Final Results

RNS Number : 2908B
Impellam Group plc
16 February 2011
 



 

Impellam Group plc

 

REPORT FOR THE 52 WEEKS ENDED 31 DECEMBER 2010

PRELIMINARY RESULTS (UNAUDITED) 

Highlights

 

§ Turnover increased 6.6% to £1,113.6 million (2009: £1,044.2 million)

§ Fees from permanent placements increased 18.4% to £18.7 million (2009: £15.8 million) 

§ Conversion of gross profit into operating profit improved to 16.8% (2009: 6.0%)

§ Operating profit £30.7 million (2009: £10.0 million)

§ Cash generation from operating activities increased to £57.5 million (2009: £1.3 million)

§ Net debt decreased by £51.8 million to £17.8 million as at 31 December 2010

§ Basic earnings per share of 46.7p (2009: 23.9p)

 

Cheryl Jones, Chairman, commented:

 

"I am extremely pleased to announce that Impellam has produced a strong set of results during the first full year of trading under the Company's defined strategic initiatives.

 

Key components of the Group's strategic focus for 2010 included end-to-end operating efficiency initiatives, further brand rationalisation, controlled growth strategies and service innovation development for each selected market.  As these initiatives developed, their alignment to the overall productivity and efficiency of the business resulted in improved profit and effective cash flow generation. 

 

During 2010, the Group's turnover increased 6.6% to £1.1 billion, principally driven through the Healthcare Staffing and UK Commercial Staffing sectors.

 

Importantly, conversion of gross profit into operating profit improved over ten basis-points to 16.8% in 2010 from 6.0% in 2009. This improvement reflects the Group's planned approach towards efficiency measures and revenue quality initiatives across all segments.

 

Operating profit was £30.7 million in 2010, up from £10.0 million in 2009, with all business segments contributing to this performance.

 

The overall net cash generated from the Group's operations in 2010 was £57.5 million, which allowed net debt to be reduced to £17.8 million at the year-end.

 

I am also pleased to report that Impellam has recently extended its primary commercial banking facility through to February 2013, and the Company will repay, in full, its final obligations under the £20.0 million guaranteed secured loan notes on the due date in May 2011. 

 

Impellam is now well-positioned to take advantage of market opportunities and improving economic conditions."

 

Business Segment Results:

−    Healthcare Staffing: Turnover increased 13.1% to £202.4 million and gross profit increased by 13.5% to £32.0 million.  Operating profit increased to £11.6 million.

−    UK Staffing - Commercial: Turnover increased 11.3% to £472.9 million and gross profit increased by 9.5% to £73.6 million.  Operating profit increased to £14.9 million.

−    UK Staffing - Professional & Technical: Turnover declined 2.9% to £168.1 million and gross profit declined 1.4% to £28.5 million.  Operating profit increased to £4.3 million.

−    US Staffing: Turnover declined 0.6%* to £164.9 million and gross profit increased by 4.1%* to £34.9 million.  Operating profit increased to £4.0 million.

−    Support Services: Turnover increased 2.0% to £105.3 million and gross profit increased 37.5% to £13.2 million.  Operating profit was £2.4 million compared to a loss in 2009.

 

The Group generated £57.5 million of cash from operating activities in the year (2009: £1.3 million).

Net debt reduced by £51.8 million to £17.8 million as at 31 December 2010 (31 December 2009: £69.6 million).  In addition, the Group has outstanding letters of credit drawn against its US borrowing facilities amounting to £3.4 million (31 December 2009: £4.9 million).

 

The table below sets out the financial results for the Group by segment for the fifty two weeks to 31 December 2010.


Revenue

Gross profit

Operating profit

 


Unaudited

Audited


Unaudited

Audited


Unaudited

Audited

 

£'million

2010

2009

         %
change

2010

2009

         %
change

2010

2009

Healthcare Staffing

202.4

179.0

13.1

32.0

28.2

13.5

11.6

10.3

UK Staffing - Commercial ^

472.9

424.7

11.3

73.6

67.2

9.5

14.9

8.4

UK Staffing - Professional & Technical

168.1

173.2

(2.9)

28.5

28.9

(1.4)

4.3

3.2

US Staffing

164.9

164.1

    (0.6)*

34.9

33.1

4.1*

4.0

0.9

Support Services ^

105.3

103.2

2.0

13.2

9.6

37.5

2.4

(1.1)


1,113.6

1,044.2

6.6

182.2

167.0

9.1

37.2

21.7

Central costs







(3.9)

(2.5)

Operating profit before amortisation of client relationships and exceptional items







33.3

19.2

Amortisation of client relationships







(2.6)

(3.5)

Exceptional items







-

(5.7)

Operating profit







30.7

10.0

* measured in local currency

^ Certain prior period costs have been reclassified to conform to the current period presentation with no net impact on operating profit.  As part of the on-going review and rationalisation of the Group, certain business activities have been reclassified within the reporting segments.  Prior period comparatives have been restated accordingly.

