TIDMEMR
RNS Number : 6318V
Empresaria Group PLC
11 August 2022
11 August 2022
Empresaria Group plc ("Empresaria" or "Group")
Unaudited Interim Results for the six months ended 30 June
2022
Increase in adjusted operating profit and solid net fee income
growth
Empresaria Group plc (AIM: EMR), the global specialist staffing
group, is pleased to announce its unaudited interim results for the
six months ended 30 June 2022.
Overview of the half year
% change
(constant
2022 2021 % change currency)(2)
------------------------------ ---------- ---------- ----------- --------------
Revenue GBP129.8m GBP129.8m +0% +1%
Net fee income GBP32.6m GBP28.4m +15% +15%
Adjusted operating profit(1) GBP4.5m GBP4.3m +5% +5%
Operating profit GBP3.8m GBP2.7m +41%
Adjusted profit before
tax(1) GBP4.0m GBP4.0m +0%
Profit before tax GBP3.3m GBP2.4m +38%
Adjusted, diluted earnings
per share(1) 3.7p 4.1p -10%
Diluted earnings per share 2.7p 1.6p +69%
-- Solid net fee income growth with benefits from diversification by geography and sector
o Up 15% year-on-year to GBP32.6m
o Offshore services up 94% year-on-year
o Permanent placement revenue up 23% year-on-year
o Strong growth in Professional across the UK and APAC
o Offset by the expected reduction in Healthcare after record
2021
-- Adjusted operating profit up 5% against prior year reflecting
ongoing investment to drive future growth
-- Adjusted, diluted earnings per share down 10% against prior
year due to stronger performances from operations with a higher
proportion of non-controlling interests
-- Adjusted net debt reduced by GBP3.2m to GBP10.8m with headroom increased to GBP14.8m
-- Targeted investment in headcount - Offshore Services up 36%,
the rest of the Group up 5% compared to 31 December 2021
1 Adjusted to exclude amortisation of intangible assets
identified in business combinations, impairment of goodwill and
other intangible assets, exceptional items, fair value charge 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 2021 results at the 2022 exchange rates.
Chief Executive Officer, Rhona Driggs, commented:
"We are pleased to report solid growth in net fee income and
further progress in growing our adjusted operating profit while
continuing to invest in our operations. We are seeing the benefits
of the investments we have made in our team, technology and
broadening our service offerings, with early successes from our RPO
(Recruitment Process Outsourcing) offering in APAC. These are key
to our future growth and the delivery of our medium-term adjusted
operating profit target of GBP20m. In the second half of the year
we will invest further in headcount to capitalise on current market
demand and we will also expand our capacity in Offshore Services as
we continue to see significant growth potential.
We are optimistic about the year ahead as the demand for talent
is strong despite the global macroeconomic uncertainties. Given the
diversified nature of our business and the strength of our new
senior leadership team, we are confident we will continue to
deliver on our strategic priorities and build on the positive
momentum we have seen in the first half. We expect profits for the
full year to be in line with market expectations. "
Investor presentation
In line with Empresaria's commitment to ensuring appropriate
communication structures are in place for all shareholders,
management will deliver an online presentation, available to all
existing and potential shareholders, on the interim results for the
six months ended 30 June 2022 via the Investor Meet Company
platform on Thursday 11 August 2022 at 4:30pm 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.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time.
- Ends -
Enquiries:
Empresaria Group plc via Alma PR
Rhona Driggs, Chief Executive Officer
Tim Anderson, Chief Financial Officer
Singer Capital Markets (Nominated
Adviser and Broker)
Shaun Dobson / James Moat 020 7496 3000
Alma PR (Financial PR) 020 3405 0205
Sam Modlin empresaria@almapr.com
Hilary Buchanan
The investor presentation of these results will be made
available during the course of today on Empresaria's website:
www.empresaria.com.
Notes for editors:
-- Empresaria Group plc is a global specialist staffing group.
We are driven by our purpose to positively impact the lives of
people, while delivering exceptional talent to our clients
globally. We offer temporary and contract recruitment, permanent
recruitment and offshore services across six sectors: Professional,
IT, Healthcare, Property, Construction & Engineering,
Commercial and Offshore Services.
-- Empresaria is structured in four regions (UK & Europe,
APAC, Americas and Offshore Services) and operates from locations
across the world including the four 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 visit www.empresaria.com.
