Half Yearly Report

RNS Number : 0239W

Prime People PLC

12 November 2010

 



12 November 2010

Prime People Plc

Unaudited Consolidated Interim Results for the six months ended 30 September 2010

Prime People Plc ("Prime People" or the "Group"), the international real estate, infrastructure and customer insights recruitment specialist, today announces its interim results for the half year ended 30 September 2010.

Highlights:

·    Group net fee income ('NFI') increased by 30% to £3.95m (2009: £3.05m)

·    Permanent NFI increased by 50% to £3.22m (2009: £2.14m)

·    Profit before tax of £0.41m (2009: loss of £0.16m)

·    Interim dividend of 1.75p per share

·    Adjusted earnings per share of 2.24p (2009: loss per share of  1.10p)

·    Our Customer Insights business experiencing substantial growth

·    Start up in Environmental & Energy sector showing encouraging early signs

Peter Moore Managing Director of Prime People, commented:

"I am pleased with these results which show a very positive performance. I am particularly encouraged with the results from the UK offices. Our prospects for the second half are good and I am looking forward to implementing our plans for growing our established overseas offices as well as further developing our new revenue lines".

-Ends-

For further information please contact:

Prime People	020 7318 1785
Robert Macdonald, Executive Chairman
Chris Heayberd, Finance Director
Cenkos Securities	020 7397 8900
Elizabeth Bowman
Julian Morse

CHAIRMAN'S STATEMENT

Results

I am pleased to report that Prime People Plc has delivered a strong performance in the half-year ended 30 September 2010.

Group Net Fee Income ('NFI') for the six months ended 30 September 2010 increased by 30% to £3.95m (2009: £3.05m). Whilst the increase in NFI is substantially due to the improved macro-economic trading conditions it also reflects the results of the changes in management and organisation structure that we made to the business in 2009.  Our permanents businesses performed well with the UK increasing NFI by 73% and the international businesses increasing NFI by 23% compared to the comparable period last year. Our temporary business, which, for the most part, recruits into the Public Sector, has suffered from government cut backs and experienced a 23% decline in NFI. Our professional training business traded profitably on stable revenues.

The net fee income split is:

		Six months ended            30 September                            2010		Six months ended 30 September 2009
		£'000		£'000
Recruitment Permanent - UK - International			2,045 1,171		1,185 953
Temporary  (UK only)			3,216 593		2,138 760
Total recruitment Training			3,809 144		2,898 152
			3,953		3,050

Profit

The combination of increasing NFI and an efficient cost base resulted in a profit before taxation for the period of £407,000, which compares favourably with the loss of £162,000 recorded for the comparable period last year.

Basic earnings per share for the period are 2.41 pence against a loss per share in the comparable period in 2009 of 1.1 pence.

CHAIRMAN'S STATEMENT

Net cash

Net cash inflow of £561,000 (2009: inflow of £14,000) was generated from operating activities during the period, which after tax payments of £58,000 (2009: net tax receipt of £34,000) resulted in a net cash inflow from operating activities of £503,000 (2009: inflow of £48,000)

At the end of the period the net cash position was £2.50m (2009: £1.81m)

Dividend

Given the improved trading seen in the first half of 2010 and the strong net cash position of the business the Board intend to pay a dividend of 1.75 pence on 3 December 2010 to those shareholders whose names are on the register on 26 November 2010.

Outlook

The UK permanent recruitment business is expected to perform in the second half in line with NFI levels achieved in the first half. As indicated above we are not anticipating any meaningful growth in our temporary business in the foreseeable future.

Prime Insight, our London based insights recruitment consultancy, which serves the market research industry, is now two years old and making a valuable contribution to NFI. We see the business as having considerable potential.

Encouragingly, the start-up Environmental & Energy recruitment business, which has a dedicated staff in both London and UAE offices, is showing early promise.

The relatively long established offices in Hong Kong (since 2006) and the UAE (since 2006) and our office in Johannesburg (since 2008) provide solid platforms to access areas of substantial GDP growth and we are targeting meaningful medium term revenue uplift from these overseas operations. 

Whilst, we currently expect that the business will show further improvements in turnover and profit, we are conscious of the continuing level of uncertainty in our markets.

