INTERIM RESULTS TO 1 JULY 2022

RNS Number : 9935T

Impellam Group plc

28 July 2022

 

Impellam Group plc

("Impellam", the "Group" or the "Company")

INTERIM RESULTS TO 1 JULY 2022

Impellam (AIM: IPEL) announces its unaudited interim results for the 26 weeks ended 1 July 2022.

H1 gross profit reaches historic highs across all regions

		H1 2022	H1 2021(1)	Actual Inc/(Dec)	Like-for-like(2) Inc/(Dec)
Revenue (£ millions)		£1,232.3	£1,042.8	18.2%	17.0%
Gross profit (£ millions)		£149.3	£116.6	28.0%	25.8%
Operating profit (before amortisation) (£ millions) (3)		£17.8	£12.0	48.3%	50.9%
Operating profit (before amortisation) conversion (%) (4)		11.9%	10.3%	1.6ppts
Operating profit (£ millions)		£13.1	£7.1	84.5%	78.7%
Continuing adjusted basic EPS (5)		23.8p	12.8p	85.9%
Continuing basic EPS		15.5p	4.3p	260.5%
Net cash/(debt) (£ millions) pre IFRS 16(6)		£18.0	£(7.1)
Net cash/(debt) (£ millions) post IFRS 16		£3.7	£(25.5)

(1) 2021 financial statements restated for discontinued operations (see note 7)

(2) % change measured at constant exchange rates

(3) Operating profit before amortisation of acquired intangible assets (see note 2)

(4) Calculated as operating profit before amortisation of acquired intangible assets / gross profit

(5) Basic EPS before amortisation of acquired intangible assets (see note 5)

(6) Net debt pre IFRS 16 is used as the basis for banking covenant calculations

Key operational highlights

§ Group revenue increase of 18.2%, (17.0%⁽²⁾), with trading at historic highs in all regions.

§ Group gross profit increase of 28.0%, (25.8%⁽²⁾), with all regions showing strong growth over the same period last year - UK and Europe up 29.9%⁽²⁾, APAC up 25.7%^{( 2)}  and North America up 15.6%⁽²⁾ .

§ Gross profit increases in all segments - Global Managed Services 14.3%⁽²⁾; STEM 40.8%⁽²⁾, Regional Specialist Staffing 25.2%⁽²⁾ and Healthcare 20.6%⁽²⁾.

§ Gross profit per fee earner up 2.2%⁽²⁾ on 2021 and up 3.8% per total full time employee ("FTE") as a result of improved gross profit margin of 12.2% (H1 2021: 11.2%) due to the mix of permanent and temporary recruitment and price improvement as well as our continued investments in people and IT.

§ Investment in our key growth markets resulted in a headcount increase of 210 (7.4%) from the end of December 2021 and up 253 (20.6%) from June 2021 to 3,057 at 1 July 2022, responding to increasing demand and to support business growth.

§ Operating profit⁽³⁾ of £17.8m (H1 2021: £12.0m⁽¹⁾) a 50.9%⁽²⁾ improvement as a result of increased gross profit and productivity.

§ Cash remains tightly controlled with Pre IFRS 16 net cash of £18.0m, a £33.0m improvement in the 6 months (December 2021: £15.0m net debt). Net cash after IFRS 16 of £3.7m (December 2021: £31.5m net debt).

§ The Core Systems replacement programme is progressing well with the start of phased rollouts across the Group, including new bill/pay systems in the UK, finance systems in APAC and Corporate Sales CRM across the regions.

§ The sale of Corestaff, our light industrial business in North America, to swipejobs Inc for a cash consideration of £16.3m ($21.9m) completed in February 2022, of which £14.1m ($19.0m) was paid in February 2022 and the balance in July 2022, generating a profit on disposal of £6.4m before the allocation of goodwill and tax.