Cautionary statement regarding forward-looking statements
This document may contain forward-looking statements which are
made in good faith and are based on current expectations or
beliefs, as well as assumptions about future events. You can
sometimes, but not always, identify these statements by the use of
a date in the future or such words as "will", "anticipate",
"estimate", "expect", "project", "intend", "plan", "should", "may",
"assume" and other similar words. By their nature, forward-looking
statements are inherently predictive and speculative and involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. You should not place
undue reliance on these forward-looking statements, which are not a
guarantee of future performance and are subject to factors that
could cause our actual results to differ materially from those
expressed or implied by these statements. Except as required by
applicable law or regulation, Empresaria undertakes no obligation
to update any forward-looking statements contained in this
document, whether as a result of new information, future events or
otherwise.
Finance and operating review
The Group has delivered a 15% year-on-year increase in net fee
income to GBP32.6m in the first half of 2022, with adjusted
operating profit growing by 5% to GBP4.5m. This performance has
been driven by a number of factors as set out below.
Excellent growth in Offshore Services
Our Offshore Services region has continued to go from strength
to strength and delivered the largest profit contribution of any of
our regions in H1. Headcount at 30 June 2022 increased by 36%
compared to 31 December 2021 and is now more than 2,700. Our
Offshore Services operation has two locations in India and a newly
opened centre in the Philippines, with its client base primarily in
the US and the UK. In 2022 we have seen very strong growth from our
UK clients with billable headcount up by a third during H1. The
pace of our growth with US clients has slowed with a reduction from
healthcare recruitment clients offsetting growth elsewhere.
However, our US pipeline remains strong and we are seeing
increasing demand for services out of our Philippines location. In
H2 we will be investing in our infrastructure in India to further
increase our headcount capacity to enable us to enter the next
phase of growth.
Ongoing benefits from diversification
Our diversification by geography and sector continues to deliver
benefits to the Group. As well as growth in Offshore Services we
saw strong performances across APAC in our Professional and IT
operations, in the UK in our Professional operations and in Germany
in our logistics business. Demand in many of our markets has been
strong, particularly for permanent placements where net fee income
increased by 23% year-on-year.
These positive performances more than offset any challenges
elsewhere. As expected, Healthcare decreased compared to 2021 when
our operations benefitted from significant COVID-19 vaccination and
testing related demand. More challenging conditions were also
experienced by our temporary staffing operation in Germany, which
has been impacted by client supply chain issues alongside increased
sickness levels which has reduced our margins.
Operational investments continue and are delivering benefits
As communicated in our annual report, we have been investing in
growing our sales and recruiting teams in operations where we see
significant opportunities for growth. Excluding Offshore Services,
our headcount has increased by 5% from 31 December 2021. Hiring in
certain markets has proven to be challenging due to the lack of
available talent and increased salary expectations for those
willing to move, however we have seen a recent increase in hiring
particularly in APAC. In addition, we have made good progress in
supplementing our recruitment teams with our offshore
resources.
We have continued with our technology investment with three
further operations going live on our front office system in H1. We
are starting to realise benefits from this investment as we
continue to focus on adoption and embedding improved operational
processes. The roll-out will continue in H2 alongside parallel
investments in complementary technology to help maximise
productivity.
We are also investing in expanding our service offering and have
seen early success in delivering RPO, particularly in our APAC
region.
Outlook
We have made a solid start to 2022 and remain on track to
deliver full year results in line with market expectations.
Global macroeconomic uncertainties are increasing and the impact
of growing inflation in many of our markets is yet to be fully
realised. However, we have yet to see any significant adverse
impact and demand from clients remains strong.
We have set an ambitious target of delivering adjusted operating
profit of GBP20m in the medium term and we will be updating on our
plans to achieve this in due course.
Regional Performance
As announced in last year's annual report, following the
appointment of regional leaders during 2021 the Group has moved to
a regional reporting structure.
Adjusted operating profit by region:
6 months 6 months
ended ended % change
30 June 30 June (constant
GBP'm 2022 2021 % change currency)
------------------- --------- --------- --------- -----------
UK & Europe 2.0 2.5 -20% -20%
APAC 0.5 0.5 +0% +0%
Americas 0.8 1.7 -53% -56%
Offshore Services 3.5 1.8 +94% +94%
Central costs (2.3) (2.2) +5% +5%
--------- ---------
Total 4.5 4.3 +5% +5%
--------- ---------
Performance in each of the regions is analysed below.