R J G Macdonald

Executive Chairman

12 November 2010

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2010

			Six months ended				Year ended
		30 September 2010			30 September 2009		31 March 2010
	Note		£'000		£'000		£'000
Revenue	2		7,182		7,071		14,180
Cost of sales			(3,229)		(4,021)		(7,507)
Net fee income			3,953		3,050		6,673
Administrative expenses			(3,553)		(3,212)		(6,212)
Operating profit/(loss)			400		(162)		461
Finance income			9		5		12
Finance expense	3		(2)		(5)		(11)
Profit/(loss) before taxation			407		(162)		462
Tax expense	4		(121)		31		(129)
Profit/(loss) for the period			286		(131)		333
Other comprehensive (loss)/income: Foreign currency exchange differences			(33)		(82)		(18)
Total comprehensive income/(loss) for the period			253		(213)		315
Attributable to: Equity shareholders of the parent			253		(213)		315
Earnings per share	6
Basic			2.41p		(1.10)p		2.79p
Diluted			2.24p		(1.10)p		2.71p

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2010

		Called up share capital	Capital redeem- ption reserve	Treasury  shares	Share premium account	Other reserve	Share option reserve	Foreign currency trans- lation	Retained earnings	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 April 2009		1,203	-	-	7,095	173	176	486	4,335	13,468
Total comprehensive loss for the period		-	-	-	-	-	-	(82)	(131)	(213)
Adjustment in respect of share schemes		-	-	-	-	-	(107)	-	113	6
Shares purchased for cancellation		(9)	9	-	(18)	-	-	-	-	(18)
At 30  September 2009		1,194	9	-	7,077	173	69	404	4,317	13,243
Total comprehensive income for the period		-	-	-	-	-	-	64	226	290
Shares  purchased for treasury		-	-	(9)	-	-	-	-	-	(9)
Adjustment in respect of share schemes		-	-	-	-	-	8	-	-	8
At 31 March 2010		1,194	9	(9)	7,077	173	77	468	4,543	13,532
Total comprehensive income for the period		-	-	-	-	-	-	(33)	286	253
Adjustment in respect of share schemes		-	-	-	-	-	18	-	-	18
Shares purchased for treasury		-	-	(8)	-	-	-	-	-	(8)
Dividends		-	-	-	-	-	-	-	(178)	(178)
At 30 September 2010		1,194	9	(17)	7,077	173	95	435	4,651	13,617

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2010

30 September 2010				30 September 2009		31 March 2010
			£'000		£'000		£'000
Assets
Non-current assets
Intangible assets			9,769		9,769		9,769
Property, plant and equipment			297		298		251
Deferred tax  asset			41		79		54
			10,107		10,146		10,074
Current assets
Trade and other receivables			3,000		2,863		2,795
Cash and cash equivalents			2,679		2,237		2,783
			5,679		5,100		5,578
Total assets			15,786		15,246		15,652
Liabilities
Current Liabilities
Financial liabilities - borrowings			176		289		476
Trade and other payables			1,814		1,574		1,514
Current tax liabilities			179		-		130
			2,169		1,863		2,120
Non current liabilities
Financial liabilities - borrowings			-		140		-
			-		140		-
Total liabilities			2,169		2,003		2,120
Net assets			13,617		13,243		13,532
Capital and reserves attributable to the company's equity holders
Called up share capital Capital redemption reserve		1,194 9			1,194                   9		1,194 9
Treasury shares		(17)			-		(9)
Share premium account		7,077			7,077		7,077
Other reserve		173			173		173
Share option reserve		95			69		77
Currency translation differences		435			404		468
Retained earnings		4,651			4,317		4,543
Equity shareholders funds		13,617			13,243		13,532

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOW

For the six months ended 30 September 2010

		Six months ended				Year ended
		30 September 2010		30 September 2009		31 March 2010
	Note		£'000		£'000		£'000
Cash inflow from operating activities
Cash generated by operations	7		561		14		859
Corporation tax (paid)/received			(58)		34		(27)
Net cash from operating activities			503		48		832
Cash flows from investing activities
Interest received			9		5		12
Interest paid			(2)		(5)		(11)
Net purchase of property, plant and equipment			(127)		(12)		(51)
Net cash used in investing activities			(120)		(12)		(50)
Cash flows from financing activities
Repayment of borrowings			(140)		(140)		(280)
Purchase own shares			-		(18)		(18)
Treasury shares			(9)		-		(9)
Increase in obligations under finance leases			28		-		-
Dividends paid to shareholders	5		(178)		-		(238)
Net cash used in financing activities			(299)		(158)		(545)
Net increase/(decrease) in cash and cash equivalents			84		(122)		237
Cash and cash equivalents at beginning of period/year			2,587		2,350		2,350
Cash and cash equivalents at end of period/year			2,671		2,228		2,587

NOTES TO THE INTERIM FINANCIAL STATEMENTS

For the six months ended 30 September 2010 (unaudited)

1.   Accounting Policies

The consolidated interim financial statements are for the six months ended 30 September 2010.  They have been prepared in accordance with International Financial Reporting Standards (IFRS) using the same accounting policies as those used in the preparation of the accounts for the year ended 31 March 2010.  The accounting policies have been applied consistently throughout the group for the purposes of the preparation of these interim financial statements.