§ The Company continues to work with Lord Ashcroft in relation to his notification referred to in the 12 April 2022 announcement made by the Company that he wanted to explore opportunities to sell his shareholding, which resulted in the commencement of an offer period under the Takeover Code.

Julia Robertson, Chief Executive Officer, commented:

"Our H1 trading reached historic highs across all our regions with strong growth in our temporary and contractor margin supplemented by record months in permanent fees across our specialisms. Despite the uncertain global economic and political landscape, the demand for talent remains a key challenge for our customers and the labour market has remained buoyant.

We continue to invest strategically in people and technology. More than 200 new colleagues joined us as we responded to the demand for our services in our key growth markets and we end H1 with a headcount of 3,057. Our core systems technology programme gained further momentum with successful go-lives in the UK and APAC with further implementations planned for H2. These new systems will provide a solid foundation for future digital enhancements allowing the Group to scale and adapt quickly as we connect our Virtuosos to our customers and candidates.

Whilst our regions are now largely free of covid restrictions we have chosen to retain a flexible approach to when, how and where our colleagues work, learning from what worked well for our people, our customers and our business over the last two years and overlaying that with both old and new ways of improving culture, engagement, diversity and collaboration.

In February we completed the sale of Corestaff, our North American light industrial business to swipejobs Inc, and with these proceeds and our strong cash generating trading performance we returned to £18m net cash positive pre-IFRS 16, a £33m improvement from the £15m net debt at the end of December 2021.

Whilst the global economic and political environment remains uncertain, we are operating in a talent short market and we see no sign of a reduction in demand for our services for the remainder of the financial year. Our Virtuoso strategy means we will stay close to our customers and we have every confidence in our proven ability to respond quickly to any change in market dynamics."

UK & Europe

The UK & Europe region traded at historical highs with growth in all segments and brands. Gross profit increased 29.9%⁽²⁾ to £101.6m (H1 2021: £78.3m). The strongest growth was in the UK STEM segment with gross profit up 49.6%⁽²⁾ with increases across all our specialisms, IT & digital, life sciences and engineering. The education, hospitality and catering markets, which were slower to recover from Covid-19 due to the lockdowns, continue to grow strongly and the UK Regional Specialist Staffing segment gross profit increased by 25.6%⁽²⁾. The Global Managed Services and Healthcare segments achieved double digit growth too, despite having more resilience to Covid-19 in prior years. The increases in gross profit supported by the ongoing control of our cost base following our transformation work in 2020 led to increased adjusted operating profit of 97.5%⁽²⁾ to £16.0m (H1 2021: £8.3m).

North America (NA)

The North America region gross profit increased by 15.6%^(1,2) to £37.4m, driven by Global Managed Services (Guidant Global) and STEM (Lorien). New business wins in Guidant Global more than offset reduced Covid related demand, however as these new accounts have yet to reach maturity the conversion to operating profit was lower and this, together with continued headcount investment in our STEM businesses led to an H1 reduction in adjusted operating profit of 50.0%⁽²⁾ to £3.1m (H1 2021: £5.6m).

Sale of Corestaff

The disposal of the trade and assets of Corestaff completed on the 7 February 2022 for a cash consideration of £14.1m ($19.0m) subject to the agreement of a final working capital position. This position was agreed in July 2022, generating an additional cash consideration of £2.2m ($2.9m) giving rise to a profit on disposal of £6.4m before the allocation of goodwill and tax.

Asia Pacific (APAC)

The APAC region has performed strongly in 2022 with gross profit increasing by 25.7%⁽²⁾ to £10.3m as state  and international borders re-opened. Global Managed Services (Comensura and Guidant) had strong gross profit growth of 20.8%⁽²⁾ and our Healthcare business grew gross profit by 22.3%⁽²⁾ as doctors were able to travel across states for locum work. As a consequence of gross profit growth, adjusted operating profit doubled to £0.6m (H1 2021: £0.3m).

