TIDMRTC
RNS Number : 1673H
RTC Group PLC
26 July 2023
This announcement contains inside information as stipulated
under The Market Abuse Regulation (EU No. 596/2014).
26 July 2023
RTC Group Plc
("RTC", "the Company" or "the Group")
Interim Results for the Six Months Ended 30 June 2023
RTC Group Plc (AIM: RTC.L), the engineering and technical
recruitment Group, is pleased to announce its unaudited results for
the six months ended 30 June 2023.
Summary:
-- Group revenue from continuing operations increased 33% to GBP45.6m (2022: GBP34.4m);
-- Contract revenues increased to GBP43.0m (2022: GBP32.1m) and
a strong order book in excess of GBP200m;
-- EBITDA increased by GBP1.5m to GBP1.6m (2022: GBP0.1m);
-- Profit before tax increased by GBP1.4m to GBP1.0m (2022: loss of GBP0.4m);
-- Net assets grew by GBP0.7m to GBP6.9m (2022: GBP6.2m);
-- Net cash inflow from operating activities GBP2.1m (2022 outflow: GBP0.6m);
-- No term debt; and
-- Basic earnings per share 5.20p (2022: loss per share 2.43p).
No dividends were paid in the period (2022: Nil). The Directors
propose an interim dividend of 1.0p per share (2022: Nil). The
interim dividend will be paid on 1 September 2023 to shareholders
on the register on 4 August 2023.
Commenting on the results, Bill Douie, Chairman, said:
"In our Annual Report and Accounts 2022 our general message was
that our Rail business, which had successfully secured a further
long term strategic supply contract with Network Rail, was impacted
by the combination of: the tail end of enhanced costs to comply
with covid restrictions; escalating fuel prices; upfront costs; and
other investment activities to establish appropriate management and
operational structure for our new operating routes. In addition,
there was significant disruption due to industrial action across
the whole rail network. I am pleased to report that, whilst
industrial action remains disappointingly prevalent, albeit with
less impact, our Rail business is back trading strongly and in line
with our expectations. Our other businesses are also showing strong
recovery and have progressed well as anticipated.
I am therefore pleased to be able to report that the Group has
enjoyed a buoyant first half and that we have posted a pre-tax
profit of GBP1.0m for the period.
Whilst I have been reluctant in recent years, especially given
such turbulent times for the global economy, to propose the payment
of dividends, given these excellent results, which represent our
best-ever first half, I am proposing to make a cautious return to
payment of dividends with an interim dividend of 1p per share.
Outlook
We remain cautiously confident that our progress will continue
in the second half of 2023. We continue to invest in our businesses
and to further strengthen our balance sheet through retained
profits."
The interim report is available on the Company's website
www.rtcgroupplc.co.uk .
S
Enquiries:
RTC Group Plc Tel: 0133 286 1835
Bill Douie, Chairman
Andy Pendlebury, Chief Executive
www.rtcgroupplc.co.uk
SPARK Advisory Partners Limited (Nominated Tel: 0203 368 3550
Adviser)
Matt Davis / James Keeshan
www.Sparkadvisorypartners.com
SI Capital (Broker) Tel: 0148 341 3500
Nick Emerson / Sam Lomanto
www.sicapital.co.uk
About RTC
RTC Group Plc is an AIM listed business that focuses on white
and blue-collar recruitment, providing temporary and permanent
labour to a broad range of industries and customers in both
domestic and international markets through its geographically
defined operating divisions.
UK division
Through its Ganymede and ATA Recruitment brands the Group
provides a wide range of recruitment services in the UK.
Ganymede specialise in recruiting technical and engineering
talent and providing complete workforce solutions to help build and
maintain infrastructure and transportation for a wide range of
clients. Ganymede is a market leader in providing a diverse range
of people solutions to the rail, energy, construction, highways,
and transportation sectors. With offices strategically located
across the country, Ganymede provides its clients with the benefit
of a national network of skilled personnel combined with local
expertise.
ATA Recruitment provide technical recruitment solutions to the
manufacturing, engineering, and technology sectors. Working as an
engineering recruitment partner supporting businesses across the
UK. ATA Recruitment has a strong track record of attracting and
recruiting engineering talent for our clients. ATA's regional
offices which are strategically located in Leicester and Leeds each
have dedicated market-experts to ensure ATA delivers excellence to
both our clients and candidates.