 

Consolidated income statement

For the fifty two weeks ended 31 December 2010


Unaudited

2010

Audited

2009

Notes

£m

£m




        Restated*

Continuing operations




Revenue

2

1,113.6

1,044.2

Cost of sales


(931.4)

(877.2)



__________

__________

Gross profit


182.2

167.0

Administrative expenses


(151.5)

(157.0)



__________

__________

Operating profit

2

30.7

10.0

Operating profit before amortisation of client relationships and exceptional items


33.3

19.2

Amortisation of client relationships


(2.6)

(3.5)

Exceptional items


-

(5.7)



__________

__________

Operating profit


30.7

10.0

Finance expense


(3.9)

(4.1)



__________

__________

Profit before taxation


26.8

5.9

Taxation

3

(5.7)

4.9



__________

__________

Profit for the period

21.1



__________

__________

 

* Certain prior period costs have been reclassified to conform to the current year presentation with no net impact on operating profit.

 

Earnings per share

4

Pence

Pence

Basic and diluted


46.7

23.9



__________

__________

Consolidated statement of comprehensive income

For the fifty two weeks ended 31 December 2010



Unaudited
2010

         Audited

             2009



£m

                £m

Profit for the period


               21.1

10.8

Other comprehensive income:




Gains/(losses) recognised directly in equity




Currency translation differences - net of tax


                 0.3

(0.4)






__________

__________

Total comprehensive income for the period

21.4

10.4



__________

__________

 

Consolidated balance sheet



Unaudited

31 December 2010

Audited

31 December 2009



           £m

£m

Non-current assets




Property, plant and equipment


5.9

8.5

Goodwill


60.1

59.9

Other intangible assets


49.4

51.3

Deferred tax asset


6.1

7.5

Financial assets


2.5

3.5



_________

_________



124.0

130.7



_________

_________

Current assets




Trade and other receivables


191.9

189.7

Cash and short-term deposits


13.9

9.2



_________

_________



205.8

198.9



_________

_________

Total assets


329.8

329.6



_________

_________

Current liabilities




Trade and other payables


163.6

136.8

Taxation liabilities

2.7

1.2

Bank overdrafts and other borrowings

11.7

58.8

Short-term borrowings


20.0

                           -

Other financial liabilities


                       -

0.2

Provisions


3.7

4.6



_________

_________



201.7

201.6



_________

_________

Net current assets/(liabilities)


4.1

(2.7)



_________

_________

Non-current liabilities




Long-term borrowings


-

20.0

Other payables


1.1

0.9

Provisions


7.8

8.4

Deferred tax liability


12.4

13.3



_________

_________



21.3

42.6



_________

_________

Total liabilities


223.0

244.2



_________

_________

Net assets


106.8

85.4



_________

_________

 

 

Consolidated balance sheet (continued)



Unaudited

31 December 2010

Audited

31 December 2009



           £m

£m

Equity




Issued share capital


0.4

0.4

Share premium


15.5

15.5



_________

_________



15.9

15.9

Other reserves


93.0

92.7

Retained deficit


(2.3)

(23.4)



_________

_________

Total equity attributable to equity holders of the parent Company


106.6

85.2

Non-controlling interest


0.2

0.2



_________

_________

Total equity


106.8

85.4



_________

_________

 

Consolidated cash flow statement

For the fifty two weeks ended 31 December 2010



Unaudited

2010

Audited

2009


Notes

£m

£m

Cash flows from operating activities




Cash generated by operations

5

61.6

0.8

Taxation (paid)/refunded


(4.1)

0.5



________

________

Net cash generated by operating activities

57.5

1.3



________

________

Cash flows from investing activities




Cost of acquisition (net of cash acquired)

(0.6)

-

Purchase of property, plant and equipment (PPE)

(2.4)

(3.7)

Purchase of intangible assets


(1.7)

(1.4)

Proceeds from disposal of PPE


1.0

                   -

Net movement in other financial assets


1.0

0.6



________

________

Net cash utilised on investing activities

(2.7)

(4.5)



________

________

Cash flows from financing activities




Movement in long-term borrowings


(0.1)

(1.4)

Movement in short-term borrowings


(44.5)

7.6

Capital element of finance lease payments


(0.2)

(0.2)

Finance expense paid


(3.6)

(3.8)



________

________

Net cash (outflow)/inflow from financing activities


(48.4)

2.2



________

________

Net increase/(decrease) in cash and equivalents


6.4

(1.0)