Cash flow, net debt and net assets

The Group generated £26.2m (H1 2021: £10.8m) of net cash from operations over the first half of the year including the final deferred VAT repayment of £3.3m. Days Sales Outstanding, being total trade receivables divided by average daily invoiced sales, remained stable at 35.5 days, up just 0.1 days from 35.4 days at the end of FY2021. As a result of these positive cash inflows and the £14.1m cash received from the sale of Corestaff net cash (pre IFRS 16) stood at £18.0m, which was a £33.0m improvement from the £15.0m net debt reported at 31 December 2021. Net cash after IFRS 16 adjustments stood at £3.7m, a £35.2m improvement from the net debt of £31.5m at 31 December 2021.

The Group has outstanding letters of credit drawn against its US borrowing facilities amounting to £3.3m (31 December 2021: £3.0m).

We continue to model scenarios to ensure the Group has sufficient liquidity over the period ahead. With our current level of net cash (pre IFRS 16) of £18.0m, our £182.5 million facility and strong relationship with our lenders we do not envisage the need for any additional financial support within the scenarios we have modelled.

Dividend and dividend policy

Approval was gained at the 2021 AGM to commence an updated programme authorising the Board to purchase up to a maximum of 4,560,363 shares, being 10% of the issued Ordinary Share capital of the company (as at 17 May 2021) until the earliest of the 2022 AGM or 30 June 2022. Under this programme a total of 330,104 shares were purchased at a value £1.4m, of which £0.8m was purchased during 2022.

An updated programme was approved at the 2022 AGM whereby a maximum of £0.5m of Ordinary Shares (by market value) can be purchased per calendar month until the 2023 AGM.

Trading outlook

Whilst we have achieved strong results in the first half of the year, we continue to monitor the ongoing global economic and political uncertainty and the potential impact it may have on our markets. To date, given the opportunities global talent shortages present, we have not experienced any significant changes in trading conditions within our segments and regions, except for the usual seasonality. We remain vigilant and given our agility and proven ability to respond rapidly to changing environments we are confident that we can meet any future external challenges and progress towards our strategic goals.

Financial results for the twenty-six weeks to 1 July 2022

The table below sets out the results for the Group by region for the first half of 2022.

Unaudited	Revenue					Gross profit			Operating profit
£'million	H1 2022		H1 2021( 1)	Like-for-like change(2)		H1 2022	H1 2021( 1)	Like-for-like change(2)	H1 2022	H1 2021( 1)	Like-for-like change(2)
UK & Europe	987.1		836.1	18.2%		101.6	78.3	29.9%	16.0	8.3	97.5%
Gross profit %						10.3%	9.4%
North America(1)	195.5		176.5	3.6%		37.4	30.1	15.6%	3.1	5.6	(50.0%)
Gross profit %						19.1%	17.1%
Asia Pacific	49.7		30.2	65.5%		10.3	8.2	25.7%	0.6	0.3	118.2%
Gross profit %						20.7%	27.2%
Total	1,232.3		1,042.8	17.0%		149.3	116.6	25.8%	19.7	14.2	37.5%
Corporate costs									(1.9)	(2.2)	(13.6%)
Operating profit(3)									17.8	12.0	50.9%
Amortisation of acquired intangible assets									(4.7)	(4.9)
Operating profit									13.1	7.1	78.7%

1.  North America and all sub-totals have been restated for the prior period to remove the Corestaff trade which was sold in the current period

2.  % change measured at constant exchange rates

3.  Before amortisation of acquired intangibles

Financial results for the twenty-six weeks to 1 July 2022

The table below sets out the results for the Group by segment for the first half of 2022.