UK & Europe
6 months 6 months
ended ended % change
30 June 30 June (constant
GBP'm 2022 2021 % change currency)
--------------------------- --------- --------- --------- -----------
Revenue 63.2 67.9 -7% -5%
Net fee income 14.5 14.1 +3% +4%
Adjusted operating profit 2.0 2.5 -20% -20%
% of Group net fee income 44% 49%
UK & Europe saw mixed performances in H1 with total net fee
income increasing by 3% (4% in constant currency) but profits down
by 20%. Operations in the UK generally performed well, with NFI
increasing by 12% reflecting strong performances in our
Professional operations. Results from our UK IT operation have
continued to be disappointing with NFI falling year-on-year and we
are taking action to address this. In our Commercial operations in
Germany, our logistics operation has performed well, returning to
growth after a challenging 2021, however our temporary business has
been impacted by clients' ongoing supply chain issues alongside
increased illness rates from COVID-19 which have impacted margins.
Public sector healthcare in Finland is facing significant change
and this, alongside the fall in COVID-19 related demand, has had an
adverse impact on our operation there.
APAC
6 months 6 months
ended ended % change
30 June 30 June (constant
GBP'm 2022 2021 % change currency)
--------------------------- --------- --------- --------- -----------
Revenue 23.0 19.3 +19% +22%
Net fee income 7.9 6.6 +20% +22%
Adjusted operating profit 0.5 0.5 +0% +0%
% of Group net fee income 24% 23%
In APAC (which excludes our Offshore Services operations in
India and Philippines), net fee income increased by 20% (22% in
constant currency) with strong growth in most countries including
record H1 net fee income levels in Indonesia, Philippines, Thailand
and Japan. Profits were in line with prior year reflecting a full
period of the regional overheads along with some challenges in
Australia, where high competition for talent is resulting in
significant levels of counter-offers. Net fee income growth has
been supplemented by our new RPO service offering in the region and
this has seen good early success. Aviation continues to be a
challenge, particularly in our core Asia market where airlines have
not seen the levels of recovery experienced in the US or Europe and
are recalling pilots rather than turning to agencies for new
resources.
Americas
6 months 6 months
ended ended % change
30 June 30 June (constant
GBP'm 2022 2021 % change currency)
--------------------------- --------- --------- --------- -----------
Revenue 32.7 36.7 -11% -11%
Net fee income 4.6 5.0 -8% -12%
Adjusted operating profit 0.8 1.7 -53% -56%
% of Group net fee income 14% 17%
In the Americas, net fee income fell by 8% (12% in constant
currency), with operating profit down by 53%. The main driver of
these results was the expected reduction in Healthcare following an
extremely strong 2021 that was driven by COVID-19 vaccination and
testing related demand for a high volume of similar roles which we
were able to deliver more efficiently. Our US IT operation
delivered a small year-on-year fall in net fee income against a
strong 2021 comparator and in an extremely competitive market where
counter-offers have become the norm. In LATAM our operations showed
a small fall in net fee income due to a large election project in
Chile last year and a slow recovery from COVID-19 in Peru.
Offshore Services
6 months 6 months
ended ended % change
30 June 30 June (constant
GBP'm 2022 2021 % change currency)
--------------------------- --------- --------- --------- -----------
Revenue 11.7 6.4 +83% +77%
Net fee income 6.1 3.2 +91% +85%
Adjusted operating profit 3.5 1.8 +94% +94%
% of Group net fee income 18% 11%
Offshore Services has carried its strong momentum from 2021 into
2022 with year-on-year net fee income growth of 91% (85% in
constant currency) and profit growth of 94%. The UK operation has
continued to grow significantly with the number of billable seats
increasing by a third from the end of 2021. Our progress in the US
market has slowed in the first half of the year with new growth
offset by a reduction in demand from healthcare staffing clients.
We will be investing in the second half of the year to increase
capacity and enable us to enter the next phase of our growth.
Financing
Net finance costs remain low at GBP0.5m (2021: GBP0.3m) with the
increase due to higher interest rates and margins along with the
inclusion of an interest credit in 2021 on settlement of tax
liabilities.
Net cash inflow from operating activities was GBP7.3m (2021:
GBP2.0m). Free cash flow, which excludes movements related to pilot
bonds and includes cash outflows on leases, was an inflow of
GBP4.8m (2021: outflow of GBP0.8m). This reflects the reduced
working capital requirements from our temporary and contract
business, offset by an increase from permanent placements and
offshore services. 2021 cash flows reflected a significant increase
in working capital as trading levels recovered post COVID-19.
Capital expenditure in the first half of 2022 was GBP0.8m and
included expenditure on increasing our office capacity in Japan and
supporting headcount increases in India alongside the investment in
our core technology platform. The Group's dividend results in a
GBP0.6m outflow (2021: GBP0.5m), while a cash outflow of GBP0.2m
(2021: GBP0.2m) is shown for Empresaria shares purchased and
transferred into the Employee Benefit Trust.
