TIDMEMR

RNS Number : 6384S

Empresaria Group PLC

18 March 2021

18 March 2021

Empresaria Group plc

("Empresaria" or the "Group")

Results for the year ended 31 December 2020

Profitability, operational resilience and financial strength

Empresaria, the global specialist staffing group, reports its unaudited preliminary results for the year ended 31 December 2020.

 
 
                                                                             % change 
                                                                            (constant 
 Highlights                            2020        2019     % change     currency)(2) 
-------------------------------  ----------  ----------  -----------  --------------- 
 Revenue                          GBP256.5m   GBP358.0m         -28%             -27% 
 Net fee income                    GBP54.0m    GBP74.5m         -28%             -27% 
 Operating (loss)/profit          GBP(1.0)m     GBP4.0m        -125% 
 Adjusted operating profit(1)       GBP6.2m    GBP10.4m         -40%             -39% 
 Loss/(profit) before tax         GBP(2.0)m     GBP2.9m        -169% 
 Adjusted profit before tax(1)      GBP5.2m     GBP9.3m         -44% 
 Diluted loss per share              (6.2)p      (1.6)p        -288% 
 Adjusted diluted earnings 
  per share(1)                         4.1p        8.5p         -52% 
 

-- Strong start to 2020 with year-on-year operating profit growth in every month of the first quarter

   --    Benefits of diversification by sector and geography demonstrated throughout the year 

-- Resilience of the Group's balance sheet proven - adjusted net debt reduced to GBP13.6m (2019: GBP19.1m)

   --    Net fee income down 28% to GBP54.0m as a result of the impact of COVID-19 
   --    Adjusted operating profit down 40% to GBP6.2m - profitable in every quarter of 2020 
   --    Strategic and operational investments protected 
   --    2021 guidance reinstated 
   --    Resumption of dividend with a final dividend of 1.0p per share proposed (2019: nil) 

1 Adjusted to exclude amortisation of intangible assets identified in business combinations, impairment of goodwill and other intangible assets, exceptional items, fair value charges on acquisition of non-controlling shares and, in the case of earnings, any related tax.

2 The constant currency movement is calculated by translating the 2019 results at the 2020 exchange rates.

An interview with management covering the Group's performance is available here: http://bit.ly/EMR_FY20_overview

Chief Executive Officer, Rhona Driggs, commented:

"Our results for 2020 demonstrated the resilience of our operating model and the benefits of our diversification by sector and geography. The swift actions we took early in the pandemic helped to protect our profitability. While cost was a key consideration, our focus on the Group's operations did not waiver as we protected, and in several cases accelerated, our key operational initiatives and investments. Early indications of trading in 2021 are positive and although, due to our strong start to last year, adjusted profits for the first half of 2021 are likely to be behind the first half of 2020 we expect for the full year to deliver adjusted profits in line with or better than 2020. We enter 2021 well positioned to exit the pandemic stronger than we entered it and to take advantage of recovery in our markets."

Investor presentation

In line with Empresaria's commitment to ensuring appropriate communication structures are in place for all sections of its shareholder base, management will deliver an online results presentation open to all existing and potential investors via the Investor Meet Company platform on Thursday 18 March 2021 at 4:15pm UK time.

Questions can be submitted pre-event through the platform or at any time during the live presentation. Management may not be in a position to answer every question it receives but will address those it can while remaining within the confines of information already disclosed to the market.

Q&A responses will be published at the earliest opportunity on the Investor Meet Company platform.

Investors can sign up for free via: https://www.investormeetcompany.com/empresaria-group-plc/register-investor .

Those who have already registered and requested to meet the Company will be automatically invited.

- Ends -

Enquiries:

 
Empresaria Group plc                     via Alma PR 
 Rhona Driggs, Chief Executive Officer 
 Tim Anderson, Chief Financial Officer 
N+1 Singer (Nominated Adviser and 
 Broker) 
 Shaun Dobson / James Moat               020 7614 5900 
Alma PR (Financial PR)                   020 3405 0205 
 Sam Modlin                               empresaria@almapr.com 
 David Ison 
 

Notes for editors:

-- Empresaria Group plc is a global specialist staffing group offering temporary and contract recruitment, permanent recruitment and offshore recruitment services across 6 sectors: Professional; IT; Healthcare; Property, Construction and Engineering; Commercial and Offshore Recruitment Services.

-- Empresaria operates in 20 countries across the world including the 4 largest staffing markets of the US, Japan, UK and Germany along with a strong presence elsewhere in Asia Pacific and Latin America.

-- Empresaria is listed on AIM under ticker EMR. For more information: empresaria.com

Chair's statement

2020 performance

The past year has been extremely challenging for the staffing industry, the global economy and society as a whole. Our full-year results have once again demonstrated the resilience of the Group in the face of economic uncertainty and the benefits of our diversification by sector and geography. Our Offshore Recruitment Services sector, which is a key differentiator for the Group, also proved resilient and bounced back strongly after the initial impact from COVID-19.

We started 2020 strongly, realising the benefits of the operational initiatives we made in 2019, and delivering year-on-year operating profit growth in each of the first three months of the year. As COVID-19 started to impact us in March, the benefits of our Stronger Together initiative were evident as we responded swiftly and effectively, facing the challenges we encountered together as a Group through sharing experiences and ideas. A key factor in helping to deliver in this environment was the responsiveness and expertise of our Board which has significant experience in the Group and the wider staffing industry. Our governance processes were very effective during this period.

Our diversification delivered key benefits. For example, in Germany, the surge in supermarket sales increased demand for staffing from our logistics operation. This helped to partially offset some of the more significant adverse impacts, such as in our aviation business where demand for pilots fell substantially.

This diversity, combined with our swift actions on costs, ensured that despite a significant fall in net fee income, the Group remained profitable (adjusted profit before tax) through each quarter of the year. As we moved into the second half of 2020 our markets and clients started to adjust to the new normal and we saw some positive momentum going into the final months of the year. The improved level of demand, combined with our strong cost controls and the benefits from operational initiatives, enabled us to deliver a higher level of adjusted profit before tax in the second half of the year compared with the first, despite net fee income being lower.

We have continued to push forward with our operational initiatives, including seeking to improve and optimise our operating models to enable us to deliver more efficiently and effectively and providing the flexibility to take advantage as and when demand returns. Our investment in a common technology platform has continued to progress and will be implemented in the majority of the Group within the next 18 months.

People

It is the dedication and hard work of all our teams around the world that has enabled us to successfully navigate the challenges of 2020 and the Board would like to thank all of our employees for their contributions under difficult circumstances.

Our Stronger Together initiative, launched in 2019, has enabled our staff to operate more effectively, feel part of a global operation and realise the benefits that brings. A great example of this is a recent internal networking event which brought 235 of our people together in an online event to share ideas and best practice.

Dividend

In common with many businesses, the Group took the decision not to pay a dividend in the first half of 2020, reflecting the uncertainties at the time and the significant potential impact of COVID-19 on the business. While the pandemic is not over, the situation has stabilised and the Group has demonstrated the resilience of

its operations and its balance sheet. As a result, we are planning to reinstate the dividend and propose a dividend of 1.0p per share for the year ended 31 December 2020. Subject to shareholder approval at the

Annual General Meeting, the dividend will be paid on 4 June 2021 to shareholders on the register on 14 May 2021.

Outlook

COVID-19 will continue to be a significant influence for the year ahead. However, we have shown in 2020 that we can continue to deliver effectively to our clients in this 'new normal' and do so while delivering profits (adjusted profit before tax) for our shareholders. With the benefit of the operational investments and initiatives we have continued to drive forward in the year, we believe we are well placed to exit the pandemic stronger than we entered it. The increased level of national lockdowns and restrictions in several of our markets at the start of 2021 means we remain cautious on the immediate outlook, but believe we are well placed to take advantage as and when markets recover.

Tony Martin

Chairman

17 March 2021

Chief Executive's Review

Performance and operational review

At the beginning of the year we started to realise the benefits of the operational initiatives we put in place in 2019. As a result we delivered year-on-year increases in operating profit in each of the first three months of 2020. We started to see impact from COVID-19 in March, which resulted in first quarter net fee income falling 5% against 2019.

The benefits of our operational initiatives gave us a solid foundation as COVID-19 started to impact the business. This confidence and belief in what we were doing shaped how we approached the pandemic and fed our determination to capitalise on these benefits and continue to deliver change in the challenging months ahead.

When we started to see the impact on net fee income and demand in March we took swift action on cost across

the Group, especially in businesses where net fee income was expected to be hardest hit. These actions included a Group-wide hiring freeze alongside pay and headcount reductions. We did not take these decisions

lightly as we sought to protect our employees and our business at a very uncertain time.

We had strong and consistent communication across the Group and our geographic diversity meant that we were able to share experiences and learning from those countries that went into lockdown earliest.

The work we have done on building culture helped us not only in our communication across the Group, but also in the sharing of ideas and experiences. We provided regular training and webinars focused first and foremost on the safety and well-being of our employees, our clients and our candidates and then quickly launched into managing productivity in a remote environment. We ensured the focus in each of our businesses was on areas where they were seeing demand in order to maximise opportunities and net fee income and supported our businesses with training so they could broaden their offering into areas where we had the opportunity to easily

pivot our services.

Our Board was also extremely responsive, which, combined with their significant experience in the Group and the wider staffing industry, helped enable us to execute changes rapidly.

As initial cost reductions took place we kept our focus on client retention and sales, and on keeping client and candidate engagement high. We were also determined to take advantage of this time to make the operational changes needed in the business to ensure we come out of the pandemic stronger than we went in.