International division
Through its GSS brand the Group works with customers across the
globe that are focused on delivering projects in a variety of
engineering sectors. GSS has a track record of delivery in some of
the world's most hostile locations. Working closely with its
customers GSS provides contract and permanent staffing solutions on
an international basis, providing key personnel into new projects
and supporting ongoing large-scale project staffing needs. GSS
typically recruit across a range of disciplines and skills from
operators and supervisors, through to senior management level.
UK Central Services
The Group headquarters are located at the Derby Conference
Centre which also provides office accommodation for its operating
divisions in addition to generating rental and conferencing income
from space not utilised by the Group.
Chairman's statement
Six months ended 30 June 2023
In our Annual Report and Accounts 2022 our general message was
that our Rail business, which had successfully secured a further
long term strategic supply contract with Network Rail, was impacted
by the combination of: the tail end of enhanced costs to comply
with covid restrictions; escalating fuel prices; upfront costs; and
other investment activities to establish appropriate management and
operational structure for our new operating routes. In addition,
there was significant disruption due to industrial action across
the whole rail network. I am pleased to report that, whilst
industrial action remains disappointingly prevalent, albeit with
less impact, our Rail business is back trading in line with our
expectations. Our other businesses are also showing strong recovery
and have progressed well as anticipated.
Ganymede Rail and Recruitment divisions are benefitting from the
increasing demand for high-quality engineering personnel in the UK,
driven by the growth in infrastructure expenditure. In 2021, the UK
government made a funding commitment of GBP100 billion to support
economic infrastructure, specifically aimed at strengthening the
infrastructure sector and fostering its development.
Ganymede Energy benefits from growing demand from major energy
providers for dual-fuel meter installers to support the
Government's smart-meter roll-out programme. The initial programme
has a target completion date of 2025 which involves the
installation of 53m smart gas and electricity meters across the UK,
with follow on works to replace first generation meters and to
upgrade the second-generation meters to 4G capability expected to
continue until 2033.
I am therefore pleased to be able to report that the Group has
enjoyed a buoyant first half and that we have posted a pre-tax
profit of GBP1.0m for the period.
Whilst I have been reluctant in recent years, especially given
such turbulent times for the global economy, to propose the payment
of dividends, given these excellent results, which represent our
best-ever first half, I am proposing to make a cautious return to
payment of dividends with an interim dividend of 1p per share.
Outlook
We remain cautiously confident that our progress will continue
in the second half of 2023. We continue to invest in our businesses
and to further strengthen our balance sheet through retained
profits.
W J C Douie
Chairman
26 July 2023
Finance Director's statement
Six months ended 30 June 2023
Highlights
For the six months ended 30 June 2023, the Group delivered
revenues of GBP45.6m (2022: GBP34.4m) an increase of 33% on the
same period in 2022. EBITDA increased by GBP1.5m to GBP1.6m (2022:
GBP0.1m) and profit before tax was GBP1.0m (2022: loss before tax:
GBP0.4m) an increase of GBP1.4m versus the same period in 2022.
The key driver of the increase being contract revenue which was
GBP43.0m (2022: GBP32.1m). The growth predominantly coming from our
Rail and Energy divisions. Overall gross profit from contract
revenues increased to GBP6.1m (2022: GBP3.7m).
UK recruitment
T he UK Recruitment segment delivered increased revenues of
GBP41.8m (2022: GBP31.1m) which were converted to significantly
improved profit from operations of GBP2.2m (2022: GBP0.6m).
Ganymede Rail has worked with Network Rail to successfully
address issues that severely impacted the division in 2022, such as
fuel and general price increases coupled with the significant
disruption caused by Network Rail's decision to award all suppliers
new contract delivery areas in 2022. This, together with growth
with other clients, has resulted in a significantly improved
performance both in terms of revenues and profits in the first half
of 2023. Revenues increased to GBP28.4m (2022: GBP21.1m). Gross
profit was GBP3.7m (2022: GBP2.2m) and gross margin was improved at
13% (2022: 10%). The division delivered a GBP1.5m increase in
profit compared to the same period in 2022. Within the Rail
division, Ganymede's signalling labour supply business continued to
grow with a new regional office being opened to support that
growth.
