647 6,998 14,474
Other operating income 2 1,524 - -
Administrative expenses 2 (6,847) (6,196) (12,513)
--------------------------------------- ------- ------------ ------------ ------------
Profit from operations 2 324 802 1,961
Finance expense (93) (94) (203)
--------------------------------------- ------- ------------ ------------ ------------
Profit before tax 231 708 1,758
Tax expense 3 (60) (158) (390)
--------------------------------------- ------- ------------ ------------ ------------
Total profit and other comprehensive
income for the period attributable
to owners of the parent 171 550 1,368
--------------------------------------- ------- ------------ ------------ ------------
Earnings per ordinary share 4
Basic 1.20p 3.86p 9.60p
--------------------------------------- ------- ------------ ------------ ------------
Fully diluted 1.07p 3.48p 8.59p
--------------------------------------- ------- ------------ ------------ ------------
Consolidated statement of changes in equity for the six months ended 30 June 2020:
Share Share Own Capital Share Profit Total
capital premium shares redemption based and equity
held reserve payment loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 January 2020 146 120 (264) 50 557 5,627 6,236
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total comprehensive
income for
the period - - - - - 171 171
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Transactions
with owners:
Share options
exercised - - 28 - (4) (15) 9
Share based
payment charge - - - - 67 - 67
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total transactions
with owners - - 28 - 63 (15) 76
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2020 (Unaudited) 146 120 (236) 50 620 5,783 6,483
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the six months ended 30 June 2019:
Share Share Own Capital Share Profit Total
capital premium shares redemption based and equity
held reserve payment loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 January 2019 146 120 (292) 50 379 4,833 5,236
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total comprehensive
income for
the period - - - - - 550 550
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Transactions
with owners:
Dividends - - - - - (363) (363)
Share options
exercised - - 28 - (16) (10) 2
Share based
payment charge - - - - 108 - 108 ---------------------- ---------- ---------- --------- ------------- ---------- --------- --------- Total transactions with owners - - 28 - 92 (373) (253) ---------------------- ---------- ---------- --------- ------------- ---------- --------- --------- At 30 June 2019 (Unaudited) 146 120 (264) 50 471 5,010 5,533 ---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the year ended 31 December 2019:
Share Share Own Capital Share Retained Total
capital premium shares redemption based earnings equity
held reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ------------- ---------- ----------- ---------
Balance at
1 January
2019 146 120 (292) 50 379 4,833 5,236
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total comprehensive
income for
the year - - - - - 1,368 1,368
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Transactions
with owners:
Dividends - - - - - (563) (563)
Share options
exercised - - 28 - (15) (11) 2
Share based
payment charge - - - - 193 - 193
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total transactions
with owners - - 28 - 178 (574) (368)
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
At 31 December
2019 (Audited) 146 120 (264) 50 557 5,627 6,236
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Consolidated statement of financial position:
As at As at As at
30 June 30 June 31 December
2020 2019 2019
Unaudited Audited
Unaudited
Restated
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ --------------
Assets
Non-current
Goodwill 132 132 132
Other intangible assets 196 240 234
Property, plant and equipment 1,694 1,620 1,680
Right of use assets 2,965 3,216 3,044
Deferred tax asset 106 66 95
--------------------------------- ------------ ------------ --------------
5,093 5,274 5,185
Current
Inventories 10 12 10
Trade and other receivables 10,459 14,299 15,809
Cash and cash equivalents 2,022 208 798
--------------------------------- ------------ ------------ --------------
Total current assets 12,491 14,519 16,617
Total assets 17,584 19,793 21,802
--------------------------------- ------------ ------------ --------------
Liabilities
Current
Trade and other payables (6,772) (6,276) (8,493)
Lease liabilities (261) (286) (282)
Corporation tax (352) (425) (296)
Current borrowings (795) (4,256) (3,570)
--------------------------------- ------------ ------------ --------------
Total current liabilities (8,180) (11,243) (12,641)
Non-current liabilities
Lease liabilities (2,836) (2,959) (2,855)
Deferred tax liabilities (85) (58) (70)
--------------------------------- ------------ ------------ --------------
Net assets 6,483 5,533 6,236
--------------------------------- ------------ ------------ --------------
Equity
Share capital 146 146 146
Share premium 120 120 120
Capital redemption reserve 50 50 50
Own shares held (236) (264) (264)
Share based payment reserve 620 471 557
Profit and loss account 5,783 5,010 5,627
Total equity 6,483 5,533 6,236
--------------------------------- ------------ ------------ --------------
Consolidated statement of cash flows:
