TRANSFORMATIONAL 2005 YEAR CONTINUES TO BEAR FRUIT IN 2006
Hat Pin, the human resources group and owner of market leading brands
Kendall Tarrant Worldwide and Saxton Bampfylde Hever, today announces
preliminary results for the twelve months to 31 December 2005.
2005 Highlights:
* Turnover up 22% to �5.1m (2004: �4.2m)
* Operating profit up 30% to �758,000 (2004: �584,000)
* Final dividend up 10% to 1.1 pence per share (2004: 1 pence per
share)
* Strong performance from all offices across all geographies
* �4.9m acquisition of 70% of Saxton Bampfylde Hever in
mid-December
* Hat Pin Board strengthened with appointments of new Non-Executive
Chairman, Finance Director and Executive Director
Current year:
* �1.18m acquisition of 100% of Stolkin & Partners in March
* Strong start made by Kendall Tarrant Worldwide and Saxton
Bampfylde Hever
Commenting on the results, Angela Campbell-No�, Chief Executive of
Hat Pin plc said:
"2005 has been a transformational year for Hat Pin. Kendall Tarrant
had another year of consecutive organic growth in 2005 and we were
delighted to complete the acquisition of 70% of Saxton Bampfylde
Hever in mid-December.
"2006 has seen strong starts from both Kendall Tarrant and Saxton
Bampfylde. Additionally, earlier this month we announced the
acquisition of Stolkin & Partners and its subsequent merger into
Kendall Tarrant in London. The sectors our operating brands serve
are generally buoyant and we will update the market further at our
AGM on 10 May."
Ends
For further information, please contact:
Hat Pin plc +44 (0)20 7907 4433
Angela Campbell-No�, Chief Executive
Paul Billett, Finance Director
Gainsborough Communications +44 (0)20 7190 1705
Julian Walker
Note to Editors
Hat Pin plc (www.hatpin.co.uk)
Hat Pin primarily operates in the provision of human resource. The
group operates through its subsidiary brands, Kendall Tarrant
Worldwide and Saxton Bampfylde Hever (in which it acquired a 70%
stake in December 2005):
* Kendall Tarrant Worldwide(www.kendalltarrant.com) is the UK's
largest and most successful advertising recruitment firm and a
highly respected name in advertising and communications
worldwide, with offices in London, New York, San Francisco and
Hong Kong.
* Saxton Bampfylde Hever (www.saxbam.com) is a premium brand within
the executive search industry. Within the private sector, Saxton
Bampfylde Hever has an extensive track record in senior media,
retail/consumer, financial services, professional services and
technology appointments. Within the public and not-for-profit
sectors, Saxton Bampfylde Hever is a leading adviser on senior
appointments in higher education, central government (including
regulatory and trade body appointments at the interface between
government and business), charities and the arts.
Chairman's Statement
Hat Pin had an excellent year in 2005. Its turnover increased by 22%
from �4,209,000 to �5,118,000 and its operating profit by 30% from
�584,000 to �758,000. Basic earnings per share, adjusted for
exceptional items, were unchanged at 5.1p since Hat Pin ceased to
benefit from material tax losses. The Board is recommending an
increased final dividend of 1.1p per share.
I would like to thank my predecessor, Gay Haines, for her enormous
contribution to the Company. It is because of her vision, leadership
and revenue generation that we have been able to build the platform
for Hat Pin's excellent current performance and prospects. I am
delighted that Gay has chosen to remain on the Board so that we
continue to benefit from her reputation in the sector, wise counsel
and marketing power.
The detail of the performance of Kendall Tarrant, the only subsidiary
of Hat Pin until very near the end of 2005, is set out in the chief
executive's and financial reviews but I should note that UK Search
and the US and Asian operations did particularly well.
We have previously stated that we have been seeking to complement our
organic growth by suitable acquisition opportunities and in December
we completed the purchase of 70% of Saxton Bampfylde Hever. This
transformational transaction, approximately doubling the size of Hat
Pin, brings us one of the UK's leading executive search firms, which
advises a broad range of clients across the private, public and
not-for-profit sectors. It therefore fundamentally diversifies our
revenue streams.
