TIDMRTC
RNS Number : 3578G
RTC Group PLC
26 July 2021
This announcement contains inside information as stipulated
under The Market Abuse Regulation (EU No. 596/2014).
26 July 2021
RTC Group Plc
("RTC", "the Company" or "the Group")
Interim Results for the Six Months Ended 30 June 2021
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 2021.
Summary:
-- Group revenue from continuing operations was GBP40.5m (2020: GBP39.9m);
-- Profit before tax was GBP0.2m (2020: GBP0.2m);
-- Net assets GBP6.7m (2020: GBP6.5m);
-- Net cash outflow from operating activities GBP2.1m (2020: GBP4.3m inflow); and
-- Basic earnings per share 0.76p (2020: 1.20p).
No dividends were paid in the period (2020: Nil). At this time,
no interim dividend is proposed for the year ended 31 December 2021
(2020: Nil).
Commenting on the results, Bill Douie, Chairman, said:
" The first half of 2021 has been navigated satisfactorily in
the continuing environment of the current pandemic. Although the
wave which commenced in September/October 2020 did not reach a peak
until part way through the first quarter, the general economic
environment remained very constrained and much of our business
continued to be materially adversely affected. Happily, our strong
emphasis on infrastructure generally, and railway, which has
continued to perform at levels much as in 2020, was aided by early
signs of recovery in branch UK recruitment and has made the
profitable result for the period possible. Although there is still
not a positive environment for the Derby Conference Centre and
Hotel, our International Staffing Solutions business has continued
at profitable levels.
During the first six months more positive news on the vaccine
roll-out has raised hopes of a period of recovery with a slow and
bumpy return to improved profitability. However, there are
additional head winds which present challenges for the immediate
future and beyond.
Shareholders will be aware that all NATO forces have now been
withdrawn from Afghanistan, which will, to all intents and
purposes, herald the end of our main business in that country which
has served us well for many years. Replacing that revenue is a high
priority and whilst the Group continues to service other existing
overseas contracts and secure replacement business, we must expect
a period of lag in replacing this revenue.
Shareholders will also be aware that this year we are in the
position of having to renew our contract with Network Rail. The
tender process has now been completed and we should know the
outcome of Network Rails decision in the second half of the
year.
As was explained at the time of our Annual General Meeting in
April, your Board is fully aware that the market in our shares is
very limited. Accordingly, at these uncertain times, we have
responded by renewing our authority to purchase our shares in the
market up to 2,195,091 shares an amount equivalent to 14.99% of our
outstanding capital at the time of the last Annual General
Meeting.
Other than the two factors mentioned above, the outcome for the
remainder of 2021 depends on whether the present optimism over the
vaccine roll-out and the consequential economic forecast plays out
as the Government hopes. We will continue to manage the Group with
caution and determination."
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
Panmure Gordon (Broker) Tel: 020 7886 2500
Nick Lovering
www.panmure . com
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.
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 2021
The first half of 2021 has been navigated satisfactorily in the
continuing environment of the current pandemic. Although the wave
which commenced in September/October 2020 did not reach a peak
until part way through the first quarter, the general economic
environment remained very constrained and much of our business
continued to be materially adversely affected. Happily, our strong
emphasis on infrastructure generally, and railway, which has
continued to perform at levels much as in 2020, was aided by early
signs of recovery in branch UK recruitment and has made the
profitable result for the period possible. Although there is still
not a positive environment for the Derby Conference Centre and
Hotel, our International Staffing Solutions business has continued
at profitable levels.
During the first six months more positive news on the vaccine
roll-out has raised hopes of a period of recovery with a slow and
bumpy return to improved profitability. However, there are
additional head winds which present challenges for the immediate
future and beyond.
Shareholders will be aware that all NATO forces have now been
withdrawn from Afghanistan, which will, to all intents and
purposes, herald the end of our main business in that country which
has served us well for many years. Replacing that revenue is a high
priority and whilst the Group continues to service other existing
overseas contracts and secure replacement business, we must expect
a period of lag in replacing this revenue.