Unaudited	Revenue			Gross profit
£'million	H1 2022	H1 2021( 1)	Like-for-like change(2)	H1 2022	H1 2021( 1)	Like-for-like change(2)
Global Managed Services	467.6	385.5	19.7%	42.7	36.1	14.3%
Gross profit %				9.1%	9.4%
STEM	482.8	387.4	22.7%	53.0	36.8	40.8%
Gross profit %				11.0%	9.5%
Regional Specialist Staffing (1)	158.6	158.8	0.0%	28.5	22.7	25.2%
Gross profit %				18.0%	14.3%
Healthcare	170.4	136.8	25.1%	25.1	21.0	20.6%
Gross profit %				14.7%	15.4%
Inter-segment revenues(3)	(47.1)	(25.7)	83.2%	-	-	-
Total	1,232.3	1,042.8	17.0%	149.3	116.6	25.8%

1.  Regional Specialist Staffing and all sub-totals have been restated for the prior period to remove the Corestaff trade which was sold in the current period

2.  % change measured at constant exchange rates

3.  Elimination of inter-segment sales which are all within the UK & Europe region

Consolidated income statement

For the twenty-six weeks ended 1 July 2022

		26 weeks 1 July 2022	Restated 26 weeks 2 July 2021
	Notes	£m	£m
		Unaudited	Unaudited
Revenue	2	1,232.3	1,042.8
Cost of sales		(1,083.0)	(926.2)
Gross profit	2	149.3	116.6
Administrative expenses		(136.2)	(109.5)
Operating profit	2	13.1	7.1
Operating profit before amortisation		17.8	12.0
Amortisation of acquired intangible assets		(4.7)	(4.9)
Operating profit		13.1	7.1
Finance income		-	0.1
Finance expense	3	(2.4)	(2.4)
Profit before taxation		10.7	4.8
Taxation	4	(3.7)	(2.9)
Profit from continuing operations		7.0	1.9
Profit on discontinued operations, net of tax	7	3.8	0.6
Profit for the period attributable to equity holders of the Parent Company		10.8	2.5

Earnings per share for equity holders of the parent Company
Basic & diluted	5	24.1p	5.6p

Consolidated statement of comprehensive income

For the twenty-six weeks ended 1 July 2022

	26 weeks 1 July 2022	Restated 26 weeks 2 July 2021
	£m	£m
	Unaudited	Unaudited
Profit for the period	10.8	2.5
Other comprehensive income:
Foreign currency translation differences - foreign operations	11.5	(2.3)
Total comprehensive income for the period, net of tax, attributable to owners of the parent Company	22.3	0.2

Consolidated balance sheet

As at 1 July 2022

		1 July 2022	31 December 2021
		£m	£m
	Notes	Unaudited	Audited
Non-current assets
Property, plant and equipment		4.8	4.2
Right-of-use assets		13.5	15.9
Goodwill		136.7	128.9
Other intangible assets		83.8	85.3
Financial assets		1.1	1.7
Deferred tax assets		11.8	8.3
Trade and other receivables		1.1	0.9
		252.8	245.2
Current assets
Trade and other receivables		727.4	605.5
Deferred consideration receivable	7	2.2	-
Tax receivable		-	0.9
Cash and cash equivalents	6	126.7	90.9
		856.3	697.3
Total assets		1,109.1	942.5
Current liabilities
Short-term borrowings	6	50.4	0.1
Lease liabilities	6	4.6	5.1
Trade and other payables		710.9	568.7
Tax payable		2.7	0.7
Provisions		8.1	8.3
		776.7	582.9
Net current assets		79.6	114.4
Non-current liabilities
Long-term borrowings	6	53.4	101.9
Lease liabilities	6	9.7	11.4
Provisions		2.9	3.8
Deferred tax liabilities		21.1	18.7
		87.1	135.8
Total liabilities		863.8	718.7
Net assets		245.3	223.8
Equity
Issued share capital		0.5	0.5
Share premium account		30.1	30.1
		30.6	30.6
Other reserves		128.4	116.9
Retained earnings		86.2	76.2
Total equity attributable to owners of the parent Company		245.2	223.7
Non-controlling interest		0.1	0.1
Total equity		245.3	223.8