2.   Interim Results

(a)  Revenue and gross profit, by geography

		Revenue						Gross Profit
		Six months ended			Year ended			Six months ended			Year ended
30 September 2010			30 September  2009		31 March 2010		30 September 2010		30 September 2009		31 March 2010
		£'000		£'000		£'000		£'000		£'000		£'000
UK		6,011		6,118		12,163		2,782		2,097		4,656
Rest of World		1,171		953		2,017		1,171		953		2,017
		7,182		7,071		14,180		3,953		3,050		6,673

(b)  Revenue and gross profit, by classification

For management purposes, the Group is organised into two business segments:

-     Recruitment into the property, customer insight and environmental & energy sectors

-     Training provided through bespoke sales, marketing and management training and coaching programmes

		Revenue						Gross Profit
		Six months ended			Year ended			Six months ended			Year ended
30 September 2010			30 September  2009		31 March 2010		30 September 2010		30 September 2009		31 March 2010
		£'000		£'000		£'000		£'000		£'000		£'000
Permanent		3,216		2,138		5,003		3,216		2,138		4,979
Temporary		3,732		4,682		8,788		593		760		1,467
Training		234		251		389		144		152		227
		7,182		7,071		14,180		3,953		3,050		6,673

NOTES TO THE INTERIM FINANCIAL STATEMENTS

For the six months ended 30 September 2010 (unaudited)

3.   Finance Expense

				Six months ended			Year ended
		30 September 2010			30 September 2009		31 March 2010
			£'000			£'000	£'000
Bank interest:			2			5		11
			2			5		11

4.   Taxation on profit on ordinary activities

The charge for taxation on profits for the interim period amounted to £0.12m (2009: credit of £0.03m) an effective rate of 30%.

5.   Dividends

				Six months ended			Year ended
		30 September 2010			30 September 2009		31 March 2010
			£'000			£'000		£'000
Final dividend for 2010 of 1.50 pence per share			178			-		-
Interim dividend for 2010 of 2.00 pence per share			-			-		238
			178			-		238

The proposed interim dividend for 2011 of 2.25 pence (2010 special interim dividend of 2.00 pence paid on 31 March 2010) was approved by the board on 12 November 2010 and will be paid on 3 December 2010 to those shareholders whose names are on the register on 26 November 2010.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

For the six months ended 30 September 2010 (unaudited)

6.   Earnings per share

Earnings per share (EPS) has been calculated in accordance with IAS 33 "Earnings per share" and is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

Earnings and weighted average number of shares used in the calculations are show below:

			Six months ended			Year ended
	30 September                 2010			30 September 2009		31 March 2010
		£'000			£'000		£'000
Profit/(loss) attributable to equity holders of the parent			286		(131)		333
		Number			Number		Number
Weighted average number of shares used for basic and continuing earnings per share			11,904,621		11,941,500		11,956,824
Dilutive effect of share options and shares to be issued			918,009		841,510		314,761
Diluted weighted average number of shares used for diluted earnings per share			12,822,630		12,783,010		12,271,585

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has only one category of dilutive potential ordinary shares: share options. For the year ending 31 March 2010 the basic and diluted loss per share is the same, as the exercise of share options would reduce the loss per share and is, therefore, anti-dilutive.

		Pence		Pence		Pence
Basic earnings/(loss) per share		2.41p		(1.10)p		2.79p
Fully diluted earnings/(loss) per share		2.24p		(1.10)p		2.71p
Adjusted basic earnings/(loss) per share		2.41p		(1.10)p		2.79p
Adjusted fully diluted earnings/(loss) per share		2.24p		(1.10)p		2.71p

NOTES TO THE INTERIM FINANCIAL STATEMENTS

For the six months ended 30 September 2010 (unaudited)

7.   Reconciliation of operating profit to net cash inflow from operating activities

		Six months ended			Year ended
	30 September 2010		30 September 2009		31 March 2010
		£'000		£'000		£'000
Group operating profit/(loss)		400		(162)		461
Depreciation		82		93		189
Share option reserve movement		18		6		14
Effects of exchange rate changes		(33)		(82)		(18)
Profit on disposal of tangible fixed asset		(2)		-		-
(Increase)/decrease in debtors		(206)		487		555
Increase/(decrease) in creditors		302		(328)		(342)
Net cash inflow from operating activities		561		14		859

8.   Reconciliation of net cash flow to movement in net funds

		Six months ended			Year ended
	30 September 2010		30 September 2009		31 March 2010
		£'000		£'000		£'000
Increase/(decrease) in cash and cash equivalents in period/year		84		(122)		237
Decrease in net debt resulting from cash flows		112		140		280
Net funds at the start of the period/year		2,307		1,790		1,790
Net funds at the end of the period/year		2,503		1,808		2,307

9.   Nature of the financial information

The interim financial information for the six months ended 30 September 2010, was approved by the board on 12 November 2010.

The financial information set out above does not constitute full accounts within the meaning of the Companies Act 2006.  The comparative results for the year ended 31 March 2010 have been extracted from the Group's financial statements for that period which have received an unqualified audit report and have been filed with the Registrar of Companies.

A copy of the interim results will be available on the company's website www.prime-people.co.uk

 

END

 

 

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