Shareholders will also be aware that this year we are in the
position of having to renew our contract with Network Rail. The
tender process has now been completed and we should know the
outcome of Network Rails decision in the second half of the
year.
As was explained at the time of our Annual General Meeting in
April, your Board is fully aware that the market in our shares is
very limited. Accordingly, at these uncertain times, we have
responded by renewing our authority to purchase our shares in the
market up to 2,195,091 shares an amount equivalent to 14.99% of our
outstanding capital at the time of the last Annual General
Meeting.
Other than the two factors mentioned above, the outcome for the
remainder of 2021 depends on whether the present optimism over the
vaccine roll-out and the consequential economic forecast plays out
as the Government hopes. We will continue to manage the Group with
caution and determination
W J C Douie
Chairman
25 July 2021
Finance Director's statement
Six months ended 30 June 2021
Highlights
Despite the ongoing impact of the Covid-19 pandemic ("the
pandemic") on parts of the Group, I am pleased to report that we
delivered revenues of GBP40.5m (2020: GBP39.9m) and a profit before
tax of GBP0.2m (2020: GBP0.2m) for the six months ended 30 June
2021 with significantly reduced support from the Government.
Grants received through the Coronavirus Job Retention Scheme in
the period were GBP0.3m (2020: GBP1.5m) as we utilised flexible
furlough arrangements to get employees back into work for their own
wellbeing as well as the benefit of the business and contractors
paid under PAYE were also predominantly back at work.
The i mpact of the pandemic on the UK Recruitment segment was
mixed. Overall, the segment delivered increased revenues of
GBP34.2m (2020: GBP31.2m) which was converted to profit from
operations of GBP1.5m (2020: 1.2m). Throughout the period we
continued to provide contract workers to the infrastructure and
rail sectors at slightly higher levels than Q4 2020, and general UK
recruitment and smart-meter installation activities gradually
picked up with promising levels of UK recruitment in June
especially.
International recruitment saw minimal impact of the pandemic but
the withdrawal of the US from Afghanistan in Q2 resulted in reduced
revenues of GBP6.0m (2020: GBP8.3m) . P rofit from operations
reduced to GBP0.3m (2020: GBP0.5m).
Within UK Central Services , whilst our hotel and conference
centre provided bedroom and meeting room facilities to key workers
in line with Government guidelines, overall business levels were
depressed due to Government guidance curtailing conference and
event activities. Revenue generated by the segment was GBP0.3m
(2020: GBP0.4m) reflecting the fact that in 2020 only Q2 trading
was impacted by the pandemic, whereas in 2021 restrictions on
hospitality were in place for the entire period.
Interest cover
Interest cover was 3.1 times (2020: 3.5 times).
Taxation
The total tax charge for the period is estimated at GBP53,000
(2020: GBP60,000). This is higher than would be expected if the
standard tax rate was applied to the profits for the period, as
explained in note 3.
Earnings per share
The basic earnings per share figure is 0.76p (2020: 1.20p). The
diluted earnings per share 0.75p (2020: 1.07p).
Dividends
No dividends were paid in the period (2020: Nil). At this time,
no interim dividend is proposed for the year ended 31 December 2021
(2020: Nil).
Statement of financial position
Net working capital has increased to GBP4.8m (2020: GBP4.3m).
There has been an increase in debtors since the start of the period
due to the bedding in of a key client's new payment process which
has slowed payment terms temporarily. Net assets have increased to
GBP6.7m (2020: GBP6.5m). The Group has no term debt and is financed
using its invoice discounting and overdraft facilities with
HSBC.