Six-month Six-month Year ended
period period 31 December
ended 30 ended 30 2019
June 2020 June 2019 Audited
Unaudited Unaudited
Restated
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 231 708 1,758
Adjustments for:
Depreciation, loss on disposal
and amortisation 370 397 693
Finance expense 93 94 203
Employee equity settled share options
charge 67 108 194
Change in inventories - (4) (2)
Change in trade and other receivables 5,350 1,512 (18)
Change in trade and other payables (1,721) (1,587) 629
----------------------------------------- ------------ ------------ --------------
Cash inflow from operations 4,390 1,228 3,457
Income tax paid - - (378)
Interest paid (93) (94) (203)
Net cash inflow from operating
activities 4,297 1,134 2,876
----------------------------------------- ------------ ------------ --------------
Cash flows from investing activities
Purchases of property, plant and
equipment and intangibles (174) (136) (314)
Proceeds from asset disposals - - 20
Net cash used in investing activities (174) (136) (294)
Cash flows from financing activities
Movement on invoice discounting
facility (2,818) (1,071) (1,821)
Movement on perpetual bank overdrafts 43 (139) (75)
Dividends paid - (363) (563)
Payments of lease liabilities (133) (138) (246)
Proceeds from exercise of share
options 9 2 2
Net cash outflow from financing
activities (2,899) (1,709) (2,703)
----------------------------------------- ------------ ------------ --------------
Net increase/(decrease) in cash
and cash equivalents 1,224 (711) (121)
----------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at beginning
of period 798 919 919
----------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at end
of period 2,022 208 798
----------------------------------------- ------------ ------------ --------------
Notes to the interim statement for the six months ended 30 June 2020:
1. Accounting policies a) General information
RTC Group Plc is incorporated and domiciled in England and its shares are publicly traded on AIM. The registered office address is The Derby Conference Centre, London Road, Derby, DE24 8UX. The company's registered number is 02558971. The principal activities of the Group are described in note 2.
The Board consider the principal risks and uncertainties relating to the Group for the next six months to be the same as detailed in our last Annual Report and Accounts to 31 December 2019 with the addition of the risk associated with a pandemic as explained below:
Pandemic risk
In addition to the risks set out in our last Annual Report, there is the additional risk caused by the Covid-19 pandemic and its onward consequences. This impacts the Group's UK and International operations to differing degrees. Internationally we have experienced minimal disruption. In the UK permanent recruitment, smart-meter installation activity and the provision of hotel, conference and events services have been materially impacted. In addition to the potential impact on the UK economic performance and loss of revenue to our business, our considerations include the risk of any significant extension in debtor days or credit defaults as a result of cash flow problems at our clients. To mitigate these risks, we are utilising the Government's Coronavirus Job Retention Scheme to enable us to retain staff by flexing costs in line with activity and we are closely monitoring all our clients to ensure payment terms are adhered to. We have also taken advantage of the Government's VAT deferral scheme and rates holiday for hospitality.
b) Basis of preparation
The unaudited interim Group financial information of RTC Group Plc is for the six months ended 30 June 2020 and does not comprise statutory accounts within the meaning of S.435 of the Companies Act 2006. The unaudited interim Group financial statements have been prepared in accordance with the AIM rules and have not been reviewed by the Group's auditors. This report should be read in conjunction with the Group's Annual Report and Accounts for the year ended 31 December 2019, which have been prepared in accordance with IFRS's as adopted by the European Union.
Going concern
The Board continues to review and monitor the risks and sensitivities associated with the pandemic and its potential impact on the Group. Given the Group's trading performance in the six-month period to 30 June 2020, Board consideration of a range of forward looking forecast scenarios for the second half of the year and its financing facility of GBP12m which has sufficient headroom to support those expectations, the Group is expected to be able to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of approval of the accounts. As a result, the going concern basis continues to be appropriate in preparing the financial statements.
These unaudited interim Group financial statements were approved for issue on 23 July 2020. No significant events, other than those disclosed in this document, have occurred between 30 June 2020 and this date.
c) Comparatives
The comparative figures for the year ended 31 December 2019 do not constitute statutory accounts within the meaning of S.435 of the Companies Act 2006, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies. The report of the auditor was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 nor a reference to any matters which the auditor drew attention by way of emphasis of matter without qualifying their report.