An important benefit of this acquisition is that Stephen Bampfylde
has joined our Board. Apart from being an extremely influential
figure in executive search and a founder and director of The Amrop
Hever Group, an international network of executive search firms,
Stephen has a wealth of experience of advising the boards of major
companies, which is already adding to the Hat Pin Board's
deliberations.
In addition to Stephen's and my own appointments, the Hat Pin Board
has been further strengthened by the appointment of a new finance
director, Paul Billett, who brings with him a commensurate set of
skills that will further help us to develop the Group. We continue
to benefit from the non-executive input of Peter Walker.
Subsequent to the year end, in March 2006 we completed the
acquisition of Stolkin & Partners in the UK and its subsequent merger
into Kendall Tarrant London. This is an important acquisition, which
augments Kendall Tarrant's pre-eminent global position in the
advertising, marketing and communications sector. We are looking to
identify further value enhancing acquisitions in the recruitment
industry. I am pleased to report that we have already examined a
number of prospects for the next year and Hat Pin is demonstrably an
attractive partner for able managements.
The 2005 results, the acquisitions of Saxton Bampfylde Hever and
Stolkin & Partners and the strategy have all reinforced my decision
to buy a significant number of Hat Pin shares last year. I also
believe that Hat Pin is extremely fortunate to have such an
outstanding management team as chief executive, Angela Campbell-No�,
and finance director, Paul Billett. It is a measure of our ambition
that we have made this investment in management, which goes way
beyond running a company of its current size.
All of our staff contribute to these bright prospects. I have worked
in people businesses for over thirty years and I can only say that
the teams in Kendall Tarrant and Saxton Bampfylde Hever stand
comparison with the very best that I have met previously. On behalf
of the Board and shareholders I thank them profusely.
Looking to the year ahead, both Kendall Tarrant and Saxton Bampfylde
Hever have made a strong start to 2006. I look forward to giving a
further update at our AGM and hope to meet as many shareholders as
possible then.
There are over 1,400 companies on AIM alone and I view it as a
privilege that our shareholders are choosing to invest in Hat Pin
rather than in many other businesses. The Board is committed to
demonstrating that your confidence is well placed.
T J Hitchcock
Non-Executive Chairman
Chief Executive's Review
I am pleased to report that Kendall Tarrant had another year of
consecutive organic growth in 2005. The business remains strong and
the international franchise continues to strengthen with China in its
first full year of operation and Latin America coming on line at the
end of 2005.
In addition to driving the organic growth of our existing businesses,
our stated strategy is to look for suitable acquisition opportunities
within the sector. We have clear acquisition criteria, which are
that the companies we buy should have strong brand names, ambitious
and committed management, potential for growth and a return ahead of
our cost of capital. In addition, they should complement our
existing activities and help diversify our earnings. We will not
pursue acquisitions for which the main arguments are synergy and
cost-cutting, so often promised and yet seldom delivered.
To complement our organic growth and in line with our stated
strategy, we were delighted to complete the acquisition of 70% of
Saxton Bampfylde Hever at the end of 2005, albeit too late in the
year to have an impact on our annual results. We are extremely proud
to have attracted a company of its calibre and standing in the
executive search sector and have been very pleased to welcome Stephen
Bampfylde as an important addition to the Hat Pin Board.
Subsequent to the year end, and again very much in line with our
strategy, in March 2006 we completed the acquisition of Stolkin &
Partners and its subsequent merger into Kendall Tarrant London, thus
augmenting Kendall Tarrant's pre-eminent global position in the
advertising, marketing and communications sector. Gary Stolkin has
built a successful business as a key competitor to Kendall Tarrant
over the past three years and we are very pleased to welcome him and
his strong, ambitious and well respected team to Kendall Tarrant.
The acquisition is an important part of Kendall Tarrant's succession
planning strategy in the UK and European market and, following the
acquisition and merger of the two businesses, Gary Stolkin becomes
CEO of Kendall Tarrant London and his colleague, Lucy Meredith, leads
Kendall Tarrant's important pan-European creative team.
Review of Kendall Tarrant Worldwide's 2005 operations
UK/Europe
The strength of our senior search practice in the UK and Europe
resulted in another outstanding contribution to the overall turnover
of �3.1 million in 2005, up 7% on 2004. Kendall Tarrant has
successfully built this senior practice on the reputation it has
established over the years and the relationships it has built with
clients and candidates alike. With its global footprint it is
uniquely positioned to deliver in this arena. The contingency
business continued to thrive in 2005 with particularly strong
performances from the senior management, account handling and
integrated practices.