Consolidated statement of changes in equity

For the twenty-six weeks ended 1 July 2022

	Total share capital and share premium	Other reserves	Retained earnings	Total equity attributable to equity owners of the parent	Non-controlling interest	Total equity
Unaudited	£ m	£ m	£ m	£ m	£ m	£ m
1 January 2022	30.6	116.9	76.2	223.7	0.1	223.8
Profit for the period	-	-	10.8	10.8	-	10.8
Other comprehensive income	-	11.5	-	11.5	-	11.5
Total comprehensive income in the period	-	11.5	10.8	22.3	-	22.3
Transactions with owners, recorded directly in equity
Purchase and cancellation of own shares	-	-	(0.8)	(0.8)	-	(0.8)
1 July 2022	30.6	128.4	86.2	245.2	0.1	245.3

Consolidated cash flow statement

For the twenty-six weeks ended 1 July 2022

	26 weeks 1 July 2022	Restated 26 weeks 2 July 2021
	£m	£m
	Unaudited	Unaudited
Cash flows from operating activities
Profit before taxation	10.7	4.8
Adjustments for:
Depreciation and amortisation	11.3	12.2
Net interest charge	2.4	2.3
	24.4	19.3
Increase in trade and other receivables	(91.8)	(39.4)
Increase in trade and other payables	98.4	32.1
Decrease in provisions	(0.6)	(1.0)
Cash generated by operations	30.4	11.0
Taxation paid	(4.2)	(0.2)
Net cash generated by operating activities	26.2	10.8
Cash flows from investing activities
Purchase of property, plant and equipment	(2.0)	(0.9)
Purchase of intangible assets	(4.3)	(1.9)
Net cash flow on discontinued operations	13.3	(1.5)
Receipt from lease debtors	-	1.4
Increase in other financial assets	0.7	-
Finance interest received	-	0.1
Net cash utilised on investing activities	7.7	(2.8)
Cash flows from financing activities
Drawdown of short-term borrowings	98.7	85.0
Repayment of short-term borrowings	(96.8)	(111.8)
Increase/(decrease) in overdraft	1.0	(0.1)
Purchase and cancellation of own shares	(0.8)	(1.3)
Finance expense paid	(2.2)	(2.4)
Repayment of lease liabilities	(2.9)	(5.7)
Net cash (outflow) from financing activities	(3.0)	(36.3)
Net increase  / (decrease) in cash and equivalents	30.9	(28.3)
Opening cash and cash equivalents	90.9	117.9
Foreign exchange gain / (loss) on cash and cash equivalents	4.9	(1.7)
Closing cash and cash equivalents	126.7	87.9

Notes to the interim financial statements

1  Basis of preparation

I.  Statement of compliance

The interim financial statements presented in this financial report have been prepared in accordance with International Financial Reporting Standards (IFRS) and the IFRS Interpretations Committee (IFRIC) interpretations that are expected to be applicable to the consolidated financial statements for the period ending 30 December 2022. As permitted, this interim report has been prepared in accordance with the AIM Rules for Companies and does not seek to comply with IAS 34 "Interim Financial Reporting".

II.  Statutory information

The financial information for the 26 weeks to 1 July 2022 does not constitute the statutory accounts of the Group for the relevant period within the meaning of section 434 of the Companies Act 2006.

The published annual report and accounts of Impellam Group plc for the period ended 31 December 2021 were reported on by the auditors without qualification. The published annual report and accounts did not contain any statement under section 498 of the Companies Act 2006 and have been delivered to the Registrar of Companies.