Ganymede Energy continued its growth trajectory in the first
half of 2023. It increased first half revenues by 47% to GBP8.4m
(2022: GBP5.7m), delivered gross profits of GBP1.8m (2022: GBP1.2m)
and its gross profit margin increased to 22% (2022: 20%). The
division further delivered a 75% uplift in profit compared to same
period in 2022 GBP0.7m (2022: GBP0.4m).
The division's white-collar recruitment, serviced by its ATA
brand continued to perform well with client demand remaining strong
across permanent and temporary UK recruitment. The division
delivered revenues of GBP4.3m (2022: GBP3.5m) with the increase
mainly coming from growth in temporary recruitment. Gross profits
overall grew to GBP1.5m (2022: GBP1.3m). As a result of the
increased proportion of temporary revenues the gross margin reduced
to 34% (2022: 38%). Profit for the period was maintained at GBP0.3m
(2022: GBP0.3m) as the division continued to invest in staff
numbers for future growth.
International recruitment
International recruitment delivered revenues of GBP2.6m (2022:
GBP2.5m) , slightly higher than the same period in 2022 as they
steadily have increased revenues under new framework agreements.
Profit from operations also showed a slight improvement at
GBP238,000 (2022: GBP169,000).
UK Central Services
Within UK Central Services, our hotel and conference centre
business delivered revenues of GBP1.2m (2022: GBP0.9m) as the good
levels of activity relating to conferences, events and bedroom
sales seen throughout 2022 continued in the first half of 2023.
Gross profit increased to GBP0.6m (2022: GBP0.5m) and gross margin
was maintained at 54%. Our hotel and conference centre in Derby
benefits from a long lease that was taken out in 2018 and has 10
years left to run. Rents for the entire lease period were fixed at
inception and as such are now even more competitive.
Taxation
The total tax charge for the period is estimated at GBP254,000
(2022: GBP59,000). This is higher than would be expected if the
standard tax rate was applied to the result for the period, as
explained in note 3.
Earnings per share
The basic earnings per share figure is 5.20p (2022: loss per
share of 2.43p). The diluted earnings per share is 5.19p (2022:
loss per share of 2.43p).
Dividends
No dividends were paid in the period (2022: Nil). The Directors
propose an interim dividend of 1.0p per share (2022: Nil). The
interim dividend will be paid on 1 September 2023 to shareholders
on the register on 4 August 2023.
Statement of financial position
Net working capital has increased to GBP5.4m (2022: GBP4.7m).
There has been an increase in debtors reflecting the increase in
revenues versus the same period last year and an improvement in key
customer aged balances. Net assets have increased to GBP6.9m (2022:
GBP6.2m). The Group has no term debt and is financed using its
invoice discounting and overdraft facilities with HSBC. At 30 June
2023 there were no overdrafts in use and invoice discounting funds
in use were significantly reduced at GBP1.5m (2022: GBP3.5m).
Cash flow
The cash inflow from operating activities of GBP2.1m (2022:
outflow GBP0.6m) for the six-month period reflects increased
revenues and the improvement noted above in key customer
balances.
Financing
The Group's current bank facilities comprise an overdraft of
GBP50,000 and a confidential invoice discounting facility of up to
GBP12m with HSBC at a discount margin of 1.6% above base. The Board
closely monitors the level of facility utilisation and availability
to ensure there is enough headroom to manage current operations and
future needs of the business. The Group continues to be focussed on
cash generation and building a robust statement of financial
position to protect the business.
Own shares held
The cost of the Group's own shares purchased through the
Employee Benefit Trust is shown as a deduction from equity. 193,615
options were exercised during the period. The balance of GBP100,388
on the own shares held reserve within equity reflects 143,412
shares remaining in the EBT that will be used to satisfy future
exercises.
Going concern
The Group's current bank facilities include a net overdraft
facility across the Group of GBP50,000 and an invoice discounting
facility with HSBC providing of up to GBP12m, based on a percentage
of good book debts, at a margin of 1.6% above base. The Board
closely monitors the level of facility utilisation and availability
to ensure there is enough headroom to manage current operations and
support the growth of the business.
Given the uncertainty and mixed opinion about short and
medium-term prospects for the UK economy influenced by the
cost-of-living crisis, widespread strike action, the looming threat
of a recession and other geo-political events, in addition to the
established budgeting and forecasting processes, which considers a
range of plausible events and circumstances, a reverse stress test
has been undertaken. This shows that, assuming a continuation of
the current facilities, the Group has access to sufficient cash and
facilities to withstand a 20% reduction against the 2022 revenues
without any significant restructuring or other cost reduction
measures.