Cash flow
The cash outflow from operating activities of GBP2.1m (2020:
GBP4.3m inflow) for the six-month period reflects an increase in
payment terms for a key client (as noted above) together with the
repayment of GBP0.5m of the GBP1.5 m VAT deferred in 2020 under the
Government VAT deferral Scheme and payment of the Q1 2021 VAT of
GBP2.2m. No VAT was paid in respect of Q1 in 2020. These factors,
and the cash cancellation of options detailed below, have
contributed to the increase in the amount of invoice finance
required to support activities.
Cancellation of employee share options
On 24 May 2021, the Group announced an offer to all employee
with share options that had vested to cancel their options for a
one-off cash consideration of 46.5p per option share, being the
mid-market closing price on 21 May 2021, the last business day
prior to the announcement . As a result 1,603,008 options were
cancelled and the cash consideration was paid to the relevant
employees as remuneration through the PAYE system. The total of the
remuneration payments made was GBP0.7m plus employers NI of
GBP0.1m.
Financing
The Group's current bank facilities comprise an overdraft of
GBP50,000 and a confidential invoice discounting facility of up to
GBP12.0m 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.
The Group has continued to protect its financial position by
deferring non-essential capital expenditure and making use of the
Government's Coronavirus Job Retention Scheme by using flexible
furlough arrangements, particularly in its hotel and conferencing
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. No
options were exercised during the period. The balance of GBP235,918
on the own shares held reserve within equity reflects 337,027
shares remaining in the EBT that will be used to satisfy future
exercises.
Going concern
The Board continues to review and monitor the risks and
sensitivities associated with the pandemic and its potential impact
on the Group. Given the Group's trading performance in the
six-month period to 30 June 2021, Board consideration of
forward-looking forecast scenarios for the second half of the year
and beyond and its financing facility of GBP12m, the Group expects
to be able to continue in operational existence for the foreseeable
future, being a period of at least 12 months from the date of
approval of the accounts. As a result, the going concern basis
continues to be appropriate in preparing the interim results.
S L Dye
Group Finance Director
25 July 2021
Consolidated statement of comprehensive income:
Six-month Six-month Year ended
period period 31
ended 30 ended 30 December
June 2021 June 2020 2020
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
--------------------------------------- ------- ------------ ------------ ------------
Revenue 2 40,491 39,858 81,356
Cost of sales 2 (34,786) (34,211) (71,117)
--------------------------------------- ------- ------------ ------------ ------------
Gross profit 2 5,705 5,647 10,239
Other operating income 2 311 1,524 2,477
Administrative expenses 2 (5,776) (6,847) (11,663)
--------------------------------------- ------- ------------ ------------ ------------
Profit from operations 2 240 324 1,053
Finance expense (78) (93) (183)
--------------------------------------- ------- ------------ ------------ ------------
Profit before tax 162 231 870
Tax expense 3 (53) (60) (204)
--------------------------------------- ------- ------------ ------------ ------------
Total profit and other comprehensive
income for the period attributable
to owners of the parent 109 171 666
--------------------------------------- ------- ------------ ------------ ------------
Earnings per ordinary share 4
Basic 0.76p 1.20p 4.66p
--------------------------------------- ------- ------------ ------------ ------------
Fully diluted 0.75p 1.07p 4.13p
--------------------------------------- ------- ------------ ------------ ------------
Consolidated statement of changes in equity for the six months
ended 30 June 2021:
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 2021 146 120 (236) 50 718 6,278 7,076
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total comprehensive
income for
the period - - - - - 109 109
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Transactions
with owners:
Share options
cancelled - - - (782) 37 (745)
Share based
payment charge - - - - 210 - 210
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total transactions
with owners - - - (572) 37 (535)
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2021 (Unaudited) 146 120 (236) 50 146 6,424 6,650
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the six months
ended 30 June 2020:
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 2020 146 120 (264) 50 557 5,627 6,236
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total comprehensive
income for