The interim financial statements have been prepared on a going concern basis. In coming to their conclusion the Directors have considered the Group's profit and cash flow plans for the coming period, together with outline projections for 2023 and 2024. The Group had a net cash position of £18.0m (excluding IFRS 16 lease liabilities) and has a further £70.5m available to drawdown on the Group's revolving credit facility. The amount of borrowing required to fund the Group's activities is determined based on these projections, together with expected returns to shareholders and planned capital expenditure. Also considered is the projection of compliance with the financial covenants implied by these plans. In addition, these figures are tested for sensitivity to possible changes to the economic environments in which the Group operates. The Group has no operations in Ukraine or surrounding regions and therefore there is no direct impact on the Group's trading, however, any indirect impact such as a worsening in economic conditions, would represent such a sensitivity. The Directors continue to monitor the economic conditions for any signs of a possible downturn that may adversely impact trading. From the recent experience gained from managing adverse trading conditions, the Directors are confident that if there were an economic downturn the Company would be able to take appropriate mitigating actions to continue to trade for the foreseeable future. The impact on Group liquidity and covenants of each of these sensitivities is then considered together with the likelihood of each of these occurring either individually or in combination. Given this analysis, the Directors have determined that there are no likely downside scenarios which would cause the Group a concern.

III.  Accounting policies

The accounting policies used in this report are with those applied at 31 December 2021.

No other new and/or revised IFRS and IFRIC publications that come into force in the period have any material impact on the accounting policies, financial position or performance of the Group.

2  Segmental information

In line with internal reporting the primary segment is presented by region. In addition, as a secondary segment we presented our business segments of Global Managed Services, STEM, Regional Specialist Services and Healthcare within this report.

Twenty-six weeks ended 1 July 2022 - unaudited

			Revenue	Gross profit	Adjusted operating profit
			£ m	£ m	£ m
	UK & Europe		987.1	101.6	16.0
	North America		195.5	37.4	3.1
	Asia Pacific		49.7	10.3	0.6
	Operating regions		1,232.3	149.3	19.7

Twenty-six weeks ended 2 July 2021 - unaudited

	Restated		Revenue	Gross profit	Adjusted operating profit
			£ m	£ m	£ m
	UK & Europe		836.1	78.3	8.3
	North America		176.5	30.1	5.6
	Asia Pacific		30.2	8.2	0.3
	Operating segments		1,042.8	116.6	14.2

	Unaudited		26 weeks 1 July 2022   m	Restated 26 weeks 2 July 2021   m
	Segment adjusted operating profit		19.7	14.2
	Corporate costs		(1.9)	(2.2)
	Operating profit before amortisation		17.8	12.0
	Amortisation of acquired intangibles		(4.7)	(4.9)
	Operating profit		13.1	7.1
	Finance income		-	0.1
	Finance expense		(2.4)	(2.4)
	Taxation charge		(3.7)	(2.9)
	Profit for the period from continuing activities		7.0	1.9

The prior period results have been restated to remove the trade from discontinued operations.

The above table reconciles the adjusted operating profit to the standard profit measure under International Financial Reporting Standards (Operating Profit). This is the Alternative Profit Measure used when discussing the performance of the Group. The Directors believe that adjusted operating profit is the most appropriate approach for ascertaining the underlying trading performance and trends as it reflects the measures used internally by senior management for all discussions of performance, including Directors' remuneration. All discussions within the Group on segmental and individual brand performance refer to adjusted operating profit. Corporate costs represent costs associated with being a listed company with a wide portfolio of brands and therefore are not allocated to the segments.

Adjusted operating profit is not defined by IFRS and therefore may not be directly comparable with other companies' alternative profit measures. It is not intended to be a substitute, or superior to, IFRS measurements of profit.

3  Finance expense - unaudited

	Finance expense		26 weeks 1 July 2022 £m	26 weeks  2 July 2021 £m
	Revolving credit facilities		2.0	1.9
	Interest on lease liabilities		0.2	0.5
	Other interest expense		0.2	-
	Income statement		2.4	2.4

4  Taxation - unaudited

Income tax expense is recognised based on management's best estimate of the effective annual income tax rate expected for the full financial year which has been estimated as 34.4% (2021: 56.7%).  The decrease in the effective tax rate is largely driven by the prior year recognition of deferred tax liabilities following the increase in the enacted UK corporation tax rate from 19% to 25% from April 2023. The Group also carried out a  rationalisation of a part of its structure leading to a reduced exposure under Corporate Interest Restriction and Controlled Foreign Companies rules.