Communication and engagement were key for us. Our internal communication technology, implemented in December 2019, enabled us to instantly and effectively communicate across the entire Group. It also provided us with a platform to leverage and share best practices and experiences, which was extremely beneficial given our markets were being impacted at different times. Lessons learned and shared were vital for us in navigating this pandemic.

Progress against strategic initiatives

Our organic growth was impacted, however I am pleased with the progress we made on many of our other strategic initiatives and in fact we were able to accelerate several of these from our initial target dates.

We accelerated our initiatives to leverage our Offshore Recruitment Services sector to move recruiting and back office functions to a lower cost environment while maintaining quality.

We protected key investments such as our technology initiatives and launched a new offering in our Offshore Recruitment Services sector in the US market, which is a key growth area for the Group.

We restructured our operations in a number of our businesses which will provide greater focus on sales and recruiting while providing more scalable operating models.

Opportunities to learn from adversity

The biggest initial benefit was the acceleration of the unity we had been building in the Group as a result of facing the common challenge of COVID-19. This helped us to adapt and respond quickly and further prove our Stronger Together initiatives.

We learned that in many cases we can be effective working remotely and will be able to take advantage of a more flexible workforce in those businesses that have shown increased productivity, enabling us to recruit the best talent regardless of where they live.

It is more important than ever to have a flexible cost base and we acted quickly as a group on cost, and no businesses were exempt from that. As a result we have rightsized our cost base moving into 2021.

Additionally, we demonstrated the strength of our balance sheet and illustrated that our funding structure responds as we would expect in a downturn, with our net debt reducing significantly as working capital requirements fell in line with trading.

Industry dynamics

The staffing industry has always proven to be extremely resilient. We are first to see the impact from an economic downturn but also generally first to show signs of recovery as companies look to leverage a more flexible workforce in times of uncertainty. Our clients will be looking for flexible staffing solutions as their businesses recover.

I would expect to see greater demand for outsourcing and offshore solutions given the lessons learned during the pandemic and the greater acceptance of remote workers. I would also expect to see a significant reduction in office space as companies make permanent moves to a more remote or hybrid work environment.

We will also see continued acceleration of the digitalisation and automation of staffing processes including hiring (video interviewing), onboarding and candidate engagement platforms. Technology solutions such as our investment in a common platform will play a pivotal role post pandemic.

Outlook

We have been focused on exiting the pandemic stronger than we went in. The operational changes and efficiencies we have made, and will continue to make, leave us well positioned to take advantage of recovery in our markets.

Successful implementation and adoption of our IT initiatives will be a competitive advantage, harnessing the power of a global organisation with the strength of local market knowledge and expertise.

While we cannot control how COVID-19 will continue to impact us and our clients around the world, we are cautiously optimistic and focused on what we can control: how we respond to each challenge; how we grow our market share with our clients; and how we best position ourselves for market recovery.

Rhona Driggs

Chief Executive Officer

17 March 2021

Operating Review

Professional

 
 GBPm                         2020    2019 
---------------------------  -----  ------ 
 Revenue                      55.3   125.0 
 Net fee income               15.4    27.3 
 Adjusted operating profit     0.2     3.5 
 % of Group net fee income     28%     37% 
 Average number of staff       342     413 
 

Our Professional sector saw the greatest impact from COVID-19, with revenue down by 56% (55% in constant currency), net fee income down by 44% (43% in constant currency) and adjusted operating profit decreasing to GBP0.2m. All of our operations in this sector were significantly impacted by COVID-19 with large falls in net fee income. Swift cost-cutting actions ensured that losses were kept to a minimum and the sector as a whole remained profitable.

The greatest impact on net fee income was in our business supplying pilots to the aviation industry. This industry has been badly affected, and the ongoing impact of travel restrictions and passenger attitudes to flying mean that we do not expect this to recover in the short term. As a result, an impairment charge has been booked against the goodwill and other intangible assets related to this business (see notes 9 and 10 for details). The business has been restructured in order to rightsize its cost base and ensure it is well placed to take advantage when the market recovers. Although we are cautious on short-term recovery, this sector has a strong track record of bouncing back after significant adverse events and we believe there is good growth potential in the medium and long term.

In Asia we currently operate primarily in permanent recruitment focused markets and we saw a significant impact from COVID-19 in each country, but with the timing of the peak impact varying by location. With the exception of Vietnam, where we delivered year-on-year growth in net fee income, and China, which was in line

with 2019, all countries saw double-digit falls in net fee income against the prior year. Some improvements were seen in the second half of the year but markets have remained subdued as second and third

waves of COVID-19 and associated localised restrictions continue to impact.

In the UK our operation focused on clients in the financial services sector, which had previously been impacted by Brexit uncertainty, was significantly impacted by COVID-19. This impact continued through the second half of the year with Brexit uncertainty muting any early signs of recovery from COVID-19. Our domestic services business was very badly hit in the first UK lockdown as clients were unwilling to invite new staff into their homes. Demand recovered well as the year went on although the localised restrictions in place at the end of the year have had an adverse impact.

During 2020 we reviewed our smaller operations and consolidated loss-making offices in Chile and New Zealand and closed one in Mexico.

IT

 
 GBPm                         2020   2019 
---------------------------  -----  ----- 
 Revenue                      41.8   45.2 
 Net fee income               12.7   14.4 
 Adjusted operating profit     1.8    3.2 
 % of Group net fee income     23%    19% 
 Average number of staff       105    116 
 

Our IT sector was one of our more resilient sectors in the face of COVID-19, with revenue down by 8% (8% in constant currency), net fee income down by 12% (12% in constant currency) and adjusted operating profit decreasing to GBP1.8m.

In Japan, although the impact of COVID-19 was felt earlier in the year than in many countries, it was also one of the most resilient markets with a relatively effective response to the virus. Our operation there was one of our most successful, with a low single-digit percentage fall in net fee income and profits in line with 2019.

In the US, a very strong start to 2020 was followed by a weaker second half to the year and full-year net fee income fell by a mid single-digit percentage. Our US business is currently almost 90% permanent recruitment, leaving it exposed to greater fluctuations in net fee income, particularly in the face of significant market impacts such as those seen this year. We are focused on growing our temporary and contract business in the US and see this as a key market for delivering future growth.

Our UK business, where 80% of our net fee income is derived from placements outside the UK, had a difficult year and saw a much greater impact from COVID-19 than we saw elsewhere in this sector, with net fee income falling by 20% and operating profit by more than half. Actions have been taken to restructure this business, reducing costs and improving the operating model so they are better placed to drive sales and deliver profits as demand returns.

During the year we invested further in this sector by acquiring the remaining shares in ConSol Partners, taking our ownership to 100%. This investment was done on substantially reduced terms compared to the original acquisition in 2016, reflecting both the founders' desire to sell their remaining shares now that they were no longer directly involved in the business, and all parties' appreciation of the impact of COVID-19 on the Group. This business has performed well since joining the Group and although it has had a challenging 2020, we believe it continues to have great potential for growth given the strong demand for IT and our investment reflects the Group's commitment to investing in high potential sectors.

Healthcare

 
 GBPm                         2020   2019 
---------------------------  -----  ----- 
 Revenue                      13.2   11.3 
 Net fee income                2.5    2.8 
 Adjusted operating profit     0.4    0.5 
 % of Group net fee income      5%     4% 
 Average number of staff        17     21 
 

Our Healthcare sector was our most resilient in the face of COVID-19, with revenue up by 17% (17% in constant currency), net fee income down by 11% (11% in constant currency) and adjusted operating profit decreasing only slightly to GBP0.4m.

In the US, our revenues increased but net fee income reduced with higher volumes offset by lower margins at our major clients. An adverse impact was seen from COVID-19, particularly during the first lockdowns, with patients unable or unwilling to engage with healthcare services unless absolutely necessary, resulting in lower demand for temporary staff. However, we have started to see a more positive benefit with strong momentum developing at the end of the year driven by testing and vaccination programmes.

In Finland, both revenue and net fee income increased year on year. An adverse impact from COVID-19 was seen in the second quarter of 2020 in line with the US, but demand recovered strongly through the second half with the final months of the year showing significant increases over 2019.

Property, Construction & Engineering

 
 GBPm                          2020    2019 
---------------------------  ------  ------ 
 Revenue                        3.6    22.4 
 Net fee income                 0.7     3.8 
 Adjusted operating loss      (0.2)   (1.2) 
 % of Group net fee income       1%      5% 
 Average number of staff         17      61 
 

The restructuring of our UK engineering business late in 2019, which resulted in the closure of a substantial part of the business, is the main driver for the year-on-year movements in this sector.

Our remaining operations are focused on supplying sales staff to the new home sector and on building management systems which will be complemented by expansion into the white collar end of the construction sector as we target our investment at higher skilled roles where we see greater opportunity and less risk.

Lockdown restrictions in the UK have had a particularly significant impact on our supply of sales staff to the new home sector, with sites forced to close and sales activity transferred online. Demand is yet to show any significant signs of recovery but this business has a strong track record of bouncing back when demand recovers.

Commercial

 
 GBPm                          2020    2019 
---------------------------  ------  ------ 
 Revenue                      132.3   142.4 
 Net fee income                17.2    19.7 
 Adjusted operating profit      4.6     5.4 
 % of Group net fee income      32%     26% 
 Average number of staff        256     273 
 

Our Commercial sector was one of our more resilient sectors in the face of COVID-19, with revenue down by 7% (5% in constant currency), net fee income down by 13% (12% in constant currency) and adjusted operating profit reducing by 15% to GBP4.6m.