the period - - - - - 171 171
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Transactions
with owners:
Share options
exercised - - 28 - (4) (15) 9
Share based
payment charge - - - - 67 - 67
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Total transactions
with owners - - 28 - 63 (15) 76
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2020 (Unaudited) 146 120 (236) 50 620 5,783 6,483
---------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the year ended
31 December 2020:
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
2020 146 120 (264) 50 557 5,627 6,236
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total comprehensive
income for
the year - - - - - 666 666
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Transactions
with owners:
Share options
exercised - - 28 - (4) (15) 9
Share based
payment charge - - - - 165 - 165
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total transactions
with owners - - 28 - 161 (15) 174
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
At 31 December
2020 (Audited) 146 120 (236) 50 718 6,278 7,076
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Consolidated statement of financial position:
As at As at As at
30 June 30 June 31 December
2021 2020 2020
Unaudited Audited
Unaudited
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ --------------
Assets
Non-current
Goodwill 132 132 132
Other intangible assets 101 196 149
Property, plant, and equipment 1,602 1,694 1,648
Right of use assets 2,797 2,965 2,993
Deferred tax asset 30 106 149
---------------------------------- ------------ ------------ --------------
4,662 5,093 5,071
Current
Inventories 8 10 7
Trade and other receivables 15,084 10,459 13,404
Cash and cash equivalents 737 2,022 2,827
---------------------------------- ------------ ------------ --------------
Total current assets 15,829 12,491 16,238
Total assets 20,491 17,584 21,309
---------------------------------- ------------ ------------ --------------
Liabilities
Current
Trade and other payables (8,434) (6,772) (9,706)
Lease liabilities (276) (261) (276)
Corporation tax (147) (352) (218)
Current borrowings (2,171) (795) (967)
---------------------------------- ------------ ------------ --------------
Total current liabilities (11,028) (8,180) (11,167)
Non-current liabilities
Lease liabilities (2,686) (2,836) (2,944)
Deferred tax liabilities (127) (85) (122)
---------------------------------- ------------ ------------ --------------
Net assets 6,650 6,483 7,076
---------------------------------- ------------ ------------ --------------
Equity
Share capital 146 146 146
Share premium 120 120 120
Capital redemption reserve 50 50 50
Own shares held (236) (236) (236)
Share based payment reserve 146 620 718
Profit and loss account 6,424 5,783 6,278
Total equity 6,650 6,483 7,076
---------------------------------- ------------ ------------ --------------
Consolidated statement of cash flows:
Six-month Six-month Year ended
period period 31 December
ended 30 ended 30 2020
June 2021 June 2020 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 162 231 870
Adjustments for:
Depreciation, loss on disposal
and amortisation 410 370 763
Finance expense 78 93 183
Employee equity settled share options
charge 210 67 165
Change in inventories (1) - 3
Change in trade and other receivables (1,680) 5,350 2,405
Change in trade and other payables (1,169) (1,721) 1,213
----------------------------------------- ------------ ------------ --------------
Cash (outflow)/inflow from operations (1,990) 4,390 5,602
Income tax paid - - (284)
Interest paid (78) (93) (183)
Net cash (outflow)/inflow from
operating activities (2,068) 4,297 5,135
----------------------------------------- ------------ ------------ --------------
Cash flows from investing activities
Purchases of property, plant and
equipment and intangibles (120) (174) (293)
Net cash used in investing activities (120) (174) (293)
Cash flows from financing activities
Movement on invoice discounting
facility 1,280 (2,818) (2,818)
Movement on perpetual bank overdrafts (76) 43 215
Amounts paid to cancel vested share
options (848) - -
Payments of lease liabilities (258) (133) (219)
Proceeds from exercise of share
options - 9 9
Net cash inflow/(outflow) from
financing activities 98 (2,899) (2,813)
----------------------------------------- ------------ ------------ --------------
Net (decrease)/increase in cash
and cash equivalents (2,090) 1,224 2,029
----------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at beginning
of period 2,827 798 798
----------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at end
of period 737 2,022 2,827
----------------------------------------- ------------ ------------ --------------
Notes to the interim statement for the six months ended 30 June
2021:
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
2020.