In assessing the risks related to the continued availability of
the current facilities, the Board have taken into consideration the
existing relationship with HSBC and the strength of the security
provided, also taking into account the quality of the Group's
customer base. Based on their enquiries, the Board have concluded
that sufficient facilities will continue to remain available to the
Group and therefore the going concern basis of preparation remains
appropriate and no material uncertainty exists.
As a result, the going concern basis continues to be appropriate
in preparing the interim results.
S L Dye
Group Finance Director
26 July 2023
Consolidated statement of comprehensive income:
Six-month Six-month Year-ended
period period 31
ended 30 ended 30 December
June 2023 June 2022 2022
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ------- ------------ ------------ ------------
Revenue 2 45,561 34,406 71,907
Cost of sales 2 (37,475) (28,852) (60,132)
---------------------------------- ------- ------------ ------------ ------------
Gross profit 2 8,086 5,554 11,775
Other operating income 2 - - 6
Administrative expenses 2 (6,958) (5,859) (12,024)
---------------------------------- ------- ------------ ------------ ------------
Profit / (loss) from operations 2 1,128 (305) (243)
Finance expense (127) (101) (212)
---------------------------------- ------- ------------ ------------ ------------
Profit / (loss) before tax 1,001 (406) (455)
Tax expense 3 (254) 59 104
---------------------------------- ------- ------------ ------------ ------------
Total profit / (loss) and
other comprehensive income
for the period attributable
to owners of the parent 747 (347) (351)
---------------------------------- ------- ------------ ------------ ------------
Earnings per ordinary share
Basic 5.20p (2.43p) (2.45p)
---------------------------------- ------- ------------ ------------ ------------
Fully diluted 5.19p (2.43p) (2.45p)
---------------------------------- ------- ------------ ------------ ------------
Consolidated statement of changes in equity for the six months
ended 30 June 2023:
Share Share Own Capital Share Profit Total
capital premium shares redemption based and equity
held reserve payment loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ------------- ---------- --------- ---------
Balance at
1 January 2023 146 120 (236) 50 122 5,993 6,195
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total comprehensive
income for
the period - - - - - 747 747
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Transactions
with owners:
Share options
exercised - - 135 - (92) (43) -
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total transactions
with owners - - 135 - (92) (43) -
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2023 (Unaudited) 146 120 (101) 50 30 6,697 6,942
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the six months
ended 30 June 2022:
Share Share Own Capital Share Profit Total
capital premium shares redemption based and equity
held reserve payment loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 January 2022 146 120 (236) 50 146 6,320 6,546
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total comprehensive
income for
the period - - - - - (347) (347)
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2022 (Unaudited) 146 120 (236) 50 146 5,973 6,199
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the year ended
31 December 2022:
Share Share Own Capital Share Retained Total
capital premium shares redemption based earnings equity
held reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ------------- ---------- ----------- ---------
Balance at
1 January
2022 146 120 (236) 50 146 6,320 6,546
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total comprehensive
expense for
the year - - - - - (351) (351)
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Transactions
with owners:
Share options
cancelled - - - - (24) 24 -
Total transactions
with owners - - - - (24) 24 -
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
At 31 December
2022 146 120 (236) 50 122 5,993 6,195
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Consolidated statement of financial position:
As at As at As at
30 June 30 June 31 December
2023 2022 2022
Unaudited Audited
Unaudited
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ --------------
Assets
Non-current
Goodwill 132 132 132
Other intangible assets 18 43 28
Property, plant, and equipment 1,504 1,574 1,544
Right of use assets 2,300 2,627 2,491
Deferred tax asset 8 40 210
---------------------------------- ------------ ------------ --------------
3,962 4,416 4,405
Current
Inventories 17 11 15
Trade and other receivables 15,932 13,610 15,388
Cash and cash equivalents 499 681 467
---------------------------------- ------------ ------------ --------------
16,448 14,302 15,870
Total assets 20,410 18,718 20,275
---------------------------------- ------------ ------------ --------------
Liabilities
Current
Trade and other payables (9,117) (5,926) (7,875)
Lease liabilities (303) (176) (303)
Corporation tax (54) 66 -
Current borrowings (1,525) (3,547) (3,132)
---------------------------------- ------------ ------------
(10,999) (9,583) (11,310)
Non-current liabilities