In Germany, our logistics business benefited from the impact of COVID-19, with increased demand from its clients, which include a number of supermarkets, as they saw increases in trading, particularly during lockdown restrictions. This was offset by weaker demand in our other German businesses where we have major clients in the automotive sector which continued to face significant challenges in the first half of the year. We started to see demand increase in the second half of 2020 and have restructured our operations to improve focus and efficiency and ensure we are well placed to take advantage as the market recovers.

In Latin America, the impact of COVID-19 started to be felt later than in our other markets but nonetheless had a significant impact on our businesses there. In Chile we received some protection with supermarkets forming a significant part of the client base, which helped offset impacts from other clients.

In Japan we place staff in the retail sector and demand was significantly impacted in the first half of the year with retail outlets shut during Tokyo lockdowns and reduced demand when they reopened. Demand has partially recovered during the second half of the year but conditions remain challenging.

Offshore Recruitment Services

 
 GBPm                          2020    2019 
---------------------------  ------  ------ 
 Revenue                       10.9    12.2 
 Net fee income                 6.1     7.0 
 Adjusted operating profit      2.6     3.2 
 % of Group net fee income      11%      9% 
 Average number of staff      1,019   1,051 
 

Our Offshore Recruitment Services sector was initially significantly impacted by COVID-19 but rebounded quickly with full year revenue reducing by 11% (6% in constant currency), net fee income by 13% (8% in constant currency) and adjusted operating profit by 19% to GBP2.6m.

Our operations, which primarily support the staffing sector in the US and UK, experienced a significant drop in demand during the second quarter, particularly from its US clients, when staffing services started to see the initial impact of COVID-19 on their own businesses. However, the business has recovered strongly through the second half of 2020 and is now back at the level seen at the start of the year with headcount in our India operation back over 1,000.

We have continued to invest in this sector with the launch of a managed direct sourcing and Recruitment Process Outsourcing solution which will further accelerate the growth and diversification of this business.

Regional Summary

 
                                                                   Adjusted operating 
                                    Revenue     Net fee income                 profit 
 GBPm                          2020    2019      2020     2019        2020       2019 
---------------------------  ------  ------  --------  -------  ----------  --------- 
 UK                            46.4    77.6      13.4     22.6         0.6        1.2 
 Continental Europe            91.1    93.1      14.0     14.7         3.8        4.0 
 Asia Pacific                  63.9   126.4      19.4     27.7         3.6        7.2 
 Americas                      55.7    61.4       7.8     10.0         1.4        2.2 
 Central and consolidation    (0.6)   (0.5)     (0.6)    (0.5)       (3.2)      (4.2) 
---------------------------  ------  ------  --------  -------  ----------  --------- 
 Total                        256.5   358.0      54.0     74.5         6.2       10.4 
---------------------------  ------  ------  --------  -------  ----------  --------- 
 

The UK was one of our worst performing regions, with revenue down 40%, net fee income down 41% and adjusted operating profit down 50%. All of our sectors with a presence in the UK were significantly impacted, but strong action on costs ensured this region remained profitable.

Continental Europe was our best performing region, with revenue down just 2%, net fee income down 5% and adjusted operating profit down 5%. The region benefited from positive performances from our logistics business in our Commercial sector in Germany and our Healthcare operation in Finland, which helped to offset the adverse impact elsewhere, particularly in our operations that supply the automotive sector in Germany.

Asia Pacific had a difficult year, with revenue down 49%, net fee income down 30% and adjusted operating profit down 50%. Our Professional sector was the biggest contributor to this, with our New Zealand based operation that supplies the aviation industry particularly badly affected. Our IT operation in Japan performed well under the circumstances with only a small fall in net fee income, while our Offshore Recruitment Services business, primarily based in India, saw results fall compared to the prior year but ended the year strongly. Our other operations in Asia are largely reliant on permanent recruitment which is typically more heavily impacted in times of economic disruption.

In the Americas, revenue fell 9%, net fee income fell 22% while adjusted operating profit was down 36%. Our Healthcare business in the US saw revenue rise but net fee income fall, reflecting lower margins with key clients. Our US IT business had a good start to the year but saw demand fall in the second half. In Latin America COVID-19 had a significant impact in both Peru and Chile, with our Chile business receiving some protection with its client base including supermarkets.

Finance Review

Overview

The Group's results for 2020 reflect a challenging year that has been dominated by the impact of COVID-19. After a strong start that saw three successive months of year-on-year operating profit growth, COVID-19 had a substantial impact across our operations. In the second quarter net fee income fell by 39% against the same period in 2019 with smaller year-on-year falls of 38% and 27% in the third and fourth quarters, respectively, as our markets and clients started to adapt to the new normal. Net fee income and revenue for the full year both fell by 28% against 2019.

Swift and decisive cost actions at the start of the second quarter, along with benefits from the diversity of our sectors and markets, meant that at an adjusted operating profit level we delivered profits in every quarter of the year. The ongoing benefits of our cost actions and operational initiatives helped deliver an increased level of adjusted profit before tax in the second half of the year, compared to the first, despite a lower level of net fee income. Adjusted profit before tax for the full year was GBP5.2m (2019: GBP9.3m) while reported loss before tax was GBP2.0m (2019: profit before tax GBP2.9m).

Despite the fall in profits, the Group's adjusted net debt reduced during the year to GBP13.6m (2019: GBP19.1m) reflecting significant working capital inflows as trading levels dropped and demonstrating the resilience of the Group's balance sheet in economic downturns. The level of adjusted net debt is expected to increase again if trading levels continue to recover.

Income statement

 
                                                                     % change 
                                    2020     2019                    constant 
                                    GBPm     GBPm     % change    currency(2) 
 Revenue                           256.5    358.0         -28%           -27% 
 Net fee income                     54.0     74.5         -28%           -27% 
 Operating (loss)/profit           (1.0)      4.0        -125% 
 Adjusted operating profit(1)        6.2     10.4         -40%           -39% 
 (Loss)/profit before tax          (2.0)      2.9        -169% 
 Adjusted profit before tax(1)       5.2      9.3         -44% 
 Diluted loss per share           (6.2)p   (1.6)p        -288% 
 Adjusted diluted earnings 
  per share(1)                      4.1p     8.5p         -52% 
 

1 Adjusted to exclude amortisation of intangible assets identified in business combinations, impairment of goodwill and other intangible assets, exceptional items, fair value charges on acquisition of non-controlling shares and, in the case of earnings, any related tax. See note 7 for a reconciliation between profit before tax and adjusted profit before tax.

2 The constant currency movement is calculated by translating the 2019 results at the 2020 exchange rates.

Revenue and net fee income both reduced by 28%, and 27% in constant currency. Adjusted operating profit reduced by 40%, 39% in constant currency. A detailed analysis by sector is provided in the Operating Review.

Central costs have decreased to GBP3.2m (2019: GBP4.2m) reflecting the impact of cost-saving initiatives, along with reduced costs for bonuses and share schemes.

The Group utilised government support schemes introduced to help protect jobs and minimise redundancies. These varied by country but typically involved payments from governments to support part of the salary of staff working either no or reduced hours due to the impact of COVID-19. All funds received were paid out to employees and in most cases did not cover 100% of the cost of the lost time. Payments of GBP1.9m were received in respect of internal staff and these are offset in administrative costs in the income statement. Had these payments not been received, the Group would most likely have made further permanent reductions to head count in order to reduce these costs. We also worked with our clients to help protect the jobs of our temporary workers, with a further GBP3.6m of support offset against cost of sales in the income statement. Had the government schemes not been available, in most cases this would have resulted in those temporary assignments being ended.

Adjusted profit before tax has reduced by 44% to GBP5.2m reflecting the lower adjusted operating profit. The reported loss before tax of GBP2.0m reflects impairment charges on goodwill and other intangible assets of GBP5.0m (2019: GBP2.5m), exceptional costs of GBP0.2m (2019: GBP2.1m), a fair value charge on acquisition of non-controlling shares of GBP0.3m (2019: GBPnil) and amortisation of intangible assets identified in business combinations of GBP1.7m (2019: GBP1.8m).

The impairment charges arose in our Professional sector where our operation providing pilots to the aviation industry has seen a very significant impact on its operations due to COVID-19. Although actions have been taken to rightsize the cost base, the aviation industry is not expected to recover as quickly as other areas and in the short term this business is expected to make substantially lower profits than in the past. As a result, an impairment charge has been booked on both goodwill and other intangible assets related to this operation. Further details are provided in notes 9 and 10.

Exceptional costs of GBP0.2m have been recognised in the year with costs of GBP0.3m in respect of the restructuring of senior management positions across the Group and GBP0.2m incurred in closing our operation in Mexico, offset by credits of GBP0.3m in respect of exceptional items booked in prior years. Some additional one-off costs have been incurred as a result of cost-cutting exercises undertaken in response to COVID-19. The Group has not disclosed these as exceptional costs as they do not meet our definition of exceptional items and so they are included as a cost within our adjusted profit measures. Further details on exceptional items are provided in note 3.

A GBP0.3m fair value charge on acquisition of non-controlling shares (2019: GBPnil) has been recognised on the acquisition of shareholdings from management shareholders on their exit from the Group (see note 4 for more details).

The total tax charge for the year is GBP1.2m (2019: GBP2.4m), with the effective tax rate of -60% (2019: +83%) distorted by the mix of profits by jurisdiction and the non-deductible goodwill impairment charge. On an adjusted basis, the effective rate is 46% (2019: 37%). The effective tax rate is higher than the underlying tax rates due to a number of factors, including:

   --      the level of non-deductible expenses in the year (GBP0.5m); 
   --      withholding and dividend taxes resulting from overseas operations (GBP0.2m); and 
   --      deferred tax assets not recognised for certain tax losses around the Group (GBP0.3m). 

