Interim Results
Prime People PLC
03 September 2002
Prime People Plc
Interim results for the six months ended 30 June 2002
(Operations: principally specialist recruitment of senior managers for the
leisure industry, together with related training and interior design businesses)
KEY POINTS
• Recruitment sector is still experiencing challenging trading conditions
• The Board is encouraged by business performance from wholly owned
subsidiaries in a very difficult market
• Operating profit has been maintained at £173,093 (2001: £172,946)
• Operating profit up 15% for principal subsidiary Portfolio
International with new markets successfully targeted in the UK
• PBT of £75,904 (2001: £240,792) - reduced profit figure reflects
exposure to the financial recruitment sector via 44% investment in
Cameron Kennedy
• The Group continues to generate cash and retains a strong balance
sheet
• Net cash funds as at 30 June 2002 £1 Million (2001: £0.6 million)
• Acquisitions and strategic investments are being considered to develop the
group further
• Post restructuring in 2001, the Group is streamlined and business
efficient
• Prime People is strategically positioned to take rapid advantage of sector
recovery
David Coubrough, Chief Executive of Prime People commented:-
'Despite very difficult market conditions, Prime People continues to be
profitable and to generate cash. We have ended the period with a strong balance
sheet at just over £1 million cash and we will actively consider acquisitions
and strategic investment opportunities to add value to our business. We do not
expect any significant change for the full year but with a continued focus on
cost control supported by the commitment, loyalty and expertise of the senior
management at Portfolio International and across all our businesses, we are
confident that we are well placed to benefit when market conditions improve. I
look forward to updating shareholders in due course'
Press enquiries:-
Press enquiries
David Coubrough, Chief executive, Prime People Plc 020 7520 5000
Shane Dolan, Biddicks 020 7448 1000
Chairman's and Chief Executive's Statements
Chairman's statement
The first six months of the year has produced a contrasting set of results for
the group. Although our core business has maintained its operating profitability
at £173,093 (2001: £172,946) overall our results have suffered due to the
Group's exposure, via a 44% stake in Cameron Kennedy, to difficult trading
conditions in the financial recruitment sector. Due to the losses incurred by
Cameron Kennedy, we are reporting reduced profit on ordinary activities of
£75,904 (2001: £240,792). Cameron Kennedy retains a strong balance sheet and as
an associate company has not impacted on the group's cash position.
Portfolio International, our principal subsidiary, specialising in management
recruitment in the hotel, catering and leisure industry, has performed strongly
in a difficult market and we are pleased to report that operating profit for
this business for the six month period has increased by 15%.
The Group continues to generate cash, closing the period with net funds, which
slightly exceed £1m (2001: £0.6m). It is not, however, the intention to pay an
interim dividend although we will review the dividend position again at the end
of the year.
With current uncertainties, particularly within the financial marketplace, we do
not expect any significant change in trading for the full year but remain
confident that we are well placed to take rapid advantage when market conditions
improve.
Chief Executive's Review
Turnover for Portfolio International has marginally decreased (7%) in the
period, but given the cost cutting exercise that we undertook in 2001, when
consultant headcount was reduced by 28%, operating profits for the period have
increased significantly which has given the group their considerably enhanced
cash position. 2002 has seen growth in some areas of the leisure market,
although the international hotel sector is still badly affected by the reduced
numbers of American tourists travelling. Consequently, Portfolio has
concentrated on widening its sphere of activities in the UK markets and this has
been reflected in the improved results.
As anticipated, Portfolio Design, our interior design business, has made a small
loss in the period. The capital expenditure market remains very difficult and
the encouraging signs that were evident at the beginning of the year have yet to
materialise. This business has been restructured with costs controlled and
closely monitored. There is an experienced management team in place and when
market dynamics change, Portfolio Design should quickly benefit from the upturn.
The training sector remains challenging and our training business Harper Craven,
reports a 35% fall in sales for the period. Once again, costs remain tightly
controlled and as a consequence, operating profit has remained at similar levels
to last year.