Lease liabilities (2,277) (2,801) (2,576)
Deferred tax liabilities (192) (135) (194)
---------------------------------- ------------ ------------ --------------
Total liabilities (13,468) (12,519) (14,080)
---------------------------------- ------------ ------------ --------------
Net assets 6,942 6,199 6,195
---------------------------------- ------------ ------------ --------------
Equity
Share capital 146 146 146
Share premium 120 120 120
Capital redemption reserve 50 50 50
Own shares held (101) (236) (236)
Share based payment reserve 30 146 122
Profit and loss account 6,697 5,973 5,993
Total equity 6,942 6,199 6,195
---------------------------------- ------------ ------------ --------------
Consolidated statement of cash flows:
Six-month Six-month Year ended
period period 31 December
ended 30 ended 30 2022
June 2023 June 2022 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit / (loss) before tax 1,001 (406) (455)
Adjustments for:
Depreciation, loss on disposal
and amortisation 450 413 857
Finance expense 127 101 212
Change in inventories (2) 10 6
Change in trade and other receivables (544) (129) (1,907)
Change in trade and other payables 1,242 (504) 1,445
----------------------------------------- ------------ ------------ --------------
Cash inflow/(outflow) from operations 2,274 (515) 158
Interest paid (127) (101) (212)
Net cash inflow/(outflow) from
operating activities 2,147 (616) (54)
----------------------------------------- ------------ ------------ --------------
Cash flows from investing activities
Purchases of property, plant and
equipment and intangibles (209) (250) (417)
Net cash used in investing activities (209) (250) (417)
Cash flows from financing activities
Movement on invoice discounting
facility (1,607) 823 872
Movement on perpetual bank overdrafts* - (104) (568)
Payments of lease liabilities (299) (118) (312)
Net cash (outflow)/inflow from
financing activities (1,906) 601 (8)
----------------------------------------- ------------ ------------ --------------
Net increase/(decrease) in cash
and cash equivalents 32 (265) (479)
----------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at beginning
of period 467 946 946
----------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at end
of period 499 681 467
----------------------------------------- ------------ ------------ --------------
*there was no perpetual bank overdraft remaining at 1 January
2023 as a result of cash inflows in 2022.
Notes to the interim statement for the six months ended 30 June
2023:
1. Accounting policies
a) General information
RTC Group Plc is incorporated and domiciled in England and its
shares are publicly traded on AIM. The registered office address is
The Derby Conference Centre, London Road, Derby, DE24 8UX. The
company's registered number is 02558971. The principal activities
of the Group are described in note 2.
The Board consider the principal risks and uncertainties
relating to the Group for the next six months to be the same as
detailed in our last Annual Report and Accounts to 31 December
2022.
b) Basis of preparation
The unaudited interim Group financial information of RTC Group
Plc is for the six months ended 30 June 2023 and does not comprise
statutory accounts within the meaning of S.435 of the Companies Act
2006. The unaudited interim Group financial statements have been
prepared in accordance with the AIM rules and have not been
reviewed by the Group's auditors. This report should be read in
conjunction with the Group's Annual Report and Accounts for the
year ended 31 December 2022, which have been prepared in accordance
with International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
Going concern
The Group's current bank facilities include a net overdraft
facility across the Group of GBP50,000 and an invoice discounting
facility with HSBC providing of up to GBP12m, based on a percentage
of good book debts, at a margin of 1.6% above base. The Board
closely monitors the level of facility utilisation and availability
to ensure there is enough headroom to manage current operations and
support the growth of the business.
Given the uncertainty and mixed opinion about short and
medium-term prospects for the UK economy influenced by the
cost-of-living crisis, widespread strike action, the looming threat
of a recession and other geo-political events, in addition to the
established budgeting and forecasting processes, which considers a
range of plausible events and circumstances, a reverse stress test
has been undertaken. This shows that, assuming a continuation of
the current facilities, the Group has access to sufficient cash and
facilities to withstand a 20% reduction against the 2022 revenues
without any significant restructuring or other cost reduction
measures.
In assessing the risks related to the continued availability of
the current facilities, the Board have taken into consideration the
existing relationship with HSBC and the strength of the security
provided, also taking into account the quality of the Group's
customer base. Based on their enquiries, the Board have concluded
that sufficient facilities will continue to remain available to the
Group and therefore the going concern basis of preparation remains
appropriate and no material uncertainty exists.