Adjusted, diluted earnings per share fell by 52% to 4.1p. This reflects the reduction in adjusted profit before tax, along with an increase in the proportion of profits allocated to non-controlling interests. Those businesses with higher non-controlling ownership, particularly in our Offshore Recruitment Services sector, have performed relatively strongly compared to much of the rest of the Group in 2020, resulting in this increased allocation. Reported diluted loss per share was 6.2p (2019: loss per share 1.6p) reflecting the impact of impairment charges discussed above.

Balance sheet

 
                                                 2019 
                                    2020    restated* 
                                    GBPm         GBPm 
 Goodwill and other intangible 
  assets                            43.0         49.0 
 Trade and other receivables        44.9         55.2 
 Cash and cash equivalents          20.8         17.6 
 Right-of-use assets                 9.0         10.2 
 Other assets                        4.4          4.7 
-------------------------------  -------  ----------- 
 Assets                            122.1        136.7 
-------------------------------  -------  ----------- 
 
 Trade and other payables         (33.4)       (37.7) 
 Borrowings                       (33.4)       (35.2) 
 Lease liabilities                 (9.4)       (10.8) 
 Other liabilities                 (3.5)        (5.0) 
-------------------------------  -------  ----------- 
 Liabilities                      (79.7)       (88.7) 
-------------------------------  -------  ----------- 
 
 Net assets                         42.4         48.0 
-------------------------------  -------  ----------- 
            * see note 1 
 

Goodwill and intangible assets arose from the investments the Group has made. As at 31 December 2020 the balance was GBP43.0m (2019: GBP49.0m) with the movement from 2019 due to GBP1.8m of amortisation of intangible assets (2019: GBP1.9m), foreign exchange gains of GBP0.5m (2018: losses of GBP1.5m), impairment charges of GBP5.0m (2019: GBP2.5m) related to the Group's aviation business in the Professional sector and additions of GBP0.3m (2019: GBP0.1m).

Trade and other receivables includes trade receivables of GBP37.0m (2019: GBP45.6m) with the reduction from 2019 reflecting the impact of COVID-19 on trading levels. Average debtor days for the Group in 2020 were 47 (2019: 44), with debtor days at 31 December 2020 of 47 (2019: 44). The increase in debtor days reflects the reduction in our aviation business which has a low working capital requirement. The income statement includes GBP0.6m (2019: GBP0.6m) in respect of impairment losses on trade receivables.

Cash and borrowings are discussed in the financing section below.

Cash flow

The Group is typically highly cash generative with a historically strong correlation between pre-tax profits and cash flows. The Group measures its free cash flow as a key performance indicator and defines this as net cash from operating activities per the cash flow statement excluding cash flows related to pilot bond liabilities (see financing section below) and after deducting payments made under lease agreements.

 
                                               2020    2019 
                                               GBPm    GBPm 
 Net cash inflow from operating activities 
  per cash flow statement                      14.2     7.5 
 Cash flows related to pilot bonds              0.5     3.8 
 Payments under lease agreements              (6.2)   (6.5) 
-------------------------------------------  ------  ------ 
 Free cash flow                                 8.5     4.8 
 Taxation                                       3.0     5.6 
-------------------------------------------  ------  ------ 
 Free cash flow (pre-tax)                      11.5    10.4 
-------------------------------------------  ------  ------ 
 

In 2020 the Group saw an increase in free cash flow with the falls in trading due to COVID-19 driving significant working capital inflows, more than offsetting the fall in profit, and illustrating the resilience of the Group's funding model in a downturn. In the first half of 2020, the Group deferred UK VAT and payments under similar schemes totalling GBP3.5m. The majority of this was repaid in the second half of the year with the remaining GBP0.9m to be settled in the first quarter of 2021. While the working capital outflows started to reverse in the second half of the year, trading levels and working capital requirements remain below the levels at the end of 2019. Were trading levels to continue to recover, we would expect working capital requirements to continue to increase.

The Group also presents a pre-tax free cash flow measure as tax payments in a global business can be volatile. Tax payments in the year were substantially lower than 2019, reflecting both the reduction in profit levels and payments in 2019 to settle tax liabilities in jurisdictions where multi-year tax audits are the norm.

In 2020 the Group utilised its free cash flow as follows:

 
                                                 2020    2019 
                                                 GBPm    GBPm 
 Free cash flow                                   8.5     4.8 
 Acquisition of businesses (net of 
  cash acquired)                                (0.1)   (0.2) 
 Purchase of shares in existing subsidiaries    (1.5)   (3.5) 
 Purchase of property, plant and equipment 
  and software                                  (0.7)   (1.5) 
 Dividends paid to owners of Empresaria 
  Group plc                                         -   (1.0) 
 Dividends paid to non-controlling 
  interests                                     (0.5)   (0.6) 
 Purchase of own shares in Employee             (0.2)       - 
  Benefit Trust 
---------------------------------------------  ------  ------ 
 Decrease/(increase) in adjusted net 
  debt                                            5.5   (2.0) 
---------------------------------------------  ------  ------ 
 

The purchase of shares in existing subsidiaries mainly relates to the acquisition of further shares in ConSol Partners in May 2020. Following further smaller purchases later in the year the Group now owns 100% of this business. A number of smaller purchases of shares in other subsidiaries were made primarily as a result of the departure of management shareholders (see note 4).

Purchase of property, plant and equipment and software of GBP0.7m is substantially reduced from 2019 which included costs to relocate our Indian operation into a single office. Dividends paid to our shareholders were GBPnil (2019: GBP1.0m) reflecting the cancellation of the 2019 final dividend. Empresaria shares purchased and transferred into the Employee Benefit Trust totalled GBP0.2m while dividends paid to non-controlling interests were GBP0.5m (2019: GBP0.6m).

Financing

The Group's treasury function is managed centrally and the Group's financial risk management policies are set out in note 23 of the Annual Report.

 
                                2020     2019 
                                GBPm     GBPm 
 Cash and cash equivalents      20.8     17.6 
 Pilot bonds                   (1.0)    (1.5) 
---------------------------  -------  ------- 
 Adjusted cash                  19.8     16.1 
---------------------------  -------  ------- 
 
 Overdraft facilities         (22.1)   (17.9) 
 Invoice financing             (4.9)    (6.9) 
 Bank loans                    (6.4)   (10.4) 
---------------------------  -------  ------- 
 Total borrowings             (33.4)   (35.2) 
---------------------------  -------  ------- 
 
 Adjusted net debt            (13.6)   (19.1) 
---------------------------  -------  ------- 
 

Adjusted net debt at 31 December 2020 decreased to GBP13.6m (2019: GBP19.1m) reflecting the cash flows discussed above. Adjusted net debt excludes cash of GBP1.0m (2019: GBP1.5m) held to match pilot bonds within our aviation business. Where required by the client, pilot bonds are taken at the start of the pilot's contract and are repayable to the pilot or the client during the course of the contract or if it ends early. There is no legal restriction over this cash, but given the requirement to repay it over a three-year period, and that to hold these is a client requirement, we exclude cash equal to the amount of the bonds when calculating our adjusted net debt measure. The level of bonds held has continued to reduce during the year, reflecting the drop in the level of activity in that business. These movements have no impact on our adjusted net debt measure.

During 2020, the month-end average adjusted net debt position was GBP12.8m (2019: GBP18.7m) with a high of GBP17.7m at 31 March (2019: GBP23.0m at 30 September) and a low of GBP8.9m at 30 June (2019: GBP15.3m at 31 January).

Our debt to debtors ratio (adjusted net debt as a percentage of trade receivables) has reduced to 37% (2019: 42%) with the reduction in adjusted net debt more than offsetting the fall in trade receivables. We continue to be focused on reducing our debt levels with the aim of lowering the debt to debtor ratio to 25%.

Total borrowings were GBP33.4m (2019: GBP35.2m) being bank overdrafts of GBP22.1m (2019: GBP17.9m), invoice financing of GBP4.9m (2019: GBP6.9m) and bank loans of GBP6.4m (2019: GBP10.4m). The Group's borrowings are principally held to fund working capital requirements and are predominantly due within one year. As at 31 December 2020, GBP1.2m of borrowings are shown as non-current.

The Group maintains a range of facilities to manage its working capital and financing requirements. At 31 December 2020 the Group had facilities totalling GBP57.3m (2019: GBP55.1m).

 
                                        2020   2019 
                                        GBPm   GBPm 
 UK facilities 
   Overdrafts                           10.0    7.5 
   Revolving credit facility            15.0   14.0 
   Invoice financing facility           10.0   13.0 
                                       -----  ----- 
 Total UK facilities                    35.0   34.5 
 Continental Europe facilities          12.9   12.2 
 Asia Pacific facilities                 3.2    2.4 
 Americas facilities                     6.2    6.0 
                                       -----  ----- 
                                        57.3   55.1 
                                       -----  ----- 
 Undrawn facility (excluding invoice 
  financing)                            17.6   11.5 
                                       -----  ----- 
 
 

During the year the revolving credit facility was extended to GBP15.0m from GBP14.0m by activating the remaining GBP1.0m of the GBP5.0m accordion arrangement in order to purchase additional shares in ConSol Partners in May. During the year the UK invoice financing facility was reduced to GBP10.0m following the closure of a substantial part of our UK engineering business at the end of 2019 which reduced our financing requirements.