Opening cash and cash equivalents


6.5

8.6

Foreign exchange gains/(losses) on cash and cash equivalents

1.0

(1.1)



________

________

Closing cash and cash equivalents


13.9

6.5



________

________



31 December 2010

31 December 2009

Cash and short term deposits


13.9

9.2

Bank overdrafts

-

(2.7)



________

________

Cash and cash equivalents


13.9

6.5



________

________

 

Consolidated statement of changes in equity

For the fifty two weeks ended 31 December 2010


Unaudited


Total

share capital and share premium

Other reserves

Retained deficit

Non-controlling interest

Total equity


£m

£m

£m

£m

£m

1 January 2010

15.9

92.7

(23.4)

0.2

85.4


______

______

______

______

______

Other comprehensive income

-

0.3

-

              -

0.3

Profit for the period

-

-

21.1

              -

21.1


______

______

______

______

______

 












31 December 2010

15.9

93.0

(2.3)

0.2

106.8


______

______

______

______

______

 

Notes to the financial statements

1          Basis of preparation

I.            Statement of compliance

The financial statements presented in this financial report have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union that will be applicable to the consolidated financial statements for the year ended 31 December 2010.

II.           Financial information

The financial information, which is unaudited, for the fifty two weeks to 31 December 2010 does not constitute the statutory accounts of the Group for the relevant period within the meaning of section 434 of the Companies Act 2006. Such statutory accounts will be completed in due course and delivered to the Registrar of Companies.

III.          Accounting policies, new IFRS and interpretations

The accounting policies used in this report are consistent with those applied at December 2009 with the exception of the following new or revised IFRS publications that have been adopted in the period:

International Accounting Standards (IAS / IFRS)

Effective date

IFRS 3 - Business combinations

1 July 2009



 

No other new and/or revised IFRS and IFRIC publications that came into force in the period have any impact on the Group.



 

2          Segmental information

As part of the on-going review and rationalisation of the Group, certain business activities have been reclassified within the reporting segments.  Prior period comparatives have been restated accordingly.

 

Fifty two weeks ended 31 December 2010 - Unaudited

Continuing operations

Healthcare Staffing

UK Staffing - Commercial

UK Staffing -Professional & Technical

US
Staffing

Support Services

Group

total

 

£m

£m

£m

£m

£m

£m

 







Segment revenue

202.4

472.9

168.1

164.9

105.3

1,113.6


_______

_______

_______

_______

_______

_______

 







Segment EBIT

11.6

14.9

4.3

4.0

2.4

37.2


_______

_______

_______

_______

_______


Unallocated - Corporate cost






(3.9)







_______

Operating profit before amortisation of client relationships and exceptional items






33.3

Amortisation of client relationships






(2.6)

Exceptional items






-







_______

Operating profit before finance costs and taxation






30.7

Finance expense






(3.9)







_______

Profit before taxation






26.8

Taxation charge






(5.7)







_______

Profit for the period






21.1







_______

 



Twelve months ended 31 December 2009 - Audited

Continuing operations

Healthcare Staffing

UK Staffing - Commercial

UK Staffing -Professional & Technical

US
Staffing

Support Services

Group

total

 

£m

£m

£m

£m

£m

£m

 







Segment revenue

179.0

424.7

173.2

164.1

103.2

1,044.2


_______

_______

_______

_______

_______

_______

 







Segment EBIT

10.3

8.4

3.2

0.9

(1.1)

21.7


_______

_______

_______

_______

_______


Unallocated - Corporate cost






(2.5)







_______

Operating profit before amortisation of client relationships and exceptional items






19.2

Amortisation of client relationships






(3.5)

Exceptional items






(5.7)







_______

Operating profit before finance costs and taxation






10.0

Finance expense






(4.1)







_______

Profit before taxation






5.9

Taxation credit






4.9







_______

Profit for the period






10.8







_______

 

3        Taxation

 

 

 

 

Unaudited

2010

Audited

2009

 

£m

£m

Current income tax

 

 

UK corporation tax on results for the period

6.9

0.4

Adjustments in respect of previous periods

(1.4)

(0.9)

 

________

________

 

5.5

(0.5)

Foreign tax in the period

0.3

0.6

 

________

________

Total current income tax

5.8

0.1

Deferred tax credit

(0.1)

(5.0)

 

________

________

Total tax charge/(credit) in the income statement

5.7

(4.9)


________

________

4        Earnings per share

Basic earnings per share amounts are calculated by dividing the profit for the period attributable to the equity holders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated on the same basis, but after adjusting the denominator for the effects of dilutive options. The only potentially dilutive shares arise from the share options issued by the Group under its share-based compensation plans. There are 83,165 options outstanding as at the balance sheet date (2009: 158,998).