As far as the remainder of this year is concerned we will continue to focus
attention on controlling our cost base and operating all our businesses
prudently. Prime People is well positioned to take advantage of an upturn in our
sector and we look forward to a return of confidence in the market place.
RICHARD E M LEE DAVID C COUBROUGH
Chairman Chief Executive
3rd September 2002
Consolidated Profit and Loss Account
for the six months ended 30 June 2002
Six months Six months Year
Ended Ended Ended
30 June 30 June 31 December
2002 2001 2001
Notes Unaudited Unaudited Audited
£ £ £
Turnover 2,176,323 2,606,789 4,553,497
Cost of sales (85,122) (118,134) (245,235)
Gross Profit 2,091,201 2,488,655 4,308,262
Administrative expenses (1,918,108) (2,315,709) (4,364,456)
Group operating profit/(loss) 173,093 172,946 (56,194)
Share of operating profit in associate (83,914) 63,143 205,060
Loss resulting from share dilution by the
exercise of share options in associate company (20,250) - -
Amortisation of goodwill (6,000) (6,000) (12,000)
Total operating profit 62,929 230,089 136,866
Interest receivable and similar income 13,511 12,029 25,533
Interest payable and similar charges (536) (1,326) (3,499)
Profit on ordinary activities before 75,904 240,792 158,900
taxation
Tax on profit on ordinary activities 2 (26,839) (66,443) (71,503)
Profit on ordinary activities after taxation 49,065 174,349 87,397
Dividends 3 - - -
Retained profit for the period transferred
to reserves 5 49,065 174,349 87,397
Earnings per ordinary share
- Basic 0.13p 0.48p 0.24p
- Diluted 4 0.13p 0.48p 0.24p
Consolidated Balance Sheet
for the six months ended 30 June 2002
30 June 30 June 31 December
2002 2001 2001
Notes Unaudited Unaudited Audited
£ £ £
Fixed assets
Tangible assets 200,670 390,549 283,345
Investment in associate 615,377 607,992 699,378
816,047 998,541 982,723
Current assets
Debtors 1,381,653 1,806,438 1,195,853
Cash at bank and in hand 1,077,259 781,215 857,357
2,458,912 2,587,653 2,053,210
Creditors: Amounts falling due within one
year (980,620) (1,248,040) (790,659)
Net current assets 1,478,292 1,339,613 1,262,551
Total assets less current liabilities 2,294,339 2,338,154 2,245,274
Creditors: Amounts falling due after one year - (5,928) -
Net assets 2,294,339 2,332,226 2,245,274
Capital and reserves
Called up share capital 363,467 363,467 363,467
Share premium account 5 864,925 864,925 864,925
Merger reserve 5 173,077 173,077 173,077
Profit and loss account 5 892,870 930,757 843,805
Shareholders' funds 6 2,294,339 2,332,226 2,245,274
Consolidated Cash Flow Statement
for the six months ended 30 June 2002
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
Unaudited Unaudited Audited
£ £ £
Net cash inflow from operating activities 7 406,541 178,305 383,022
Dividend from associate - 158,100 158,100
Return on investments and servicing of
finance
Interest received 13,511 12,029 25,533
Interest element of finance lease rental
payments (536) (1,326) (3,499)
12,975 10,703 22,034
Taxation - - (200,201)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (20,176) (212,460) (203,778)
Sale of tangible fixed assets 23,011 33,086 34,212
2,835 (179,374) (169,566)
Dividends paid - - -
Net cash inflow before management of liquid
resources and financing 422,351 167,734 193,389
Management of liquid resources
Purchase of treasury deposits (510,000) (125,000) (100,000)
Financing
Capital element of finance lease payments (9,620) (6,763) (12,565)
(Decrease)/Increase in cash 8 (97,269) 35,971 80,824
Notes To The Interim Financial Statements
for the six months ended 30 June 2002
1. Accounting Policies
The interim results have been prepared on the same basis and using the same accounting policies as those used in
the preparation of the accounts for the year ended 31 December 2001.