In the second quarter of 2020, when uncertainty over the impact of COVID-19 was at its highest, the Group agreed a precautionary GBP2.5m increase in its UK overdraft facility. Alongside this, the Group agreed a relaxation of the covenant tests on the revolving credit facility for the remainder of its term. These covenants are tested on a quarterly basis and have been met throughout the period, even if measured against the original unadjusted covenants. The covenants, and our performance against them as at 31 December 2020, are as follows:

 
 Covenant               Target (original)    Target (adjusted)   Actual 
 Net debt: EBITDA             < 2.5 times          < 4.5 times      0.8 
 Interest cover               > 5.0 times          > 3.0 times     10.4 
 Debt service cover          > 1.25 times         > 1.25 times      5.6 
 

Subsequent to the reporting date, in March 2021, the revolving credit facility was refinanced. The facility continues to be for GBP15.0m and has a 2.5 year term to September 2023. For more details see note 11.

Management equity

As highlighted in our 2019 Annual Report, the Group has moved away from issuing second generation equity schemes for incoming management and has put in place appropriate alternative incentive schemes. Existing shareholdings and commitments remain in place and continue to be reflected in these accounts.

Based on results for the year ended 31 December 2020, and using applicable valuation mechanisms in shareholders' agreements but ignoring any holding period requirements, the payment to acquire all those shares not held by Empresaria would be approximately GBP9.0m were the maximum valuation multiples to apply. Of this, approximately 98% relates to first generation shares accounted for as non-controlling interests in the consolidated financial statements. There is no legal obligation on the Group to acquire the shares held by management at any time. Further information on the management equity scheme is provided in note 27 to the annual report.

During the year the Group acquired the remaining shares in ConSol Partners for consideration of GBP1.7m taking our ownership to 100%. Other shares were acquired from management across a number of subsidiaries for total consideration of GBP0.4m. Further details are provided in note 4.

Dividend

In April 2020, as it became clear that COVID-19 had the potential to significantly impact the global economy and the prospects of the Group, the Board considered it prudent to cancel the proposed dividend in respect of the year ended 31 December 2019 in order to strengthen the Group's balance sheet and aid liquidity.

The economic environment has begun to stabilise and, while COVID-19 continues to have a significant negative impact on the global economy, most businesses, including Empresaria, have found ways of working effectively in the new normal. The resilience of the Group and the strength of its balance sheet were evident throughout 2020 and as a result the Board is proposing a dividend of 1.0p per share for the year ended 31 December 2020. Subject to shareholder approval at the Annual General Meeting, the dividend will be paid on 4 June 2021 to shareholders on the register on 14 May 2021.

Going concern

The Board has undertaken a recent and thorough review of the Group's budget, forecasts and associated risks and sensitivities, which included consideration of the potential ongoing impact of COVID-19. Given the business forecasts and early trading performance, 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. Further details on going concern are found in note 1 in the annual report.

Tim Anderson

Chief Financial Officer

17 March 2021

Consolidated income statement

 
                                                                                                        2020 
                                                                                                   unaudited      2019 
                                                                                           Note         GBPm      GBPm 
 
 Revenue                                                                                    2          256.5     358.0 
 Cost of sales                                                                                       (202.5)   (283.5) 
 Net fee income                                                                             2           54.0      74.5 
 Administrative costs (including GBP0.6m (2019: GBP0.6m) in respect of trade receivable 
  impairment 
  losses)                                                                                             (47.8)    (64.1) 
                                                                                                 -----------  -------- 
 Adjusted operating profit                                                                  2            6.2      10.4 
 Exceptional items                                                                          3          (0.2)     (2.1) 
 Fair value charge on acquisition of non-controlling shares                                 4          (0.3)         - 
 Impairment of goodwill                                                                     9          (1.6)     (2.5) 
 Impairment of other intangible assets                                                      10         (3.4)         - 
 Amortisation of intangible assets identified in business combinations                      10         (1.7)     (1.8) 
                                                                                                 -----------  -------- 
 Operating (loss)/profit                                                                               (1.0)       4.0 
                                                                                                 -----------  -------- 
 Finance income                                                                             5            0.2       0.2 
 Finance costs                                                                              5          (1.2)     (1.3) 
                                                                                                 -----------  -------- 
 Net finance costs                                                                          5          (1.0)     (1.1) 
 (Loss)/profit before tax                                                                              (2.0)       2.9 
 Taxation                                                                                   6          (1.2)     (2.4) 
 (Loss)/profit for the year                                                                            (3.2)       0.5 
                                                                                                 -----------  -------- 
 
 Attributable to: 
 Owners of Empresaria Group plc                                                                        (3.1)     (0.8) 
 Non-controlling interests                                                                             (0.1)       1.3 
                                                                                                 -----------  -------- 
                                                                                                       (3.2)       0.5 
                                                                                                 -----------  -------- 
 
                                                                                                       Pence     Pence 
 (Loss)/earnings per share 
 Basic                                                                                      8          (6.2)     (1.6) 
 Diluted                                                                                    8          (6.2)     (1.6) 
 
 

Details of adjusted earnings per share are shown in note 8.

Consolidated statement of comprehensive income

 
                                                                                                   2020 
                                                                                              unaudited    2019 
                                                                                                   GBPm    GBPm 
 
 (Loss)/profit for the year                                                                       (3.2)     0.5 
                                                                                            -----------  ------ 
 Other comprehensive income 
 Items that may be reclassified subsequently to the income statement: 
   Exchange differences on translation of foreign operations                                        0.4   (1.9) 
 Items that will not be reclassified to the income statement: 
   Exchange differences on translation of non-controlling interests in foreign operations         (0.1)   (0.3) 
                                                                                            -----------  ------ 
 Other comprehensive income/(loss) for the year                                                     0.3   (2.2) 
 Total comprehensive loss for the year                                                            (2.9)   (1.7) 
                                                                                            -----------  ------ 
 
 Attributable to: 
 Owners of Empresaria Group plc                                                                   (2.7)   (2.7) 
 Non-controlling interests                                                                        (0.2)     1.0 
                                                                                            -----------  ------ 
                                                                                                  (2.9)   (1.7) 
                                                                                            -----------  ------ 
 

Consolidated balance sheet

 
                                                                              2019 
                                                             2020         restated 
                                                        unaudited    and unaudited 
                                                Note         GBPm             GBPm 
 Non-current assets 
 Property, plant and equipment                                1.6              2.3 
 Right-of-use assets                                          9.0             10.2 
 Goodwill                                        9           32.5             33.5 
 Other intangible assets                         10          10.5             15.5 
 Deferred tax assets                                          2.8              2.4 
                                                      -----------  --------------- 
                                                             56.4             63.9 
                                                      -----------  --------------- 
 Current assets 
 Trade and other receivables                     13          44.9             55.2 
 Cash and cash equivalents                       12          20.8             17.6 
                                                      -----------  --------------- 
                                                             65.7             72.8 
                                                      -----------  --------------- 
 Total assets                                               122.1            136.7 
                                                      -----------  --------------- 
 
 Current liabilities 
 Trade and other payables                        14          33.4             37.7 
 Current tax liabilities                                      1.1              1.4 
 Borrowings                                      11          32.2             25.2 
 Lease liabilities                                            5.3              5.6 
                                                      -----------  --------------- 
                                                             72.0             69.9 
                                                      -----------  --------------- 
 Non-current liabilities 
 Borrowings                                      11           1.2             10.0 
 Lease liabilities                                            4.1              5.2 
 Deferred tax liabilities                                     2.4              3.6 
                                                      -----------  --------------- 
                                                              7.7             18.8 
                                                      -----------  --------------- 
 Total liabilities                                           79.7             88.7 
                                                      -----------  --------------- 
 Net assets                                                  42.4             48.0 
                                                      -----------  --------------- 
 
 Equity 
 Share capital                                                2.4              2.4 
 Share premium account                                       22.4             22.4 
 Merger reserve                                               0.9              0.9 
 Retranslation reserve                                        4.2              4.0 
 Equity reserve                                            (10.2)            (9.8) 
 Other reserves                                             (0.6)            (0.6) 
 Retained earnings                                           18.1             21.4 
                                                      -----------  --------------- 
 Equity attributable to owners of Empresaria 
  Group plc                                                  37.2             40.7 
 Non-controlling interests                                    5.2              7.3 
                                                      -----------  --------------- 
 Total equity                                                42.4             48.0 
                                                      -----------  --------------- 
 
 

Consolidated statement of changes in equity

 
                                                  Equity attributable to owners of Empresaria Group plc 
                   ------------------------------------------------------------------------------------ 
                                Share 
                      Share   premium    Merger   Retranslation    Equity      Other   Retained           Non-controlling    Total 
                    capital   account   reserve         reserve   reserve   reserves   earnings   Total         interests   equity 
                       GBPm      GBPm      GBPm            GBPm      GBPm       GBPm       GBPm    GBPm              GBPm     GBPm 
 