We also invested in senior consultants in three new practice areas:
corporate marketing roles, corporate affairs and PR and media. These
areas are strategically important in developing the Kendall Tarrant
franchise, encapsulating the broader marketing and communications
sector while retaining strong linkage to our existing core areas.
The initial costs of this investment have led to a reduced operating
profit in the UK in 2005 (down 12% to �471,000), but it is expected
that the new areas will be profitable in 2006.
USA/Latin America
Kendall Tarrant Americas recorded another year of record growth -
turnover was �1.3 million, up 60% on 2004 - and it finished the year
ahead of budget by 28%. The strong performance was delivered in a
robust but evolving market. The lines between the traditional
disciplines continue to blur and digital, in particular, is becoming
an increasingly important marketing channel. Salary inflation in
this space is extreme due to a dearth of talent and increasingly
marketers are searching for experienced practitioners in non-agency
environments such as Yahoo and Viacom. Likewise, media companies are
flourishing in this reinvigorated multi-channel market and in 2005
Kendall Tarrant established a foothold in this important area in the
US.
All disciplines performed strongly and it was particularly pleasing
that our investment in creative paid handsome dividends this year.
We continue to look for new consultants to capitalise on our success
in the US market and we moved into new office premises in San
Francisco in the second half of 2005.
An important initiative in 2005 was the launch of Kendall Tarrant in
Latin America and we are delighted to have formalised our
relationship with Jaime Greene, a highly respected advertising
executive with extensive regional experience. Our revenues from the
Latin American region have been growing steadily over the last two
years and we are confident that our investment in a dedicated
consultant will build on these strong foundations.
Asia
Kendall Tarrant had an exceptional year in Asia in 2005, mirroring
the return to economic growth and an increase in recruitment activity
in the region.
Turnover grew by 40% to �0.7 million, with equally healthy increments
in net profit and margins. Particularly encouraging was the increase
in the number of retained briefs assigned to Kendall Tarrant,
especially in talent-hungry markets like China. This underlines the
strength and depth of the strategic, consultative partnership Kendall
Tarrant has established with senior agency management in Asia.
In 2005, the bulk of our Asia revenue came from senior management,
account handling and planning placements. The number of regional
creative mandates for creative directors, both permanent and
freelance, was extremely buoyant. This positive development has
spurred us to increase our consultant resource in the coming year.
Equally, in the growing marketing services area of integrated,
digital/interactive and activation we are beginning to build new
client relationships. We continue to leverage our already strong and
established UK candidate database against these briefs while building
the Asian database.
China also had a good first year under Harrison Dong, with revenues
accounting for over 20% of our regional turnover. One interesting
development in China, in addition to general talent recruitment, is
that we are now being asked by communications networks to assist in
market entry assignments at the global level. This is great
testament to the strength of our market knowledge and expertise.
Review of Saxton Bampfylde Hever
Although the business was acquired too late to have an impact on the
financial year, I am pleased to welcome the team to Hat Pin.
Saxton Bampfylde Hever ("SBH") is a premium brand within the
executive search industry, with a highly experienced management
team. It has a track record of strong growth over nearly 20 years
and the potential to expand its activities further.
Within the private sector, SBH has an extensive track record in
senior media, retail, financial services, professional services and
technology appointments. Within each of these areas SBH aims to
build sustained relationships with a small number of leading firms
(currently two-thirds of SBH's active private sector mandates
represent business from clients for whom SBH has worked previously).
Within the public and not-for-profit sectors, SBH is a leading
adviser on senior appointments in higher education, central
government (including regulatory and trade body appointments at the
interface between government and business), charities and the arts.
Current trading
We are pleased that both Kendall Tarrant Worldwide and Saxton
Bampfylde Hever have made a strong start to 2006. The sectors they
serve are generally buoyant and we will update shareholders further
at our AGM on 10 May.
While we continue to look for opportunities to grow Hat Pin through
targeted acquisitions, we believe there is significant scope for
organic growth in both Kendall Tarrant and Saxton Bampfylde Hever.
As we have said previously, we shall also look to add the highest
quality consultants at a measured pace and integrate them properly
into our cultures so that our service continues to exceed the most
rigorous requirements of all our clients.