2. Taxation
Taxation has been provided for at 35.4% (2000: 27.6%).
3. Dividends
The directors recommend that no interim dividend be paid.
4. Earnings per share
The earnings per share is calculated based on a weighted average number of shares of 36,346,692 (2001: 36,346,692)
and the profit of £49,065 (2001 - £174,349) giving earnings per share of 0.13p (2001 - 0.48p).
Diluted earnings per share is based on the above earnings and adjusts the basic weighted average number of shares
to 36,673,560 (2001: 36,701,764) as a result of dilutive share options, giving earnings per share of 0.13p
(2001 - 0.48p).
The weighted average number of shares in issue calculated under the different methods reconcile as follows:-
30th June 30th June 31st December
2002 2001 2001
Unaudited Unaudited Audited
£ £ £
Basic 36,346,692 36,346,692 36,346,692
Number of shares under option 1,043,298 996,055 500,000
Number of shares which would have been issued
at fair value (716,430) (640,983) (194,805)
36,673,560 36,701,764 36,651,887
5. Reserves
Share Premium Account Merger Profit and Loss Account
Reserve
£ £ £
At 1 January 2002 864,925 173,077 843,805
Transfer from Profit and Loss Account - - 49,065
At 30 June 2002 864,925 173,077 892,870
6. Reconciliation of movement in shareholders' funds
30 June 30 June 31 December 2001
2002 2001 Audited
Unaudited Unaudited
£ £ £
Profit for the period 49,065 174,349 87,397
Dividend - - -
49,065 174,349 87,397
Opening shareholders' funds 2,245,274 2,157,877 756,408
Closing shareholders' funds 2,294,339 2,332,226 843,805
7. Reconciliation of operating profit to net cash inflow from operating activities
Year ended
Six months ended Six months ended 31 December
30 June 2002 30 June 2001 2001
Unaudited Unaudited Audited
£ £ £
Operating profit/(loss) 173,093 172,946 (56,194)
Depreciation 80,653 82,895 179,652
Profit on disposal of tangible fixed assets (813) (2,402) (1,763)
Increase in debtors (185,800) (245,821) 364,764
Increase in creditors 339,408 170,687 (103,437)
Net cash inflow from operating activities 406,541 178,305 383,022
8. Reconciliation of net cash inflow / (outflow) to movement in net funds
Year ended
Six months ended Six months ended 31 December 2001
30 June 2002 30 June 2001 Audited
Unaudited Unaudited
£ £ £
(Decrease)/Increase in cash in the period (97,269) 35,971 80,824
Cash outflow from decrease in debt and lease
financing 9,620 6,763 12,565
Cash outflow from increase in liquid resources 510,000 125,000 100,000
Increase in net funds resulting from cash flows 422,351 167,734 193,389
Opening net funds 633,104 439,715 439,715
Closing net funds 1,055,455 607,449 633,104
9. Analysis of net funds
At 1 January At 30 June
2002 Cash flow 2002
£ £ £
Cash at bank and in hand 357,357 (290,098) 67,259
Bank Overdraft (210,425) 192,829 (17,596)
146,932 (97,269) 49,663
Liquid resources 500,000 510,000 1,010,000
Finance leases (13,828) 9,620 (4,208)
TOTAL 633,104 422,351 1,055,455
10. Nature of the financial information
The interim financial information for the six months ended 30 June 2002, was approved by the board on 3rd
September 2002.
The financial information set out above does not constitute full accounts within the meaning of Section 254 of
the Companies Act 1985. The results for the year to 31 December 2001 are extracts from the published accounts for
that year which have received an unqualified audit report and have been filed with the Registrar of Companies.
Copies of the interim results are being sent to shareholders. Further copies can be obtained from the company's
registered office at: 5 Bream's Buildings, Chancery Lane, London EC4A 1DY.
This information is provided by RNS
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