5  Earnings per share - unaudited

Basic earnings per share amounts are calculated by dividing the profit or loss for the period attributable to the owners 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 were no options outstanding at either 1 July 2022 or 2 July 2021.

The Corporate Services Group Ltd Employee Share Trust, which was set up to provide share ownership benefits for certain members of the Group, owned 19,841 shares as at 2 July 2021 and 31 December 2021. By 1 July 2022 these shares had been sold. Excluding these, the weighted average number of shares in 2022 is 45,195,505 (2021: 45,705,906).

	26 weeks 1 July 2022	Restated 26 weeks 2 July 2021
	£m	£m
Continuing profit for the period	7.0	1.9
Discontinued profit for the period	3.8	0.6
Total profit for the period	10.8	2.5
Acquired intangibles amortisation (net of tax)	3.7	3.9
Total adjusted profit	14.5	6.4
Continuing adjusted profit	10.7	5.8
Discontinued adjusted profit	3.8	0.6

Weighted average number of shares

45,195,505

45,705,906

	26 weeks 1 July 2022	Restated 26 weeks 2 July 2021
Basic and diluted EPS	Pence	Pence
Continuing earnings per share	15.5	4.3
Discontinued earnings per share	8.6	1.3
Total earnings per share	24.1	5.6
Acquired intangible asset amortisation (net of tax)	8.3	8.5
Total adjusted earnings per share	32.4	14.1
Continuing adjusted earnings per share	23.8	12.8
Discontinued adjusted earnings per share	8.6	1.3

6  Additional cash flow information - unaudited

Unaudited	1 January 2022	Cash flow	Interest charged	Interest paid	Drawdown	Foreign exchange	1 July 2022
	£ m	£ m	£ m	£ m	£ m	£ m	£ m
Cash and short-term deposits	90.9	31.4	(0.2)	0.2	-	4.4	126.7
Bank overdraft	(3.9)	(1.0)	-	-	-	-	(4.9)
Revolving credit	(101.9)	(2.0)	(2.0)	2.0	-	0.1	(103.8)
Hire purchase	(0.1)	0.1	-	-	-	-	-
Lease liabilities	(16.5)	2.8	(0.2)	-	0.1	(0.5)	(14.3)
Net cash/(debt)	(31.5)	31.3	(2.4)	2.2	0.1	4.0	3.7

The bank overdraft is included in trade and other payables on the balance sheet.

7  Discontinued operations

On 24 January 2022 the Group announced the sale of the business and assets of Corestaff, the US-based Light Industrial brand, to swipejobs Inc., a US private digital staffing company, for cash consideration of approximately $19 million (£14.1 million) (the "Disposal"). This consideration was based on an agreed net working capital of $10 million on the date of disposal with a $ for $ adjustment to consideration if the net working capital was above or below this amount. The final working capital position was to be determined between 90 and 120 days post completion date and, on 29 June 2022, a final position of $12.9 million was agreed. As a result, an additional $2.9 million (£2.2 million ) of consideration is shown as deferred consideration on the balance sheet and was received in July 2022 giving a total of $21.9 million (£16.3 million).

Corestaff is not a separate legal entity, but is included within the trade of two US registered legal entities (Corporate Employment Resources Inc and Corestaff Support Services Inc). Assets, liabilities and trade relating to Corestaff are identified by way of specific cost centre combinations that are identified as relating to Corestaff.