Adjusted net debt (which excludes GBP0.7m cash held in respect
of pilot bonds and does not include lease liabilities recognised
under IFRS 16) was GBP10.8m as at 30 June 2022, a reduction of
GBP3.2m from 31 December 2021.
As 30 June 2022, the Group had financing facilities totalling
GBP54.0m (31 December 2021: GBP55.5m). Excluding invoice financing,
undrawn facilities have increased to GBP14.8m (31 December 2021:
GBP12.9m) reflecting the reduction in the overall net debt
position.
The Group's revolving credit facility covenants are tested on a
quarterly basis. The covenants, and our performance against them as
at 30 June 2022, are as follows:
Measure Target Actual
Net debt to EBITDA < 3.0 times 1.0 times
Interest cover > 4.0 times 12.6 times
Debtor coverage > 1.75 times 4.7 times
Dividend
In line with prior years, the Board is not recommending the
payment of an interim dividend for 2022 (2021: nil).
11 August 2022
Condensed consolidated income statement
Six months ended 30 June 2022
Year
6 months 6 months ended 31
ended 30 ended 30 December
June 2022 June 2021 2021
Unaudited Unaudited
Notes GBPm GBPm GBPm
Revenue 3 129.8 129.8 258.4
Cost of sales (97.2) (101.4) (198.9)
----------- ----------- ----------
Net fee income 3 32.6 28.4 59.5
Administrative costs (28.1) (24.1) (50.2)
----------- ----------- ----------
Adjusted operating profit 3 4.5 4.3 9.3
Impairment of goodwill - (0.6) (0.9)
Impairment of other intangible
assets - (0.3) (0.3)
Amortisation of intangible assets
identified in business combinations (0.7) (0.7) (1.4)
----------- ----------- ----------
Operating profit 3.8 2.7 6.7
----------- ----------- ----------
Finance income 4 0.1 0.1 0.3
Finance costs 4 (0.6) (0.4) (1.0)
----------- ----------- ----------
Net finance costs 4 (0.5) (0.3) (0.7)
----------- ----------- ----------
Profit before tax 3.3 2.4 6.0
Taxation 6 (1.3) (1.4) (3.1)
Profit for the period 2.0 1.0 2.9
----------- ----------- ----------
Attributable to:
Owners of Empresaria Group plc 1.4 0.8 2.3
Non-controlling interests 0.6 0.2 0.6
----------- ----------- ----------
2.0 1.0 2.9
----------- ----------- ----------
Pence Pence Pence
Unaudited Unaudited
Earnings per share
Basic 7 2.8 1.6 4.6
Diluted 7 2.7 1.6 4.5
Details of adjusted earnings per share are shown in note 7.
Condensed consolidated statement of comprehensive income
Six months ended 30 June 2022
6 months 6 months Year
ended ended ended 31
30 June 30 June December
2022 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Profit for the period 2.0 1.0 2.9
---------- ---------- ----------
Other comprehensive income
Items that may be reclassified subsequently
to the income statement:
Exchange differences on translation
of foreign operations 2.2 (1.4) (1.7)
Items that will not be reclassified
to the income statement:
Exchange differences on translation
of non-controlling interests in foreign
operations 0.2 (0.3) (0.6)
---------- ---------- ----------
Other comprehensive income/(loss) for
the period 2.4 (1.7) (2.3)
---------- ---------- ----------
Total comprehensive income/(loss) for
the period 4.4 (0.7) 0.6
---------- ---------- ----------
Attributable to:
Owners of Empresaria Group plc 3.6 (0.6) 0.6
Non-controlling interests 0.8 (0.1) -
---------- ---------- ----------
4.4 (0.7) 0.6
---------- ---------- ----------
Condensed consolidated balance
sheet
As at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited
Notes GBPm GBPm GBPm
Non-current assets
Property, plant and equipment 2.2 1.6 1.6
Right-of-use assets 6.7 8.1 7.5
Goodwill 31.3 31.1 30.5
Other intangible assets 8.7 9.6 9.3
Deferred tax assets 4.2 3.2 3.4
---------- ---------- ------------
53.1 53.6 52.3
---------- ---------- ------------
Current assets
Trade and other receivables 10 48.8 49.9 50.5
Cash and cash equivalents 9 23.1 21.4 21.1
---------- ---------- ------------
71.9 71.3 71.6
---------- ---------- ------------
Total assets 125.0 124.9 123.9
---------- ---------- ------------
Current liabilities
Trade and other payables 11 35.0 33.6 34.8
Current tax liabilities 1.6 1.9 1.9
Borrowings 8 22.7 26.2 23.2
Lease liabilities 3.3 4.7 4.6
---------- ---------- ------------
62.6 66.4 64.5
---------- ---------- ------------
Non-current liabilities
Borrowings 8 10.5 11.0 11.2