 Balance at 31 
  December 
  2018                  2.4      22.4       0.9             5.8     (7.7)      (0.7)       23.2    46.3               8.3     54.6 
                   --------  --------  --------  --------------  --------  ---------  ---------  ------  ----------------  ------- 
 (Loss)/profit 
  for the 
  year                    -         -         -               -         -          -      (0.8)   (0.8)               1.3      0.5 
 Exchange 
  differences 
  on translation 
  of foreign 
  operations              -         -         -           (1.8)         -      (0.1)          -   (1.9)             (0.3)    (2.2) 
                   --------  --------  --------  --------------  --------  ---------  ---------  ------  ----------------  ------- 
 Total 
  comprehensive 
  (loss)/income 
  for the 
  year                    -         -         -           (1.8)         -      (0.1)      (0.8)   (2.7)               1.0    (1.7) 
 Dividend paid to 
  owners 
  of Empresaria 
  Group 
  plc                     -         -         -               -         -          -      (1.0)   (1.0)                 -    (1.0) 
 Dividend paid to 
  non-controlling 
  interests               -         -         -               -         -          -          -       -             (0.6)    (0.6) 
 Acquisition of 
  non-controlling 
  shares                  -         -         -               -     (2.1)          -          -   (2.1)             (1.4)    (3.5) 
 Share-based 
  payments                -         -         -               -         -        0.2          -     0.2                 -      0.2 
 Balance at 31 
  December 
  2019                  2.4      22.4       0.9             4.0     (9.8)      (0.6)       21.4    40.7               7.3     48.0 
                   --------  --------  --------  --------------  --------  ---------  ---------  ------  ----------------  ------- 
 Loss for the 
  year                    -         -         -               -         -          -      (3.1)   (3.1)             (0.1)    (3.2) 
 Exchange 
  differences 
  on translation 
  of foreign 
  operations              -         -         -             0.2         -        0.2          -     0.4             (0.1)      0.3 
                   --------  --------  --------  --------------  --------  ---------  ---------  ------  ----------------  ------- 
 Total 
  comprehensive 
  income/(loss) 
  for the 
  year                    -         -         -             0.2         -        0.2      (3.1)   (2.7)             (0.2)    (2.9) 
 Dividend paid to 
  non-controlling 
  interests               -         -         -               -         -          -          -       -             (0.5)    (0.5) 
 Acquisition of 
  non-controlling 
  shares                  -         -         -               -     (0.4)          -          -   (0.4)             (1.4)    (1.8) 
 Purchase of own 
  shares 
  in Employee 
  Benefit 
  Trust                   -         -         -               -         -          -      (0.2)   (0.2)                 -    (0.2) 
 Share-based 
  payments                -         -         -               -         -      (0.2)          -   (0.2)                 -    (0.2) 
 Balance at 31 
  December 
  2020 
  (unaudited)           2.4      22.4       0.9             4.2    (10.2)      (0.6)       18.1    37.2               5.2     42.4 
                   --------  --------  --------  --------------  --------  ---------  ---------  ------  ----------------  ------- 
 

Consolidated cash flow statement

 
                                                                2020 
                                                           unaudited     2019 
                                                                GBPm     GBPm 
 (Loss)/profit for the year                                    (3.2)      0.5 
 Adjustments for: 
   Depreciation of property, plant and equipment 
    and software amortisation                                    1.1      1.2 
   Depreciation of right-of-use assets                           6.3      6.4 
   Fair value charge on acquisition of non-controlling 
    shares                                                       0.3        - 
   Impairment of goodwill                                        1.6      2.5 
   Impairment of other intangible assets                         3.4        - 
   Amortisation of intangible assets identified 
    in business combinations                                     1.7      1.8 
   Share-based payments                                        (0.2)      0.2 
   Net finance costs                                             1.0      1.1 
   Taxation                                                      1.2      2.4 
                                                         -----------  ------- 
                                                                13.2     16.1 
   Decrease in trade and other receivables                      10.9      0.3 
   Decrease in trade and other payables (including 
    pilot bonds outflow of GBP0.5m (2019: GBP3.8m))            (5.8)    (2.0) 
 Cash generated from operations                                 18.3     14.4 
 Interest paid                                                 (1.1)    (1.3) 
 Income taxes paid                                             (3.0)    (5.6) 
                                                         -----------  ------- 
 Net cash inflow from operating activities                      14.2      7.5 
                                                         -----------  ------- 
 
 Cash flows from investing activities 
 Consideration paid for business acquisitions 
  (net of cash acquired)                                       (0.1)    (0.2) 
 Purchase of property, plant and equipment, and 
  software                                                     (0.7)    (1.5) 
 Finance income                                                  0.2      0.2 
                                                         -----------  ------- 
 Net cash outflow investing activities                         (0.6)    (1.5) 
                                                         -----------  ------- 
 
 Cash flows from financing activities 
 Increase/(decrease) in overdrafts                               3.8    (3.6) 
 Proceeds from bank loans                                        1.8      5.0 
 Repayment of bank loans                                       (5.7)    (0.2) 
 Decrease in invoice financing                                 (2.0)    (2.7) 
 Payment of obligations under leases                           (6.2)    (6.5) 
 Purchase of shares in existing subsidiaries                   (1.5)    (3.5) 
 Purchase of own shares in Employee Benefit Trust              (0.2)        - 
 Dividends paid to owners of Empresaria Group 
  plc                                                              -    (1.0) 
 Dividends paid to non-controlling interests                   (0.5)    (0.6) 
                                                         -----------  ------- 
 Net cash outflow from financing activities                   (10.5)   (13.1) 
                                                         -----------  ------- 
 
 Net increase/(decrease) in cash and cash equivalents            3.1    (7.1) 
 Foreign exchange movements                                      0.1    (0.7) 
 Cash and cash equivalents at beginning of the 
  year                                                          17.6     25.4 
 Cash and cash equivalents at end of the year                   20.8     17.6 
                                                         -----------  ------- 
 
 
                                                        2020 
                                                   unaudited     2019 
                                                        GBPm     GBPm 
 Bank overdrafts at beginning of the year             (17.9)   (22.0) 
 (Increase)/decrease in the year                       (3.8)      3.6 
 Foreign exchange movements                            (0.4)      0.5 
                                                 -----------  ------- 
 Bank overdrafts at end of the year                   (22.1)   (17.9) 
 Cash, cash equivalents and bank overdrafts at 
  end of the year                                      (1.3)    (0.3) 
                                                 -----------  ------- 
 
   1     Basis of  preparation   and general information 

The financial information set out above does not constitute the Company's consolidated statutory accounts for the years ended 31 December 2020 or 2019. The financial information for the year ended 31 December 2019 is derived from the statutory accounts for that year and restated for the prior year adjustment outlined below. Statutory accounts for 2019 have been delivered to the Registrar of Companies. The Auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their reports and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation. The audit of the statutory accounts for the year ended 31 December 2020 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

Accounting policies have been applied consistently with those set out in the 2019 financial statements, as amended when relevant to reflect the adoption of new standards, amendments and interpretations which became effective in the year. During 2020 no new standards, amendments or interpretations had a significant impact on the financial statements.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ('IFRS'), this announcement does not itself contain sufficient financial information to comply with IFRS. The Group will be publishing full financial statements that comply with IFRS in April 2021.

2019 financial information has been restated to reflect an error in the accounting for leases in 2019, the first year of transition to IFRS 16 Leases. This has resulted in a reduction in the net book value of right-of-use assets as at 31 December 2019 of GBP0.4m and a reduction in the current lease liability of GBP0.4m. There is no impact on net assets as at 31 December 2019, nor on profit for the year ended 31 December 2019. As the Group applied the modified retrospective approach to the adoption of IFRS 16, there is no impact on the 31 December 2018 balance sheet.

   2     Segment and revenue analysis 

Information reported to the Group's Executive Committee, considered to be the chief operating decision maker of the Group for the purpose of resource allocation and assessment of segment performance, is based on the Group's six operating sectors.

The Group has one principal activity, the provision of staffing and recruitment services, delivered across a number of service lines, being permanent placement, temporary and contract placement, and offshore recruitment services.

The analysis of the Group's results by sector is set out below:

 
                                          2020                      2019 
                                                   Adjusted                         Adjusted 
                                       Net fee    operating             Net fee    operating 
                             Revenue    income       profit   Revenue    income       profit 
                                GBPm      GBPm         GBPm      GBPm      GBPm         GBPm 
 Professional                   55.3      15.4          0.2     125.0      27.3          3.5 
 IT                             41.8      12.7          1.8      45.2      14.4          3.2 
 Healthcare                     13.2       2.5          0.4      11.3       2.8          0.5 
 Property, Construction 
  & Engineering                  3.6       0.7        (0.2)      22.4       3.8        (1.2) 
 Commercial                    132.3      17.2          4.6     142.4      19.7          5.4 
 Offshore Recruitment 
  Services                      10.9       6.1          2.6      12.2       7.0          3.2 
 Central costs                     -         -        (3.2)         -         -        (4.2) 
 Intragroup eliminations       (0.6)     (0.6)            -     (0.5)     (0.5)            - 
                            --------  --------  -----------  --------  --------  ----------- 
                               256.5      54.0          6.2     358.0      74.5         10.4 
                            --------  --------  -----------  --------  --------  ----------- 
 
 
   3     Exceptional items 

Exceptional items are those items that in the Directors' view are required to be separately disclosed by virtue of their size, nature or incidence. Adjusted operating profit, adjusted profit before tax and adjusted earnings are considered to be key measures in understanding the Group's financial performance and exclude exceptional items.

 
                                                     2020   2019 
                                                     GBPm   GBPm 
 Restructuring of UK engineering business               -    1.1 
 Restructuring of marketing and digital business    (0.1)    0.5 
 Change of Chief Executive Officer                  (0.2)    0.5 
 Closure of Mexico operation                          0.2      - 
 Restructure of senior management                     0.3      - 
                                                   ------  ----- 
                                                      0.2    2.1 
                                                   ------  ----- 
 
   4     Shares acquired in existing subsidiaries 

In 2020, the Group acquired a further 17.5% interest in ConSol Partners (Holdings) Limited ('ConSol'), an existing subsidiary, taking its total interest to 100%. The shares were acquired for consideration of GBP1.7m, with GBP1.1m paid in 2020 and the balance to be paid in April 2021. The terms were substantially reduced from the acquisition of shares in 2016 and 2019, reflecting both the founders' desire to sell their remaining shares now they were no longer directly involved in the business and all parties' appreciation of the impact of COVID-19. ConSol is a specialist recruitment business in the IT sector with a focus on niche sectors across communications, cloud and digital.