Profit from disposal of Corestaff

			£m
Cash consideration received			14.1
Deferred consideration due			2.2
Cash disposed of			-
Expenses relating to disposal			(0.3)
Net cash inflow on disposal of discontinued operation			16.0
Net assets disposed (other than cash):
Right of use asset			(0.2)
Trade and other receivables			(10.7)
Trade and other payables			0.8
Lease liabilities			0.2
Provisions			0.3
			(9.6)
Gain on disposal of discontinued operation before allocated goodwill and tax			6.4
Allocated goodwill			(1.0)
Pre-tax gain on disposal of discontinued operation			5.4
Related tax expense			(1.6)
Gain on disposal of discontinued operation			3.8

Profit and loss relating to discontinued operations

			26 weeks 1 July 2022	26 weeks 2 July 2021
			£m	m
Turnover			9.8	46.9
Cost of Sale			(8.7)	(40.9)
Gross Profit			1.1	6.0
Admin expenses			(1.1)	(5.1)
Operating profit			-	0.9
Interest			-	-
Profit before tax			-	0.9
Taxation			-	(0.3)
Profit from discontinued operations			-	0.6
Post tax gain on disposal			3.8	-
Total profit from discontinued operations			3.8	0.6

Cash flows relating to discontinued operations

		26 weeks 1 July 2022	26 weeks 2 July 2021
		£m	m
		Unaudited	Unaudited
Net cash generated by operating activities		(0.5)	(1.5)
Net cash generated on investing activities		13.8	-
Net cash outflow from financing activities		-	0.1
Net cash flows for discontinued operations		13.3	(1.4)

Effect of disposal on the financial position of the Group

			At disposal
			£m
Allocated goodwill			1.0
Right-of-use			0.2
Trade and other receivables			10.7
Trade and other payables			(0.8)
Lease liabilities			(0.2)
Provisions			(0.3)
Net assets and liabilities			10.6

Enquiries:  For further information please contact:

Impellam Group plc
Julia Robertson, Group Chief Executive Tim Briant, Group Chief Financial Officer	Tel: [phone]
Canaccord Genuity Limited ( NOMAD and Corporate Broker to Impellam )
Andrew Potts Bobbie Hilliam Georgina McCooke	Tel: [phone]

Prior to publication the information communicated in this announcement was deemed by the Company to constitute inside information for the purposes of article 7 of the Market Abuse Regulations (EU) No 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations No 2019/310 ('MAR'). With the publication of this announcement, this information is now considered to be in the public domain.

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Impellam's website at https://investors.impellam.com/ by no later than 12 noon (London time) on the business day following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Note to Editors:

Our Managed Services businesses are enabled by talent-focused Specialist Staffing brands with deep heritages, vertical sector expertise and loyal candidate networks. Clients across the world trust us to deliver Managed Services and Specialist Staffing in the UK, North America, Asia Pacific and Europe.

Working with them are 3,000 Impellam people, bringing a wealth of expertise through our 12 market-leading brands across 70 locations. Every year, we connect carefully chosen candidates with good work at all levels. They include technology and digital specialists, scientists, clinical experts, engineers, nurses, doctors, lawyers, teachers, receptionists, drivers, chefs, administrators, warehouse and call centre operatives.

Underpinning everything we do is our Virtuoso strategy which recognises it is our people who make the difference. Virtuosos make and deliver on promises, and grow with their customers through sector, service or international expansion which ensures there is never a need for a customer or candidate to leave Impellam. Impellam is the largest Global Talent Acquisition and Managed Workforce Solutions provider in the UK, and 8th¹ in the world.

For more information about Impellam Group please visit: www.impellam.com

1  By SUM (confirmed by Staffing Industry Analysts). Spend Under Management (SUM) is the total amount of client expenditure which our Managed Services brands manage on behalf of their clients. This equates to revenue earned where Impellam acts as principal plus gross billings to customers where Impellam acts as agent (2020 published numbers). Management use this measure as it reflects the total value of the client spend to the Group and not just the revenue generated

-END-

 

END

 

 

IR PPUQPMUPPGMM