Prior period restatements
In line with the presentation adopted in the 2019 Annual Report, the consolidated statement of financial position at 30 June 2019 has been restated to show cash balances of GBP208,000 which were previously included within liabilities due within 1 year. This restatement has not impacted the previously reported profits, net current assets or net assets. In addition the consolidated cashflow statement has been restated to present the movement on invoice discounting facility within cash flows from financing activities together with the movement on perpetual bank overdrafts, in line with the presentation in the 2019 Annual Report.
d) Accounting policies
In preparing these interim financial statements, the Board have considered the impact of new standards which will be applied in the 2020 Annual Report and Accounts and there are not expected to be any changes in the accounting policies compared to those applied at 31 December 2019.
A full description of accounting policies is contained with our 2019 Annual Report and Accounts which is available on our website.
This interim announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union as effective for periods beginning on or after 1 January 2020.
2. Segment analysis
The Group has three operating segments: United Kingdom and International Recruitment which reflect the integrated approach to the Group's recruitment business in the UK and independent delivery of its overseas recruitment activities; and the UK based Central Services segment whose purpose is to provide all central services for the Group including the Group's head office facilities in Derby. It also generates income from excess space at the Derby site including rental and conferencing facilities.
This is consistent with the reporting for management purposes, with the Group organised into two reportable segments, Recruitment and Central Services, which are strategic business units that offer different products and services. They are managed separately because each segment has a different purpose within the Group and requires different technologies and marketing strategies.
Segment operating profit is the profit earned by each operating segment defined above and is the measure reported to the Group's Board, the Group's Chief Operating Decision Maker, for performance management and resource allocation purposes. The Group manages the trading performance of each segment by monitoring operating contribution and centrally manages working capital, financing and equity.
Revenues within the recruitment operating segment have similar economic characteristics and share a majority of the aggregation criteria set out in IFRS 8:12 in particular the nature of the products and services, the type or class of customers, the country in which the service is delivered and the processes utilised to deliver the services and the regulatory environment for the services.
Revenue is analysed by origin of customer/point of invoicing. All revenues below have been generated by continuing operations and invoiced to external customers. All assets and liabilities are in the UK.
During the first half of 2020, one customer in the UK Recruitment segment contributed 10% or more of that segment's revenues being GBP12.8m (2019: GBP14.2m) and one customer in the International Recruitment sector contributed 10% or more of that segment's revenues being GBP8.1m (2019: GBP8.0m).
Revenue, gross profit and operating profit delivery by geography f or the six-month period ended 30 June 2020:
GBP'000 UK International UK Total Group
Recruitment Recruitment Central
Services
-------------------------------- ---------------
Revenue 31,154 8,257 447 39,858
Cost of sales (26,638) (7,321) (252) (34,211)
-------------------------------- -------------- --------------- ----------- -------------
Gross profit 4,516 936 195 5,647
Other operating income* 1,377 - 147 1,524
Administrative expenses (4,582) (406) (1,489) (6,477)
Amortisation of intangibles (39) - - (39)
Depreciation of right of
use assets (63) - (109) (172)
Depreciation (55) (2) (102) (159)
-------------------------------- -------------- --------------- ----------- -------------
Total administrative expenses (4,739) (408) (1,700) 6,847
-------------------------------- -------------- --------------- ----------- -------------
Profit from operations 1,154 528 (1,358) 324
-------------------------------- -------------- --------------- ----------- -------------
*Other operating income represents Government Grants in respect of the Coronavirus Job Retention Scheme.
Segment profit from operations above represents the profit earned by each segment without allocation of Group administration costs or finance costs.