On that note, I would like to thank all the employees of Kendall
Tarrant Worldwide and Saxton Bampfylde Hever. They have worked
tirelessly through the year to ensure that our brands remain
pre-eminent and our results strong.
Equally, we value tremendously the strength of the relationships that
we have built with our clients around the world, relationships which
have contributed enormously to the success of our businesses to date.
Lastly, I would like to thank Terry Hitchcock, who has been a very
important addition to the Hat Pin Board during 2005 as non-executive
chairman. We have quickly developed an excellent working
relationship.
Angela Campbell-No�
Chief Executive
Financial Review
Results
Turnover for the year ended 31 December 2005 increased by 22% to
�5,118,000 (2004: �4,209,000) and was ahead of last year in all
regions. The performance of our overseas operations was particularly
strong with turnover increasing, in constant currencies, in the US
and Asia by 59% and 39% respectively (60% and 40% in Sterling
terms). Turnover in London increased steadily by 7%.
Group operating profit for 2005 was �758,000, up 30% from �584,000 in
2004. The profit margin at this level has increased to 14.8% from
13.9%. Operating profits overseas followed on the heels of the
strong revenue performances and we have seen increases, in constant
currencies, of 65% in the USA and 133% in Hong Kong. On translation
into Sterling, these increases are 66% and 135% respectively.
Operating profits decreased by 12% in the UK, largely due to the
investment in new practice areas towards the end of 2005.
Taxation
The tax charge for 2005 is �235,000, representing an effective rate
of 30%. These figures compare to a charge of �41,000 and an
effective rate of 8% in 2004. The tax charge last year benefited
from the utilisation of trading losses in the US. This year has seen
the remainder of those losses utilised, which has resulted in the
significant increase in the effective tax rate. The benefit of the
US losses in 2005 was far less significant than in 2004, but if there
had been no benefit of US tax losses in 2005 the Group's effective
tax rate would have been 35%.
Earnings per share
Basic earnings per share for the year were 5.1p (2004: adjusted for
the exceptional item 5.1p; unadjusted 4.5p). Earnings per share have
not increased in line with the rise in operating profits due to the
impact of the effective tax rate described above. Diluted earnings
per share for the year were 4.8p compared to 4.2p in 2004.
Acquisition
On 15 December 2005 Hat Pin acquired 70% of the issued share capital
of Saxton Bampfylde Hever Limited ("SBH") for total maximum
consideration of �4.91 million. Because the acquisition was
completed very close to the year end, and just prior to Christmas,
SBH's trading in the period between completion and the year end was
not material to the financial statements. Therefore no amounts in
respect of SBH's trading have been included in the consolidated
profit and loss account and cash flow statement, and no goodwill has
been amortised.
Cash flows
Cash generated from operating activities for the year was �1,253,000
(2004: �754,000), reflecting both the increase in operating profit
and the changes in the working capital position. The other major
cash flows in 2005 related to the acquisition of SBH, with a combined
outflow in respect of consideration and costs of �2,488,000 and an
inflow from the proceeds of a new bank loan of �2,000,000.
The cash position as at 31 December 2005 was �1,958,000, including
�439,000 of SBH cash (2004: �1,236,000). Net debt at 31 December
2005 was �42,000 compared to net funds of �1,191,000 in 2004,
reflecting largely the cash flows and debt relating to the
acquisition off-set by the increase in operating cash flows this
year.
Dividends
We are pleased to propose a final dividend of 1.1p per ordinary
share, up 10% on last year (2004: 1.0p). Dividend cover reduces from
4.4 times in 2004 to 3.3 times in 2005, due largely to the 3.6
million shares issued in December in connection with the acquisition
of SBH. Assuming shareholders approve the dividend at the
forthcoming AGM, it will be paid on 26 May 2006 to those shareholders
on the register as at 28 April 2006.
Paul Billett
Finance Director
Consolidated profit and loss account for the year ended 31 December
2005
2005 2004
�'000 �'000
(Restated)
Turnover
5,118 4,209
_____ _____
Gross profit 5,118 4,209
Administrative expenses (4,360) (3,625)
______ ______
Operating profit 758 584
Exceptional item - (80)
Interest receivable 35 23
Interest payable (7) (5)
_____ _____
Profit on ordinary 786 522
activities before taxation
Taxation on profit on ordinary activities (235) (41)
_____ _____
Profit for the financial year 551 481
_____ _____
Basic earnings per share (note 2) 5.1p 4.5p
Diluted earnings per share (note 2) 4.8p 4.2p
All amounts relate to continuing activities.