The weighted average number of shares has been calculated for the period from 1 January 2010 to 31 December 2010. The number of shares so calculated is 45,029,014 (December 2009: 44,979,041) excluding the shares owned by The Corporate Services Group Employee Share Trust.

 

5        Reconciliation of profit before tax to cash generated by operations


                   2010

                   2009


                     £m

                     £m

Profit before taxation

26.8

5.9

Adjustments for:



Finance expense

3.9

4.1

Depreciation and amortisation

8.3

8.6

Other items

0.1

0.1


__________

__________


39.1

18.7

Increase in trade and other receivables

(1.2)

(8.0)

Increase/(decrease) in trade and other payables

25.6

(8.5)

Decrease in provisions for liabilities and charges

(1.9)

(1.4)


__________

__________

Cash generated by operations

61.6

0.8

 

 

__________

__________

6        Additional cash flow information


1 January 2010

Cash flow

Foreign exchange

Other
non-cash

changes

31 December 2010


£m

£m

£m

£m

£m

Cash at bank and in hand

9.2

3.7

1.0

-

13.9

Overdrafts

(2.7)

2.7

-

-

-


__________

__________

_________

__________

__________


6.5

6.4

1.0

-

13.9


__________

__________

_________

__________

__________

Guaranteed secured loan note

(19.9)

-

-

(0.1)

(20.0)

Finance leases

(0.3)

0.2

-

-

(0.1)

Revolving credit

(55.9)

44.6

(0.3)

-

(11.6)


_________

__________

_________

__________

__________


(76.1)

44.8

(0.3)

(0.1)

(31.7)


__________

__________

_________

__________

__________


(69.6)

51.2

0.7

(0.1)

(17.8)


__________

__________

_________

__________

__________

 

 

Enquiries:  For further information please contact the appropriate individual below.

Impellam Group plc

                                 

Cheryl Jones, Chairman          

Tel: 01582 692658

Andrew Burchall, Group Finance Director

Tel: 01582 692658

 

Cenkos Securities plc

(Nominated Advisor and Broker to Impellam)

 

Nicholas Wells

Elizabeth Bowman                            

Tel: 020 7397 8900

Tel: 020 7397 8900

 

Threadneedle Communications

 

John Coles

Tel: 020 7653 9848

 

Notes:

Impellam Group plc, traded on AIM (Symbol: IPEL), conducts business primarily in the United Kingdom and the United States, with smaller operations in Australia, Ireland, New Zealand and Continental Europe.  The Group employs more than 5,600 people, including 2,400 managers and consultants and more than 3,200 support services workers, across a network of 240 branch and regional offices. The Group operates more than 20 specialty brands across a broad range of staffing sectors which are complemented by businesses in the outsourced support services sector.  Impellam Group was formed in May 2008 through the merger of The Corporate Services Group plc and Carlisle Group Limited and is ranked 15th on Staffing Industry Analysts' 2010 Top Global Staffing Companies List.

Business Segment

Staffing Sectors/Brands

Healthcare Staffing

The Group's Healthcare staffing segment comprises Medacs Healthcare (locum doctors, nursing, international recruitment and managed healthcare services) and Chrysalis Homecare (domiciliary care).

UK Staffing - Commercial

 

The Group's UK Commercial staffing segment primarily includes those brands that operate in the traditional clerical, administrative, industrial/trades and hospitality staffing markets. These principal brands include ABC Contract Services (construction and telecoms), Blue Arrow (catering, managed services, office and industrial), Carlisle Managed Solutions (managed services), Comensura (vendor neutral staffing & recruitment procurement), and Tate (office).

UK Staffing - Professional & Technical

 

The Group's UK Professional & Technical staffing segment comprises the following principal brands: Austin Benn (sales and marketing), Celsian Education (teachers and school support staff), Chadwick Nott (legal), Hewitson Walker (accounting), IRC (multi-sector staffing in Ireland), S∙COM (technical) and SRG (scientific).

US Staffing

The Group's US staffing segment operates across a wide spectrum of staffing sectors.   The principal brands and their specialties include CORESTAFF Services and Leafstone (Call centre/customer care, engineering, IT, light industrial, office/clerical, professional, skilled trade and technical), Guidant Group (managed services), InfoCurrent (information/records management and library services), S∙COM (technical and telecom) and SRG Woolf (clinical research).

Support Services

The Group's Support services segment consists of several brands providing a wide range of outsourced services to clients throughout the UK.  These brands include Carlisle Cleaning & Support Services (contract cleaning and facility support services), Carlisle Security (security guarding and CCTV public space surveillance), and the Recruit (retail merchandising and events).

-END-


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