Combined with other minor acquisitions of shareholdings accounted for as non-controlling interest, these transactions were recorded within equity as a movement in non-controlling interests of GBP1.4m and the remaining GBP0.4m was recorded in the equity reserve.

A number of smaller shareholdings were acquired from management during the year, principally on their exit from the Group, for consideration totalling GBP0.3m. These shareholdings were not accounted for as non-controlling interests and the GBP0.3m cost has been recognised in the income statement as fair value charge on acquisition of non-controlling shares.

   5     Finance income and costs 
 
                                2020    2019 
                                GBPm    GBPm 
 Finance income 
 Bank interest receivable        0.2     0.2 
                              ------  ------ 
                                 0.2     0.2 
                              ------  ------ 
 Finance costs 
 Invoice financing             (0.1)   (0.2) 
 Bank loans and overdrafts     (0.5)   (0.6) 
 Interest on lease payments    (0.4)   (0.4) 
 Interest on tax payments      (0.2)   (0.1) 
                              ------  ------ 
                               (1.2)   (1.3) 
                              ------  ------ 
 
 Net finance costs             (1.0)   (1.1) 
                              ------  ------ 
 
   6     Taxation 

The tax expense for the year is as follows:

 
                                                       2020    2019 
                                                       GBPm    GBPm 
 Current tax 
 Current year income tax expense                        2.9     3.8 
 Adjustment in respect of prior years                 (0.1)     0.2 
                                                     ------  ------ 
 Total current tax expense                              2.8     4.0 
 Deferred tax 
 Deferred tax credit - on origination and reversal 
  of temporary differences                            (1.6)   (1.6) 
                                                     ------  ------ 
 Total income tax expense in the income statement       1.2     2.4 
                                                     ------  ------ 
 
   7     Reconciliation of adjusted profit before tax to profit before tax 
 
                                                         2020   2019 
                                                         GBPm   GBPm 
 (Loss)/profit before tax                               (2.0)    2.9 
 Exceptional items                                        0.2    2.1 
 Fair value charge on acquisition of non-controlling 
  shares                                                  0.3      - 
 Impairment of goodwill                                   1.6    2.5 
 Impairment of other intangible assets                    3.4      - 
 Amortisation of intangible assets identified in 
  business combinations                                   1.7    1.8 
                                                       ------  ----- 
 Adjusted profit before tax                               5.2    9.3 
                                                       ------  ----- 
 
   8     Earnings per share 

Basic earnings per share is assessed by dividing the earnings attributable to the owners of Empresaria Group plc by the weighted average number of shares in issue during the year. Diluted earnings per share is calculated as for basic earnings per share but adjusting the weighted average number of shares for the diluting impact of shares that could potentially be issued. For 2020 and 2019 these are all related to share options. Reconciliations between basic and diluted measures are given below.

The Group also presents adjusted earnings per share which it considers to be a key measure of the Group's performance. A reconciliation of earnings to adjusted earnings is provided below.

 
                                                                  2020       2019 
                                                                  GBPm       GBPm 
 Earnings attributable to owners of Empresaria 
  Group plc                                                      (3.1)      (0.8) 
 Adjustments: 
       Exceptional items                                           0.2        2.1 
       Fair value charge on acquisition of non-controlling 
        shares                                                     0.3          - 
       Impairment of goodwill                                      1.6        2.5 
       Impairment of other intangible assets                       3.4          - 
       Amortisation of intangible assets identified in 
        business combinations                                      1.7        1.8 
       Tax on the above                                          (1.2)      (1.0) 
       Non-controlling interests in respect of the above         (0.8)      (0.2) 
                                                             ---------  --------- 
 Adjusted earnings                                                 2.1        4.4 
                                                             ---------  --------- 
 
 Number of shares                                             Millions   Millions 
 Weighted average number of shares- basic                         50.3       50.4 
 Dilution effect of share options                                  1.3        1.0 
                                                             ---------  --------- 
 Weighted average number of shares- diluted                       51.6       51.4 
                                                             ---------  --------- 
 
 Earnings per share                                              Pence      Pence 
 Basic                                                           (6.2)      (1.6) 
 Dilution effect of share options                                    -          - 
                                                             ---------  --------- 
 Diluted                                                         (6.2)      (1.6) 
                                                             ---------  --------- 
 
 Adjusted earnings per share                                     Pence      Pence 
 Basic                                                             4.2        8.6 
 Dilution effect of share options                                (0.1)      (0.1) 
                                                             ---------  --------- 
 Diluted                                                           4.1        8.5 
                                                             ---------  --------- 
 

All share options are anti-dilutive for the purpose of assessing diluted earnings per share in accordance with IAS 33 Earnings Per Share. As such, diluted earnings per share and basic earnings per share are equal. As these options are nil-cost options these have been reflected as dilutive in assessing adjusted, diluted earnings per share presented above.

The weighted average number of shares (basic) has been calculated as the weighted average number of shares in issue during the year plus the number of share options already vested less the weighted average number of shares held by the Empresaria Employee Benefit Trust. The Trustees have waived their rights to dividends on the shares held by the Empresaria Employee Benefit Trust.

   9     Goodwill 
 
                                2020    2019 
                                GBPm    GBPm 
 At 1 January                   33.5    37.1 
 Impairment charge             (1.6)   (2.5) 
 Foreign exchange movements      0.6   (1.1) 
                              ------  ------ 
 At 31 December                 32.5    33.5 
                              ------  ------ 
 

Goodwill is reviewed and tested for impairment on an annual basis or more frequently if there is an indication that goodwill might be impaired. Goodwill has been tested for impairment by comparing the carrying amount of the group of cash-generating units ('CGUs') the goodwill has been allocated to, with the recoverable amount of those CGUs. The recoverable amounts of the CGUs are considered to be their value in use. The key assumptions in assessing value in use are as follows:

Operating profit and pre-tax cash flows

The operating profit and pre-tax cash flows are based on the 2021 budgets approved by the Group's Board. The budgets were reviewed in light of the ongoing impact of COVID-19 and adjusted as required. These adjusted budgets are extrapolated using short-term industry growth rate forecasts and long-term growth rates and margins that are consistent with the business plans approved by the Group's Board. These cash flows are discounted to present value to assess the value in use.

Discount rates

The pre-tax, country-specific rates used to discount the forecast cash flows range from 9.2% to 16.9% (2019: 9.0% to 16.1%) reflecting current local market assessments of the time value of money and the risks specific to the relevant business. These discount rates reflect the estimated industry weighted average cost of capital in each market and are based on the Group's weighted average cost of capital adjusted for local factors.

Pre-tax discount rates used by sector are as follows:

 
 Professional: 10.0% to 16.9% (2019: 9.0% 
  to 16.1%) 
 IT: 9.5% to 11.3% (2019: 9.6% to 11.7%) 
 Healthcare: 9.8% to 12.3% (2019: 10.5% to 
  10.6%) 
 Property, Construction & Engineering: 11.0% 
  (2019: 10.5%) 
 Commercial: 9.2% to 16.0% (2019: 9.0% to 
  13.7%) 
 Offshore Recruitment Services: 16.6% (2019: 
  15.4%) 
 

Growth rates

The growth rates used to extrapolate beyond the most recent budgets and forecasts and to determine terminal values are based upon IMF GDP growth forecasts for 2022 and the IMF longer-term expectation for global growth of 2.6% which is then adjusted to reflect the specific markets we are in. Longer-term growth rates used range from 1.0% to 3.0%. GDP growth is a key driver of our business and is therefore an appropriate assumption in developing long-term forecasts.

Long-term growth rates used by sector are as follows:

 
 Professional: 2.0% to 3.0% (2019: 1.5% to 
  5.7%) 
 IT: 1.0% to 2.0% (2019: 0.5% to 3.8%) 
 Healthcare: 2.0% (2019: 1.4% to 1.5%) 
 Property, Construction & Engineering: 2.0% 
  (2019: 1.5%) 
 Commercial: 1.0% to 2.0% (2019: 0.5% to 
  3.9%) 
 Offshore Recruitment Services: 2.0% (2019: 
  6.0%) 
 

In 2020, an impairment charge of GBP1.6m has been recognised in respect of a business in the Professional sector which has been heavily impacted by the decline in the aviation industry due to the impact of COVID-19. Before the impairment charge was recognised the carrying value of the goodwill was GBP3.7m and the recoverable amount, based on value in use, was assessed as GBP2.1m.

In 2019, an impairment charge of GBP2.5m was recognised in respect of a business in the Property, Construction & Engineering sector following the decision to close a substantial part of it, reducing the carrying amount of goodwill in respect of that business to nil.

As part of the impairment review, reasonably possible changes in the growth rate and discount rate assumptions have been considered to assess the impact on the recoverable amount of each business. Were the long-term growth rate to reduce to nil no impairment charge would be recorded (2019: GBPnil), while if the discount rate were to increase by 2% an impairment charge of GBP0.5m would be recorded in respect of one business in our Professional sector (2019: GBPnil).