Lease liabilities 3.7 3.7 3.3
Deferred tax liabilities 2.5 2.5 2.6
---------- ---------- ------------
16.7 17.2 17.1
---------- ---------- ------------
Total liabilities 79.3 83.6 81.6
---------- ---------- ------------
Net assets 45.7 41.3 42.3
---------- ---------- ------------
Equity
Share capital 2.5 2.5 2.5
Share premium account 22.4 22.4 22.4
Merger reserve 0.9 0.9 0.9
Retranslation reserve 4.7 2.8 2.5
Equity reserve (10.2) (10.2) (10.2)
Other reserves (0.4) (0.5) (0.6)
Retained earnings 20.5 18.3 19.9
---------- ---------- ------------
Equity attributable to owners of Empresaria
Group plc 40.4 36.2 37.4
Non-controlling interests 5.3 5.1 4.9
---------- ---------- ------------
Total equity 45.7 41.3 42.3
---------- ---------- ------------
Condensed consolidated statement of changes in
equity
Six months ended
30 June 2022
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
At 31 December
2020 2.4 22.4 0.9 4.2 (10.2) (0.6) 18.1 37.2 5.2 42.4
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Profit for the
period - - - - - - 0.8 0.8 0.2 1.0
Exchange
differences on
translation
of foreign
operations - - - (1.4) - - - (1.4) (0.3) (1.7)
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Total
comprehensive
(loss)/income
for the period - - - (1.4) - - 0.8 (0.6) (0.1) (0.7)
Dividend paid to
owners of
Empresaria
Group plc - - - - - - (0.5) (0.5) - (0.5)
Purchase of own
shares in
Employee
Benefit Trust - - - - - - (0.2) (0.2) - (0.2)
Exercise of
share options 0.1 - - - - (0.1) 0.1 0.1 - 0.1
Share-based
payments - - - - - 0.2 - 0.2 - 0.2
At 30 June 2021
(Unaudited) 2.5 22.4 0.9 2.8 (10.2) (0.5) 18.3 36.2 5.1 41.3
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
At 31 December
2020 2.4 22.4 0.9 4.2 (10.2) (0.6) 18.1 37.2 5.2 42.4
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Profit for the
year - - - - - - 2.3 2.3 0.6 2.9
Exchange
differences on
translation
of foreign
operations - - - (1.7) - - - (1.7) (0.6) (2.3)
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Total
comprehensive
income for
the year - - - (1.7) - - 2.3 0.6 - 0.6
Dividend paid to
owners of
Empresaria
Group plc - - - - - - (0.5) (0.5) - (0.5)
Dividend paid to
non-controlling
interests - - - - - - - - (0.3) (0.3)
Purchase of own
shares in
Employee
Benefit Trust - - - - - - (0.3) (0.3) - (0.3)
Exercise of
share options 0.1 - - - - (0.3) 0.3 0.1 - 0.1
Share-based
payments - - - - - 0.3 - 0.3 - 0.3
At 31 December
2021 2.5 22.4 0.9 2.5 (10.2) (0.6) 19.9 37.4 4.9 42.3
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Profit for the
period - - - - - - 1.4 1.4 0.6 2.0
Exchange
differences on
translation
of foreign
operations - - - 2.2 - - - 2.2 0.2 2.4
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Total
comprehensive
income for
the period - - - 2.2 - - 1.4 3.6 0.8 4.4
Dividend paid to
owners of
Empresaria
Group plc - - - - - - (0.6) (0.6) - (0.6)
Dividend paid to
non-controlling
interests - - - - - - - - (0.4) (0.4)
Purchase of own
shares in
Employee
Benefit Trust - - - - - - (0.2) (0.2) - (0.2)
Share-based
payments - - - - - 0.2 - 0.2 - 0.2
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
At 30 June 2022
(Unaudited) 2.5 22.4 0.9 4.7 (10.2) (0.4) 20.5 40.4 5.3 45.7
----------------- -------- -------- --------- -------------- -------- --------- --------- ------ ---------------- -------
Condensed consolidated
cash flow statement
Six months ended 30 June
2022
6 months ended 30 June 2022 6 months ended 30 June 2021 Year ended 31 December 2021
Unaudited Unaudited
GBPm GBPm GBPm
Profit for the period 2.0 1.0 2.9
Adjustments for:
Depreciation and software
amortisation 0.5 0.4 1.0
Depreciation of
right-of-use assets 2.6 2.9 5.3
Impairment of goodwill - 0.6 0.9
Impairment of other
intangible assets - 0.3 0.3
Amortisation of
intangible assets
identified in business
combinations 0.7 0.7 1.4
Share-based payments 0.2 0.2 0.3
Net finance costs 0.5 0.3 0.7
Taxation 1.3 1.4 3.1
---------------------------- ---------------------------- ----------------------------
7.8 7.8 15.9
Decrease/(increase) in
trade and other
receivables 1.9 (6.3) (8.2)
Increase in trade and
other payables (including
pilot bonds outflow of
GBPnil (30 June 2021:
GBP0.3m, 31 December
2021: GBP0.3m)) 0.2 2.2 3.5