Consolidated statement of total recognised gains and losses for the
year ended 31 December 2005
2005 2004
�'000 �'000
(Restated)
Profit for the financial year 551 481
Foreign exchange differences 102 (33)
_____ _____
Total recognised gains and losses for the year 653 448
_____ _____
Consolidated and Company balance sheets as at 31 December 2005
Group Group Company Company
2005 2004 2005 2004
�'000 �'000 �'000 �'000
(Restated) (Restated)
Fixed assets
Intangible assets 4,760 - - -
Tangible assets 498 201 - -
Investments - - 5,558 167
5,258 201 5,558 167
Current assets
Debtors 2,736 1,003 669 1,204
Cash at bank 1,958 1,236 1 1
4,694 2,239 670 1,205
Creditors:
Amounts falling due within (3,892) (606) (1,189) (1)
one year
Net current 802 1,633 (519) 1,204
assets/(liabilities)
Creditors:
Amounts falling due after (1,333) - (1,333) -
more than one year
Net assets 4,727 1,834 3,706 1,371
Capital and reserves
Share capital 375 274 375 274
Share premium account 3,130 1,097 3,130 1,097
Capital redemption reserve 3 - 3 -
Profit and loss account 989 504 198 -
Own shares held by the (41) (41) - -
Employee Benefit Trust
Shareholders' equity 4,456 1,834 3,706 1,371
Equity minority interests 271 - - -.
Capital employed 4,727 1,834 3,706 1,371
Consolidated cash flow statement for the year ended 31 December 2005
2005 2004
�'000 �'000
Net cash inflow from operating activities 1,253 754
Returns on investments and servicing of 11 18
finance
Taxation (312) (20)
Capital expenditure and financial (203) 19
investment
Acquisitions (2,049) -
Equity dividends paid to shareholders (110) -
Net cash (outflow)/inflow before financing (1,410) 771
Financing 2,132 (40)
Increase in cash 722 731
Reconciliation to net (debt)/cash
Net cash at 1 January 1,191 420
Increase in cash 722 731
Change in borrowings (1,955) 40
Net (debt)/cash at 31 December (42) 1,191
Notes
1. The announcement set out above does not constitute a full
financial statement of the Company's affairs for the year ended 31
December 2005. The Company's auditors have reported on the full
accounts for 2005 and have accompanied them with an unqualified
report. The accounts have yet to be delivered to the Registrar of
Companies. The 2005 Annual Report will be posted to shareholders on
30 March 2006. From that date, copies will be available for members
of the public at the Company's registered office, 56-60 Hallam
Street, London, W1W 6JL and from the Company's nominated adviser and
broker, Arden Partners Limited, Nicholas House, 3 Laurence Pountney
Hill, London, EC4R 0EU.
2. Basic earnings per ordinary share for each year have been
calculated on the profit on ordinary activities after taxation of
�551,000 (2004: �481,000) divided by the weighted average number of
ordinary shares in issue during the year of 10,920,687 (2004:
10,597,845), which excludes the weighted average number of shares
held by the Employee Benefit Trust of 273,000 (2004: 350,425).
Diluted earnings per share dilutes the basic earnings per share to
take into account share options issued under the Group's employee
share option schemes. The calculation includes the weighted average
number of ordinary shares that would have been issued on the
conversion of all dilutive share options into ordinary shares. The
weighted average number of shares for this purpose is 11,580,408
shares (2004: 11,359,219). The profit after taxation was unchanged
from the basic figure.
3. The directors recommend the payment of a final dividend of
1.1p per ordinary share (2004: 1.0p).
4. The Annual General Meeting is to be held at Hammonds, 7
Devonshire Square, Cutlers Gardens, London, EC2M 4YH on Wednesday 10
May 2006 at 11.30am.
- ---END OF MESSAGE---
Copyright � Hugin ASA 2006. All rights reserved.
Hat Pin (LSE:HTP)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Hat Pin (LSE:HTP)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