b) Basis of preparation
The unaudited interim Group financial information of RTC Group
Plc is for the six months ended 30 June 2021 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 2020, 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 Board continues to review and monitor the risks and
sensitivities associated with the pandemic and its potential impact
on the Group. Given the Group's trading performance in the
six-month period to 30 June 2021, Board consideration of
forward-looking forecast scenarios for the second half of the year
and beyond and its financing facility of GBP12m, the Group expects
to be able to continue in operational existence for the foreseeable
future, being a period of at least 12 months from the date of
approval of the accounts. As a result, the going concern basis
continues to be appropriate in preparing the interim results.
These unaudited interim Group financial statements were approved
for issue on 25 July 2021. No significant events, other than those
disclosed in this document, have occurred between 30 June 2021 and
this date.
c) Comparatives
The comparative figures for the year ended 31 December 2020 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
2021 Annual Report and Accounts and there are not expected to be
any changes in the accounting policies compared to those applied at
31 December 2020.
A full description of accounting policies is contained with our
2020 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 2021.
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 2021, one customer in the UK
Recruitment segment contributed 10% or more of that segment's
revenues being GBP14.8m (2020: GBP12.8m) and one customer in the
International Recruitment sector contributed 10% or more of that
segment's revenues being GBP5.7m (2020: GBP8.1m).
Revenue, gross profit, and operating profit delivery by
geography f or the six-month period ended 30 June 2021:
GBP'000 UK International UK Total Group
Recruitment Recruitment Central
Services
-------------------------------- ---------------
Revenue 34,196 5,951 344 40,491
Cost of sales (29,220) (5,368) (198) (34,786)
-------------------------------- -------------- --------------- ----------- -------------
Gross profit 4,976 583 146 5,705
Other operating income* 213 - 98 311
Administrative expenses (3,540) (286) (1,540) (5,366)
Amortisation of intangibles (14) - - (14)
Depreciation of right of
use assets (77) - (120) (197)
Depreciation (103) (2) (94) (199)
-------------------------------- -------------- --------------- ----------- -------------
Total administrative expenses (3,521) (288) (1,656) (5,465)
-------------------------------- -------------- --------------- ----------- -------------
Profit from operations 1,455 295 (1,510) 240
-------------------------------- -------------- --------------- ----------- -------------
*Other operating income represents Government Grants in respect
of the Coronavirus Job Retention Scheme.
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 2020:
GBP'000 UK International UK Total Group
Recruitment Recruitment Central
Services
-------------------------------- ---------------
Revenue 31,154 8,257 447 39,858
Cost of sales (26,638) (7,321) (252) (34,211)
-------------------------------- -------------- --------------- ----------- -------------
Gross profit 4,516 936 195 5,647
Other operating income* 1,377 - 147 1,524
Administrative expenses (4,582) (406) (1,489) (6,477)
Amortisation of intangibles (39) - - (39)
Depreciation of right of
use assets (63) - (109) (172)
Depreciation (55) (2) (102) (159)
-------------------------------- -------------- --------------- ----------- -------------
Total administrative expenses (4,739) (408) (1,700) 6,847
-------------------------------- -------------- --------------- ----------- -------------
Profit from operations 1,154 528 (1,358) 324
-------------------------------- -------------- --------------- ----------- -------------
Segment information for the year ended 31 December 2020:
GBP'000 UK International UK Total Group
Recruitment Recruitment Central
Services
--------------------------------
Revenue 64,521 16,122 713 81,356
Cost of sales (56,129) (14,421) (567) (71,117)
-------------------------------- -------------- --------------- ----------- -------------
Gross profit 8,392 1,701 146 10,239
Other operating income* 2,168 - 309 2,477
Administrative expenses (6,883) (809) (3,211) (10,903)
Amortisation of intangibles (85) - - (85)
Depreciation of right of
use assets (123) - (230) (353)