---------------------------- ---------------------------- ----------------------------
Cash generated from
operations 9.9 3.7 11.2
Interest paid (0.5) (0.5) (0.9)
Income taxes paid (2.1) (1.2) (2.7)
---------------------------- ---------------------------- ----------------------------
Net cash inflow from
operating activities 7.3 2.0 7.6
---------------------------- ---------------------------- ----------------------------
Cash flows from investing
activities
Purchase of property, plant
and equipment, and
software (0.8) (0.7) (1.7)
Finance income 0.1 0.1 0.3
---------------------------- ---------------------------- ----------------------------
Net cash outflow from
investing activities (0.7) (0.6) (1.4)
---------------------------- ---------------------------- ----------------------------
Cash flows from financing
activities
Decrease in overdrafts (0.8) (1.0) (3.3)
Proceeds from bank loans - 5.0 5.5
Repayment of bank loans (0.7) - (0.2)
(Decrease)/increase in
invoice financing ( 0.1) 0.4 -
Payment of obligations
under leases (2.5) (3.1) (5.3)
Purchase of shares in
existing subsidiaries - (0.6) (0.6)
Purchase of own shares in
Employee Benefit Trust (0.2) (0.2) (0.3)
Dividends paid to owners of
Empresaria Group plc (0.6) (0.5) (0.5)
Dividends paid to
non-controlling interests (0.4) - (0.3)
---------------------------- ---------------------------- ----------------------------
Net cash outflow from
financing activities (5.3) - (5.0)
---------------------------- ---------------------------- ----------------------------
Net increase in cash and
cash equivalents 1.3 1.4 1.2
Foreign exchange movements 0.7 (0.8) (0.9)
Cash and cash equivalents
at beginning of the period 21.1 20.8 20.8
---------------------------- ---------------------------- ----------------------------
Cash and cash equivalents
at end of the period 23.1 21.4 21.1
---------------------------- ---------------------------- ----------------------------
Bank overdrafts at
beginning of the period (18.2) (22.1) (22.1)
Decrease in the period 0.8 1.0 3.3
Foreign exchange movements (0.3) 0.5 0.6
---------------------------- ---------------------------- ----------------------------
Bank overdrafts at end of
the period (17.7) (20.6) (18.2)
---------------------------- ---------------------------- ----------------------------
Cash, cash equivalents and
bank overdrafts at period
end 5.4 0.8 2.9
---------------------------- ---------------------------- ----------------------------
Notes to the interim financial statements
Six months ended 30 June 2022
1 Basis of preparation and general information
Empresaria Group plc is the Group's ultimate parent company. It is incorporated and domiciled
in England and its registered office address is Old Church House, Sandy Lane, Crawley Down,
Crawley, West Sussex, RH10 4HS, United Kingdom, its company registration number is 03743194
and its shares are listed on AIM, a market of London Stock Exchange plc.
The condensed set of financial statements have been prepared using accounting policies consistent
with UK-adopted International Accounting Standards. The same accounting policies, presentation
and methods of computation are followed in the condensed set of financial statements as applied
in the Group's latest annual audited financial. The Group does not anticipate any change in
these accounting policies for the year ended 31 December 2022. While the financial information
included in these interim financial statements has been prepared in accordance with UK-adopted
International Accounting Standards applicable to interim periods, these interim financial
statements do not contain sufficient information to constitute an interim financial report
as that term is defined in IAS 34.
The information for the year ended 31 December 2021 has been derived from audited statutory
accounts for the year ended 31 December 2021. The information for the year ended 31 December
2021 included herein does not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors reported on those accounts: their report was unqualified,
did not draw attention to any matters by way of emphasis and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006. The interim financial information for 2022
and 2021 has been neither audited nor reviewed.