Segment information for the six months ended 30 June 2019:
GBP'000 UK International UK Total Group
Recruitment Recruitment Central
Services
-------------------------------- ---------------
Revenue 37,018 8,073 892 45,983
Cost of sales (31,306) (7,192) (487) (38,985)
-------------------------------- -------------- --------------- ----------- -------------
Gross profit 5,712 881 405 6,998
Administrative expenses (3,919) (370) (1,519) (5,808)
Amortisation of intangibles (93) - - (93)
Depreciation of right of
use assets (65) - (103) (168)
Depreciation (27) (2) (98) (127)
-------------------------------- -------------- --------------- ----------- -------------
Total administrative expenses (4,104) (372) (1,720) (6,196)
-------------------------------- -------------- --------------- ----------- -------------
Profit from operations 1,608 509 (1,315) 802
-------------------------------- -------------- --------------- ----------- -------------
Segment information for the year ended 31 December 2019:
GBP'000 UK International UK Total Group
Recruitment Recruitment Central
Services
--------------------------------
Revenue 76,526 16,559 1,864 94,949
Cost of sales (64,680) (14,785) (1,010) (80,475)
-------------------------------- -------------- --------------- ----------- -------------
Gross profit 11,846 1,774 854 14,474
Administrative expenses (7,852) (701) (3,269) (11,822)
Amortisation of intangibles (85) - - (85)
Depreciation of right of
use assets (125) - (214) (339)
Depreciation (93) (4) (170) (267)
-------------------------------- -------------- --------------- ----------- -------------
Total administrative expenses (8,155) (705) (3,653) (12,513)
-------------------------------- -------------- --------------- ----------- -------------
Profit from operations 3,691 1,069 (2,799) 1,961
-------------------------------- -------------- --------------- ----------- -------------
Recruitment revenues are generated from permanent and temporary recruitment and long-term contracts for labour supply. Within Central Services revenues are generated from the rental of excess space and facilities at the Derby site, described as Other below. Revenue and gross profit by service classification for management purposes:
Revenue Six months Six months Year ended
ended 30 ended 30 31
June 2020 June 2019
(Unaudited) (Unaudited)
December
2019
GBP'000 (Audited)
Permanent placements 741 1,410 2,819
Contract 38,670 43,681 90,266
Other 447 892 1,864
----------------------- -------------- -------------- ------------
39,858 45,983 94,949
----------------------- -------------- -------------- ------------
Gross profit Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019
(Unaudited) (Unaudited)
2019
(Audited)
GBP'000
----------------------- -------------- -------------- --------------
Permanent placements 741 1,410 2,819
Contract 4,711 5,183 10,801
Other 195 405 854
----------------------- -------------- -------------- --------------
5,647 6,998 14,474
----------------------- -------------- -------------- --------------
3. Income tax
Six-month Six-month Year ended
period period 31
ended 30
June 2020
(Unaudited)
ended 30 December
June 2019 2019
(Unaudited)
Continuing operations (Audited)
GBP'000 GBP'000 GBP'000
---------------------------------------- -------------- --------------- ------------
Analysis of tax:
Current tax
UK corporation tax 56 164 402
Adjustment in respect of previous
period - - 11
---------------------------------------- -------------- --------------- ------------
56 164 413
Deferred tax
Origination and reversal of temporary
differences 4 (6) (23)
Tax 60 158 390
---------------------------------------- -------------- --------------- ------------
Factors affecting the tax expense
The tax assessed for the six-month period ended 30 June 2020 is higher than (2019: higher than) would be expected by multiplying profit by the standard rate of corporation tax in the UK of 19% (2019: 19%).
The differences are explained below:
Six-month Six-month Year ended
period ended period ended 31 December
30 June 2020 30 June 2019
Unaudited 2019 Unaudited Audited
Factors affecting tax expense GBP'000 GBP'000 GBP'000
------------------------------------ --------------- ----------------- --------------
Result for the period before
tax 231 708 1,758
------------------------------------ --------------- ----------------- --------------
Profit multiplied by standard
rate of tax of 19% (2019: 19%) 44 135 334
Non-deductible expenses 35 55 86
Tax credit on exercise of options (3) (4) (5)
Other differences (16) (28) (36)
Adjustment in respect of previous
period - - 11
------------------------------------ --------------- ----------------- --------------
Tax charge for the period 60 158 390
------------------------------------ --------------- ----------------- --------------
4. Earnings per share
The calculation of 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 year.
The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for all dilutive potential ordinary shares.
Basic Diluted
Six-month Six-month Six-month Six-month
period ended period ended period ended period ended
30 June 2020 30 June 2019 30 June 2020 30 June
2019
Unaudited Unaudited Unaudited Unaudited
---------------
Earnings GBP'000 171 550 171 550
-------------------- --------------- --------------- ---------------
Basic weighted
average number
of shares 14,279,831 14,234,392 14,279,831 14,234,392 -------------------- --------------- --------------- --------------- --------------- Dilutive effect of share options - - 1,747,749 1,552,981 -------------------- --------------- --------------- --------------- --------------- Fully diluted weighted average number of shares - - 16,027,580 15,787,373 -------------------- --------------- --------------- --------------- --------------- Earnings per share (pence) 1.20p 3.86p 1.07p 3.48p -------------------- --------------- --------------- --------------- ---------------
5. Borrowings
Included in current borrowings are bank overdrafts and an invoice discounting facility which is secured by a cross guarantee and debenture over all Group companies. There have been no defaults or breaches of the terms of the facility during the current or prior period.
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 EASXAAAKEEFA
(END) Dow Jones Newswires
July 23, 2020 02:00 ET (06:00 GMT)
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