As a result, the going concern basis continues to be appropriate
in preparing the interim results.
These unaudited interim Group financial statements were approved
for issue on 26 July 2023. No significant events, other than those
disclosed in this document, have occurred between 30 June 2023 and
this date.
c) Comparatives
The comparative figures for the year ended 31 December 2022 do
not constitute statutory accounts within the meaning of S.435 of
the Companies Act 2006, but they have been derived from the audited
financial statements for that year, which have been filed with the
Registrar of Companies. The report of the auditor was unqualified
and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006 nor a reference to any matters which the auditor
drew attention by way of emphasis of matter without qualifying
their report.
d) Accounting policies
In preparing these interim financial statements, the Board have
considered the impact of new standards which will be applied in the
2023 Annual Report and Accounts and there are not expected to be
any changes in the accounting policies compared to those applied at
31 December 2022.
A full description of accounting policies is contained with our
2022 Annual Report and Accounts which is available on our
website.
This interim announcement has been prepared in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS as
effective for periods beginning on or after 1 January 2023.
2. Segment analysis
The business is split into three operating segments, with
recruitment being split by geographical area. This reflects the
integrated approach to the Group's recruitment business in the UK
and independent delivery of overseas business. Three operating
segments have therefore been agreed, based on the geography of the
business unit: United Kingdom, International and Central
Services.
This is consistent with the reporting for management purposes,
with the Group organised into two reportable segments, Recruitment
and Central Services, which are strategic business units that offer
different products and services. They are managed separately
because each segment has a different purpose within the Group and
requires different technologies and marketing strategies.
Segment operating profit is the profit earned by each operating
segment defined above and is the measure reported to the Group's
Board, the Group's Chief Operating Decision Maker for performance
management and resource allocation purposes. The Group manages the
trading performance of each segment by monitoring operating
contribution and centrally manages working capital, financing, and
equity.
Revenues within the recruitment operating segment have similar
economic characteristics and share a majority of the aggregation
criteria set out in IFRS 8:12 in particular the nature of the
products and services, the type or class of customers, the country
in which the service is delivered, and the processes utilised to
deliver the services and the regulatory environment for the
services.
The purpose of the Central Services segment is to provide all
central services for the Group including the Group's head office
facilities in Derby. It also generates income from excess space at
the Derby site including rental and hotel and conferencing
facilities.
During the first half of 2023, one customer in the UK
Recruitment segment contributed 10% or more of that segment's
revenues being GBP11.8m (2022: GBP9.3m) and one customer in the
International Recruitment sector contributed 10% or more of that
segment's revenues being GBP1.0m (2022: GBP1.0m).
Revenue, gross profit, and operating profit delivery by
geography f or the six-month period ended 30 June 2023:
GBP'000 UK UK International Total Group
Recruitment Central Recruitment
Services
-------------------------------- -----------
Revenue 41,797 1,163 2,601 45,561
Cost of sales (34,793) (535) (2,147) (37,475)
-------------------------------- -------------- ----------- --------------- -------------
Gross profit 7,004 628 454 8,086
Administrative expenses (4,587) (1,706) (215) (6,508)
Amortisation of intangibles (12) - - (12)
Depreciation of right of
use assets (74) (125) - (199)
Depreciation (162) (76) (1) (239)
-------------------------------- -------------- ----------- --------------- -------------
Total administrative expenses (4,835) (1,907) (216) (6,958)
-------------------------------- -------------- ----------- --------------- -------------
Profit from operations 2,169 (1,279) 238 1,128
-------------------------------- -------------- ----------- --------------- -------------
Segment profit from operations above represents the profit
earned by each segment without allocation of Group administration
costs or finance costs.
