TIDMNAK
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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