   10    Other intangible assets 
 
                                   Intangible assets identified 
                                      in business combinations 
                              -------------------------------------- 
                                                   Trade 
                                     Customer      names 
                                relationships    & marks   Sub Total   Software   Total 
                                         GBPm       GBPm        GBPm       GBPm    GBPm 
 Cost 
 At 1 January                            14.2        9.1        23.3        1.0    24.3 
 Additions                                0.1          -         0.1        0.2     0.3 
 Foreign exchange movements               0.1      (0.1)           -          -       - 
                              ---------------  ---------  ----------  ---------  ------ 
 At 31 December                          14.4        9.0        23.4        1.2    24.6 
                              ---------------  ---------  ----------  ---------  ------ 
 
 Accumulated amortisation 
 At 1 January                             5.5        2.5         8.0        0.8     8.8 
 Charge for the year                      1.3        0.4         1.7        0.1     1.8 
 Impairment                               2.8        0.6         3.4          -     3.4 
 Foreign exchange movements               0.1          -         0.1          -     0.1 
                              ---------------  ---------  ----------  ---------  ------ 
 At 31 December                           9.7        3.5        13.2        0.9    14.1 
                              ---------------  ---------  ----------  ---------  ------ 
 
 Net book value 
                              ---------------  ---------  ----------  ---------  ------ 
 At 31 December 2019                      8.7        6.6        15.3        0.2    15.5 
                              ---------------  ---------  ----------  ---------  ------ 
 At 31 December 2020                      4.7        5.5        10.2        0.3    10.5 
                              ---------------  ---------  ----------  ---------  ------ 
 

As required under IFRS, the Group reviewed its assets for indications of impairment as at 31 December 2020. The current global economic environment has had a significant impact on the Group, reducing revenues and profits in the short term to varying degrees in many businesses across the Group. Where businesses have been adversely impacted and this is significant enough to be considered an indication of impairment of these intangible assets, an impairment review has been carried out.

As a result of those impairment reviews, an impairment charge of GBP3.4m has been booked in respect of an operation in our Professional sector which supplies the aviation industry. This industry has been hit hard by COVID-19 and we do not expect a short-term recovery to pre-COVID levels. The decline in net fee income, particularly with those customers present on acquisition and included in the customer relationship intangible asset, is the prime driver of this impairment.

   11    Borrowings 
 
                      2020   2019 
                      GBPm   GBPm 
 Current 
 Bank overdrafts      22.1   17.9 
 Invoice financing     4.9    6.9 
 Bank loans            5.2    0.4 
                     -----  ----- 
                      32.2   25.2 
                     -----  ----- 
 Non-current 
 Bank loans            1.2   10.0 
                     -----  ----- 
                       1.2   10.0 
                     -----  ----- 
 Borrowings           33.4   35.2 
                     -----  ----- 
 

The following key bank facilities are in place at 31 December 2020:

A revolving credit facility of GBP15.0m, expiring in June 2021. As at 31 December 2020 the amount outstanding is GBP5.0m (2019: GBP10.0m). Interest is payable at 1.5% plus LIBOR or EURIBOR. During the year, the remaining GBP1.0m of the GBP5.0m extension to the revolving credit facility was activated, increasing the facility to GBP15.0m. The revolving credit facility is subject to financial covenants and these are disclosed in the Finance Review. In March 2021 the revolving credit facility was refinanced. The new facility of GBP15.0m expires in September 2023. LIBOR is currently in the process of being phased out and therefore this new facility will be based on the SONIA (Sterling Over Night Index Average) interest rate. The margin on the facility will vary based on the Group's net debt to EBITDA ratio and will range from 2.0% to 3.0%.

Overdraft facilities are in place in the UK with a limit of GBP10.0m, which was increased from GBP7.5m in the first half of 2020. The balance on this facility as at 31 December 2020 was GBP7.4m (2019: GBP5.9m). The interest rate was fixed at 1% above applicable currency base rates. A $2.0m overdraft facility to provide working capital funding in the United States had a balance as at 31 December 2020 of $2.0m (2019: $1.5m). Interest on this USD facility is payable at 2% over LIBOR. A EUR13.0m (2019: EUR13.0m) overdraft facility is in place in Germany. The balance at 31 December 2020 was EUR11.6m (2019: EUR10.9m). Interest is payable at EURIBOR plus 2.3%. A NZ$2.0m overdraft facility is in place in New Zealand. The overdraft has not been utilised and attracts interest at 2% over the base lending rate. Bank overdrafts in the table reflects the requirement under IFRS to gross up certain cash and overdraft balances which are netted for banking facility purposes. This amount is GBP6.5m in 2020 (2019: GBP1.7m).

The UK facilities are secured by a first fixed charge over all book and other debts given by the Company and certain of its UK, German and New Zealand subsidiaries.

There is an invoice financing facility in the UK of GBP10.0m (2019: GBP13.0m). As at 31 December 2020 the amount outstanding was GBP3.3m (2019: GBP6.0m). Interest is payable at 1.47% over UK base rate. Following the Group's decision to close a substantial part of the UK engineering business, the invoice financing facility was reduced to GBP10.0m in March 2020. There are also invoice financing facilities in Chile of GBP4.0m (2019: GBP4.0m). As at 31 December 2020 the amount outstanding was GBP1.6m (2019: GBP0.8m). Interest is payable at approximately 5.5%.

   12    Net debt 

a) Net debt

 
                                2020     2019 
                                GBPm     GBPm 
 Borrowings                   (33.4)   (35.2) 
 Cash and cash equivalents      20.8     17.6 
                             -------  ------- 
 Net debt                     (12.6)   (17.6) 
                             -------  ------- 
 

Cash and cash equivalents at 31 December 2019 includes cash of GBP0.5m (2019: GBP0.3m) held by a subsidiary in China which is subject to currency exchange restrictions.

b) Adjusted net debt

 
                                               2020     2019 
                                               GBPm     GBPm 
 Cash and cash equivalents                     20.8     17.6 
 Less cash held in respect of pilot bonds     (1.0)    (1.5) 
                                            -------  ------- 
 Adjusted cash                                 19.8     16.1 
 Borrowings                                  (33.4)   (35.2) 
                                            -------  ------- 
 Adjusted net debt                           (13.6)   (19.1) 
                                            -------  ------- 
 

The Group presents adjusted net debt as its principal debt measure. Adjusted net debt is equal to net debt excluding cash held in respect of pilot bonds within our aviation business. Where required by the client, pilot bonds are taken at the start of the pilot's contract and are repayable to the pilot or the client during the course of the contract or if it ends early. There is no legal restriction over this cash, but given the requirement to repay it over a three-year period, and that to hold these is a client requirement, cash equal to the amount of the bonds is excluded in calculating adjusted net debt.

c) Movement in adjusted net debt

 
                                                           2020     2019 
                                                           GBPm     GBPm 
 At 1 January                                            (19.1)   (17.1) 
 Net increase/(decrease) in cash and cash equivalents 
  per consolidated cash flow statement                      3.1    (7.1) 
 Decrease/(increase) in overdrafts and loans                0.1    (1.2) 
 Decrease in invoice financing                              2.0      2.7 
 Foreign exchange movement                                (0.2)    (0.2) 
 Adjusted for decrease in cash held in respect 
  of pilot bonds                                            0.5      3.8 
                                                        -------  ------- 
 At 31 December                                          (13.6)   (19.1) 
                                                        -------  ------- 
 
   13    Trade and other receivables 
 
                                    2020    2019 
                                    GBPm    GBPm 
 Current 
 Gross trade receivables            37.9    46.3 
 Less provision for impairment 
  of trade receivables             (0.9)   (0.7) 
                                  ------  ------ 
 Trade receivables                  37.0    45.6 
 Prepayments                         1.5     1.7 
 Accrued income                      3.6     4.6 
 Corporation tax receivable          1.0     1.0 
 Other receivables                   1.8     2.3 
                                  ------  ------ 
                                    44.9    55.2 
                                  ------  ------ 
 

Trade receivables include GBP22.5m (2019: GBP31.8m) on which security has been given as part of bank facilities.

   14    Trade and other payables 
 
                                        2020   2019 
                                        GBPm   GBPm 
 Current 
 Trade payables                          1.6    2.1 
 Other tax and social security           8.0    7.4 
 Pilot bonds                             1.0    1.5 
 Client deposits                         0.4    0.6 
 Temporary recruitment worker wages      4.3    4.0 
 Other payables                          1.3    1.6 
 Accruals                               16.2   20.5 
 Deferred consideration                  0.6      - 
                                       -----  ----- 
                                        33.4   37.7 
                                       -----  ----- 
 

Pilot bonds represent unrestricted funds held by our aviation business at the request of clients that are repayable to the pilot over the course of a contract, typically between three and five years. If the pilot terminates their contract early, the outstanding bond is payable to the client. For this reason the bonds are shown as a current liability. As at 31 December 2020, if the bonds were to be repaid in line with existing contracts, GBP0.6m (2019: GBP1.1m) would be repayable in more than one year.

   15    Dividends 
 
                                                                                               2020   2019 
                                                                                               GBPm   GBPm 
 Amount recognised as distribution to equity holders in the year: 
     Final dividend for the year ended 31 December 2019 of nil (2018: 2.0p) per share             -    1.0 
                                                                                             ------  ----- 
 
 Proposed final dividend for the year ended 31 December 2020 of 1.0p (2019: nil) per share      0.5      - 
                                                                                             ------  ----- 
 

In April 2020, as it became clear that COVID-19 had the potential to significantly impact the global economy and the prospects of the Group, the Board considered it prudent to cancel the dividend in respect of the year ended 31 December 2019 that had been initially proposed and disclosed in our 2019 Annual Report, in order to strengthen the Group's balance sheet and aid liquidity.

The proposed final dividend for the year ended 31 December 2020 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR SFUEFWEFSEID

(END) Dow Jones Newswires

March 18, 2021 03:00 ET (07:00 GMT)

Empresaria (LSE:EMR)
Gráfica de Acción Histórica
De Abr 2022 a May 2022 Haga Click aquí para más Gráficas Empresaria.
Empresaria (LSE:EMR)
Gráfica de Acción Histórica
De May 2021 a May 2022 Haga Click aquí para más Gráficas Empresaria.