Depreciation (143) (5) (174) (322)
-------------------------------- -------------- --------------- ----------- -------------
Total administrative expenses (5,066) (814) (3,306) (9,186)
-------------------------------- -------------- --------------- ----------- -------------
Profit from operations 3,326 887 (3,160) 1,053
-------------------------------- -------------- --------------- ----------- -------------
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 2021 June 2020
(Unaudited) (Unaudited)
December
2020
GBP'000 (Audited)
Permanent placements 964 741 1,435
Contract 39,183 38,670 79,208
Other 344 447 713
----------------------- -------------- -------------- ------------
40,491 39,858 81,356
----------------------- -------------- -------------- ------------
Gross profit Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020
(Unaudited) (Unaudited)
2020
(Audited)
GBP'000
----------------------- -------------- -------------- --------------
Permanent placements 964 741 1,435
Contract 4,595 4,711 8,658
Other 146 195 146
----------------------- -------------- -------------- --------------
5,705 5,647 10,239
----------------------- -------------- -------------- --------------
3. Income tax
Six-month Six-month Year ended
period period 31
ended 30
June 2021
(Unaudited)
ended 30 December
June 2020 2020
(Unaudited)
Continuing operations (Audited)
---------------------------------------- -------------- --------------- ------------
GBP'000 GBP'000 GBP'000
---------------------------------------- -------------- --------------- ------------
Analysis of tax:
Current tax
UK corporation tax (71) 56 218
Adjustment in respect of previous
period - - (12)
---------------------------------------- -------------- --------------- ------------
(71) 56 206
Deferred tax
Origination and reversal of temporary
differences 124 4 (2)
Tax 53 60 204
---------------------------------------- -------------- --------------- ------------
Factors affecting the tax expense
The tax assessed for the six-month period ended 30 June 2021 is
higher than (2020: higher than) would be expected by multiplying
profit by the standard rate of corporation tax in the UK of 19%
(2020: 19%).
The differences are explained below:
Six-month Six-month Year ended
period ended period ended 31 December
30 June 2021 30 June 2020
Unaudited 2020 Unaudited Audited
------------------------------------ --------------- ----------------- --------------
Factors affecting tax expense GBP'000 GBP'000 GBP'000
------------------------------------ --------------- ----------------- --------------
Result for the period before
tax 162 231 870
------------------------------------ --------------- ----------------- --------------
Profit multiplied by standard
rate of tax of 19% (2020: 19%) 31 44 165
Non-deductible expenses 22 35 48
Tax credit on exercise of options - (3) (5)
Effect of change in deferred
tax rate - - 8
Other differences - (16) -
Adjustment in respect of previous
period - - (12)
------------------------------------ --------------- ----------------- --------------
Tax charge for the period 53 60 204
------------------------------------ --------------- ----------------- --------------
4. Earnings per share
The calculation of basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the
basic earnings per share adjusted to allow for all dilutive
potential ordinary shares.
Basic Diluted
Six-month Six-month Six-month Six-month
period ended period ended period ended period ended
30 June 2021 30 June 2020 30 June 2021 30 June
2020
Unaudited Unaudited Unaudited Unaudited
---------------
Earnings GBP'000 109 171 109 171
-------------------- --------------- --------------- ---------------
Basic weighted
average number
of shares 14,266,680 14,279,831 14,266,680 14,279,831
-------------------- --------------- --------------- --------------- ---------------
Dilutive effect
of share options - - 301,859 1,747,749
-------------------- --------------- --------------- --------------- ---------------
Fully diluted
weighted average
number of shares - - 14,568,539 16,027,580
-------------------- --------------- --------------- --------------- ---------------
Earnings per
share (pence) 0.76p 1.20p 0.75p 1.07p
-------------------- --------------- --------------- --------------- ---------------
5. 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 PPUMCMUPGGQW
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July 26, 2021 02:00 ET (06:00 GMT)
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