Segment information for the six months ended 30 June 2022:
GBP'000 UK UK International Total Group
Recruitment Central Recruitment
Services
-------------------------------- -----------
Revenue 31,065 866 2,475 34,406
Cost of sales (26,321) (396) (2,135) (28,852)
-------------------------------- -------------- ----------- --------------- -------------
Gross profit 4,744 470 340 5,554
Administrative expenses (3,933) (1,345) (168) (5,446)
Amortisation of intangibles (12) - - (12)
Depreciation of right of
use assets (65) (114) - (179)
Depreciation (124) (95) (3) (222)
-------------------------------- -------------- ----------- --------------- -------------
Total administrative expenses (4,134) (1,554) (171) (5,859)
-------------------------------- -------------- ----------- --------------- -------------
Profit from operations 610 (1,084) 169 305
-------------------------------- -------------- ----------- --------------- -------------
Segment information for the year ended 31 December 2022:
GBP'000 UK UK International Total Group
Recruitment Central Recruitment
Services
---------------------------------- ----------- -------------
Revenue 64,764 1,979 5,164 71,907
Cost of sales (54,878) (912) (4,342) (60,132)
---------------------------------- -------------- ----------- --------------- -------------
Gross profit 9,886 1,067 822 11,775
Other operating income* - 6 - 6
Administrative expenses (7,948) (2,883) (341) (11,172)
Amortisation of intangibles (46) - - (46)
Depreciation of right of
use assets (144) (240) - (384)
Depreciation (261) (157) (4) (422)
---------------------------------- -------------- ----------- --------------- -------------
Total administrative expenses (8,399) (3,280) (345) (12,024)
---------------------------------- -------------- ----------- --------------- -------------
Profit / (loss) from operations 1,487 (2,207) 477 (243)
---------------------------------- -------------- ----------- --------------- -------------
*Other operating income represents Government Grants.
Recruitment revenues are generated from permanent and temporary
recruitment and long-term contracts for labour supply. Within
Central Services revenues are generated from the rental of excess
space and hotel and conferencing at the Derby site, described as
Other below. Revenue and gross profit by service classification for
management purposes:
Revenue Six months Six months Year ended
ended 30 ended 30 31
June 2023 June 2022
(Unaudited) (Unaudited)
December
2022
GBP'000 (Audited)
Permanent placements 1,401 1,414 2,706
Contract 42,997 32,126 67,222
Other 1,163 866 1,979
----------------------- -------------- -------------- ------------
45,561 34,406 71,907
----------------------- -------------- -------------- ------------
Gross profit Six months Six months Year ended
ended 30 ended 30 31 December
June 2023 June 2022
(Unaudited) (Unaudited)
2022
(Audited)
GBP'000
----------------------- -------------- -------------- --------------
Permanent placements 1,401 1,414 2,706
Contract 6,057 3,670 8,002
Other 628 470 1,067
----------------------- -------------- -------------- --------------
8,086 5,554 11,775
----------------------- -------------- -------------- --------------
3. Income tax
Six-month Six-month Year ended
period period 31
ended 30
June 2023
(Unaudited)
ended 30 December
June 2022 2022
(Unaudited)
Continuing operations (Audited)
---------------------------------------- -------------- --------------- ------------
GBP'000 GBP'000 GBP'000
---------------------------------------- -------------- --------------- ------------
Analysis of tax:
Current tax
UK corporation tax 54 (66) -
(66) -
Deferred tax
Origination and reversal of temporary
differences 200 7 (104)
Tax 254 (59) (104)
---------------------------------------- -------------- --------------- ------------
Factors affecting the tax expense
The tax assessed for the six-month period ended 30 June 2023 is
higher than (2022: higher than) would be expected by multiplying
profit by the standard rate of corporation tax in the UK of 25%
(2022: 19%).
The differences are explained below:
Six-month Six-month Year ended
period ended period ended 31 December
30 June 2023 30 June 2022 2022
Unaudited Unaudited Audited
------------------------------------ --------------- --------------- --------------
Factors affecting tax expense GBP'000 GBP'000 GBP'000
------------------------------------ --------------- --------------- --------------
Result for the period before
tax 1,001 (406) (455)
------------------------------------ --------------- --------------- --------------
Profit multiplied by standard
rate of tax of 25% (2022: 19%) 250 (77) (86)
Non-deductible expenses 39 18 50
Tax credit on exercise of options (35) - -
Effect of change in deferred
tax rate - - 13
Adjustment in respect of previous
periods - (81)
Tax charge for the period 254 (59) (104)
------------------------------------ --------------- --------------- --------------
4. Borrowings
Included in current borrowings are bank overdrafts and an
invoice discounting facility which is secured by a cross guarantee
and debenture over all Group companies. There have been no defaults
or breaches of the terms of the facility during the current or
prior period.
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END
IR RAMFTMTITBLJ
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