Going concern
The Group's activities are funded by a combination of long-term equity capital, revolving
credit facilities, term loans, short-term invoice financing and bank overdraft facilities.
The day to day operations are funded by cash generated from trading, invoice financing and
overdraft facilities. The Board has reviewed the Group's profit and cash flow projections
and applied sensitivities to the underlying assumptions. These projections suggest that the
Group will meet its obligations as they fall due with the use of existing facilities.
The majority of the Group's overdraft facilities fall due for renewal at the end of January
each year and, based on informal discussions the Board has had with its lenders, has no reason
to believe that these facilities will not continue to be available to the Group for the foreseeable
future. As a result, the going concern basis continues to be appropriate in preparing the
financial statements.
2 Accounting estimates and judgements
The preparation of interim financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amount
of income, expense, assets and liabilities. The significant estimates and judgements made
by management were consistent with those applied to the consolidated financial statements
for the year ended 31 December 2021.
Notes to the interim financial statements
Six months ended 30 June 2022
3 Segment analysis
From 1 January 2022, following the appointment of regional leaders
in 2021, 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 four regions. The information presented in
these interim financial statements
is therefore now presented by region, which represents a change
from the prior year which
was reported by operating sector. Prior period information is
re-presented by region.
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 services.
The analysis of the Group's business by region is set out below:
Six months to 30 June Adjusted operating
2022 Revenue Net fee income profit/(loss)
GBPm GBPm GBPm
UK & Europe 63.2 14.5 2.0
APAC 23.0 7.9 0.5
Americas 32.7 4.6 0.8
Offshore Services 11.7 6.1 3.5
Central costs - - (2.3)
Intragroup eliminations (0.8) (0.5) -
---------- ---------------------- -----------------------
129.8 32.6 4.5
---------- ---------------------- -----------------------
Six months to 30 June Adjusted operating
2021 Revenue Net fee income profit/(loss)
GBPm GBPm GBPm
UK & Europe 67.9 14.1 2.5
APAC 19.3 6.6 0.5
Americas 36.7 5.0 1.7
Offshore Services 6.4 3.2 1.8
Central costs - - (2.2)
Intragroup eliminations (0.5) (0.5) -
--------- ---------------------- -----------------------
129.8 28.4 4.3
--------- ---------------------- -----------------------
Notes to the interim financial statements
Six months ended 30 June 2022
Segment analysis
3 (continued)
Year ended 31 December 2021 Adjusted operating
Revenue Net fee income profit/(loss)
GBPm GBPm GBPm
UK & Europe 133.1 29.0 5.3
APAC 40.3 14.1 1.4
Americas 71.0 9.9 2.8
Offshore Services 15.3 7.7 4.1
Central costs - - (4.3)
Intragroup eliminations (1.3) (1.2) -
-------------------- --------------------- --------------------
258.4 59.5 9.3
-------------------- --------------------- --------------------
Finance income and
4 costs
Year
6 months ended 30 6 months ended 30 ended 31 December
June 2022 June 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Finance income
Bank interest receivable 0.1 0.1 0.3
0.1 0.1 0.3
-------------------- --------------------- --------------------
Finance costs
Invoice financing - - (0.1)
Bank loans and overdrafts (0.4) (0.3) (0.7)
Interest on lease
liabilities (0.2) (0.2) (0.3)
Interest on tax payments - 0.1 0.1
(0.6) (0.4) (1.0)
-------------------- --------------------- --------------------
Net finance costs (0.5) (0.3) 0.7
-------------------- --------------------- --------------------
5 Reconciliation of profit before tax to adjusted profit before tax
Year
6 months ended 30 6 months ended 30 ended 31 December
June 2022 June 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Profit before tax 3.3 2.4 6.0
Impairment of goodwill - 0.6 0.9
Impairment of other
intangible assets - 0.3 0.3
Amortisation of
intangible assets
identified in business
combinations 0.7 0.7 1.4
Adjusted profit before
tax 4.0 4.0 8.6
-------------------- --------------------- --------------------
Notes to the interim financial statements
Six months ended 30 June 2022
6 Taxation
The tax charge for the six month period is GBP1.3m (6 months ended
30 June 2021: GBP1.4m, year ended 31 December 2021: GBP3.1m).
On an adjusted basis (excluding adjusting items as set out in
note 5 and their tax effect), the effective tax rate is 38% (6
months ended 30 June 2021: 38%). The tax charge for the period
is assessed using the best estimate of the effective tax rates
expected to be applicable for the full year, applied to the pre-tax
income of the six month period.
7 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 2022 and 2021
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.
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Earnings
Earnings attributable to owners of
Empresaria Group plc 1.4 0.8 2.3
Adjustments:
Impairment of goodwill - 0.6 0.9
Impairment of other intangible assets - 0.3 0.3
Amortisation of intangible assets identified
in business combinations 0.7 0.7 1.4
Tax on the above (0.2) (0.1) (0.3)
Non-controlling interests in respect
of the above - (0.2) (0.2)
Adjusted earnings 1.9 2.1 4.4
------------- ----------- -------------
Number of shares Millions Millions Millions
Weighted average number of shares -
basic 49.5 50.0 49.8
Dilution effect of share options 1.9 1.2 1.6
------------- ----------- -------------
Weighted average number of shares -
diluted 51.4 51.2 51.4
------------- ----------- -------------
Earnings per share Pence Pence Pence
Basic 2.8 1.6 4.6
Dilution effect of share options (0.1) - (0.1)
------------- ----------- -------------
Diluted 2.7 1.6 4.5
------------- ----------- -------------
Adjusted earnings per share Pence Pence Pence
Basic 3.8 4.2 8.8
Dilution effect of share options (0.1) (0.1) (0.2)
------------- ----------- -------------
Diluted 3.7 4.1 8.6
------------- ----------- -------------
The weighted average number of shares (basic) has been calculated
as the weighted average number of shares in issue during the year
plus the weighted average 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.
Notes to the interim financial
statements
Six months ended 30 June 2022
8 Borrowings
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Current
Bank overdrafts 17.7 20.6 18.2
Invoice financing 4.5 5.2 4.6
Bank loans 0.5 0.4 0.4
---------- ---------- ------------
22.7 26.2 23.2
---------- ---------- ------------
Non-current
Bank loans 10.5 11.0 11.2
---------- ---------- ------------
10.5 11.0 11.2
---------- ---------- ------------
Borrowings 33.2 37.2 34.4
---------- ---------- ------------
The UK revolving credit facility is 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. It is
also subject to financial covenants and these are disclosed
in the financing review. The UK invoice financing facility is
also secured by a fixed and floating charge over trade receivables.
Notes to the interim financial statements
Six months ended 30 June 2022
9 Adjusted net debt
30 June 30 June 31 December
a) Adjusted net debt 2022 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Cash and cash equivalents 23.1 21.4 21.1
Less cash held in respect of pilot
bonds (0.7) (0.7) (0.7)
----------- ----------- -------------
Adjusted cash 22.4 20.7 20.4
Borrowings (33.2) (37.2) (34.4)
Adjusted net debt (10.8) (16.5) (14.0)
----------- ----------- -------------
The Group presents adjusted net debt as its principle debt measure.
Adjusted net debt excludes 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.
6 months 6 months Year ended
ended 30 ended 30 31 December
b) Movement in adjusted net debt June 2022 June 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
At 1 January (14.0) (13.6) (13.6)
Net increase in cash and cash
equivalents per consolidated cash
flow statement 1.3 1.4 1.2
Net decrease/(increase) in overdrafts
and loans 1.5 (4.0) (2.0)
Decrease/(increase) in invoice
financing 0.1 (0.4) -
Foreign exchange movements 0.3 (0.2) 0.1
Adjusted for decrease in cash
held in respect of pilot bonds - 0.3 0.3
(10.8) (16.5) (14.0)
----------- ----------- -------------
Notes to the interim financial
statements
Six months ended 30 June 2022
10 Trade and other receivables
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Gross trade receivables 36.2 42.3 40.4
Less provision for impairment of
trade receivables (1.1) (1.0) (0.9)
---------- ---------- ------------
Trade receivables 35.1 41.3 39.5
Prepayments 2.4 1.5 1.7
Accrued income 7.3 4.1 5.0
Corporation tax receivable 1.1 1.2 0.9
Other receivables 2.9 1.8 3.4
---------- ---------- ------------
48.8 49.9 50.5
---------- ---------- ------------
11 Trade and other payables
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited
GBPm GBPm GBPm
Current
Trade payables 2.4 1.5 2.0
Other tax and social security 6.1 7.0 7.1
Pilot bonds 0.7 0.7 0.7
Client deposits 0.4 0.5 0.5
Other payables 5.3 5.8 4.5
Accruals 20.1 18.1 20.0
35.0 33.6 34.8
---------- ---------- ------------
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 three 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.
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END
IR VBLFFLVLZBBQ
(END) Dow Jones Newswires
August 11, 2022 02:00 ET (06:00 GMT)
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