Interim Results

RNS Number : 6334I

Prime People PLC

21 November 2008

 



21 November 2008 

Prime People Plc

Interim Results for the six months ended 30 September 2008

Prime People Plc ('Prime People' or the 'Group'), the international real estate, infrastructure and commercial property recruitment specialist, today announces its interim results for the half year ended 30 September 2008.

Highlights:

	Six months ended 30 September 2008	Six months ended 30 September 2007	Growth %
Gross fee income	£12.09m	£11.97m	+ 1.0%
Net fee income	£6.68m	£7.11m	- 6.0%
Pre-tax profit	£0.99m	£1.02m	- 2.9%
Fully diluted earnings per share	5.36p	5.63p	- 4.8%

Peter Moore Managing Director of Prime People, commented: 

'The influence of our international offices has enabled us to deliver a solid performance for the first half of the year. The prevailing economic climate shows little sign of improving and we will continue to take the timely action necessary to ensure that the business is best placed to deal with conditions as they evolve. We are, however, particularly focussed on being in position to properly exploit opportunities as they arise.'

-Ends-

For further information please contact:

Prime People	020 7493 5689
Robert Macdonald, Executive Chairman
Chris Heayberd, Finance Director
Hogarth Partnership	020 7357 9477
James Longfield
Anthony Arthur
Arbuthnot Securities	020 7012 2000
Richard Tulloch

Prime People plc
Interim Results for the six months ended 30 September 2008

Chairman's Statement

Introduction

I am able to report the results set out below for Prime People Plc for the half-year ended 30 September 2008.

Our principal business activity is the provision of recruitment services to the UK and international real estate, infrastructure and commercial property sectors. This activity is operated through our main trading subsidiary, Macdonald & Company. 

As has been widely reported and as was referred to in our Close Period Trading Update, global market conditions for our activity have become more difficult. Reflecting the challenging operating conditions that emerged during the latter part of H1, gross fee income increased marginally as a result of an increase in temporary placements by 1 per cent to £12.09 million (2007: £11.97 million). This translated to net fee income ('NFI') for the half year of £6.7 million, a 6 per cent decrease on the previous year (2007: £7.1 million). Pre tax profit for the half year was £0.99 million, which is a 2.9 per cent decrease on the pre tax profit for the previous half year of £1.02 million. Fully diluted earnings per share for the period was 5.36p (2007: 5.63p).

In the UK demand for property professionals for the majority of the period being reported has been falling. As is to be expected, given present economic conditions, current instructions to recruit continue to fall in revenue areas based on transactional activity and the construction and building sectors. 

The Group's overseas offices continued to grow in the first half and as anticipated they had a substantial impact on our half year outcome. In the period being reported, the overseas offices contributed 33 per cent of Group NFI (2007: 21 per cent) and we continue to expect NFI derived from these offices to increase as a proportion of total NFI in the second half and the years ahead. However, economic activity is falling in all geographies we serve and will impact on the results for the second half of the year.

Dividend

During the first half, the Company's focus on cash management resulted in a significant increase in the Group's cash position. As at 30 September 2008, the Group had net cash of £1.07 million, compared to net debt of £0.16 million as at 31 March 2008. In our Close Period Trading Update we stated that the Board planned to maintain an interim dividend of 1.35p. However the Board, having taken account of the prevailing economic conditions, have decided that it is both prudent and appropriate not to declare an interim dividend for the six months ended 30 September 2008. 

Results summary

The net fee income split is:

	Six months ended 30 September 2008		Six months ended 30 September 2007		NFI growth
		£’000		£’000
Permanent
- UK		3,106		4,358		-28.7%
- International		2,207		1,519		45.3%
		5,313		5,877		-9.6%
Temporary (UK only)		1,137		1,063		7.0%
Other		230		172		33.7%
Total		6,680		7,112		-6.1%

Outlook

Significant action has been taken to address the cost base of the business and the benefits of this are already being seen. We expect world economic conditions will continue to impact activity levels in the second half of the year. However, we will take such further actions as are necessary to ensure the business is positioned to operate efficiently in the conditions that prevail, whilst maintaining the capacity to exploit opportunities and improved operating circumstances as they arise.

R J G Macdonald 

Executive Chairman

21 November 2008

Consolidated income statement

for the six months ended 30 September 2008 (unaudited)

	Notes	Six months ended 30 September 2008		Six months ended 30 September 2007		Year ended 31 March 2008
		£000		£000		£000
Continuing operations
Gross Fee Income		12,089		11,966		24,279
Direct costs		(5,409)		(4,854)		(10,241)
Net fee income		6,680		7,112		14,038
Administrative expenses		(5,667)		(6,044)		(11,525)
Operating profit		1,013		1,068		2,513
Interest receivable and similar
income		6		1		12
Interest payable and similar charges	2	(25)		(49)		(91)
Profit before taxation		994		1,020		2,434
Taxation		(301)		(306)		(803)
Profit for the period		693		714		1,631
Profit attributable to equity
shareholders		693		714		1,631
Earnings per share	5
Basic		5.76p		5.94p		13.56p
Diluted		5.36p		5.63p		12.72p

Consolidated statement of changes in shareholders equity 

for the six months ended 30 September 2008 (unaudited)

	Called up share capital		Share premium account		Other reserve		Share option reserve	Foreign currency translation		Retained earnings		Total
	£’000		£’000		£’000		£’000	£’000		£’000		£’000
At 1 April 2007	1,203		7,095		173		78		-		2,889		11,438
Profit for the period	-		-		-		-		-		714		714
Share option charge	-		-		-		26		-		-		26
Equity dividends	-		-		-		-		-		(271)		(271)
At 30 September 2007	1,203		7,095		173		104		-		3,332		11,907
Currency translation differences	-		-		-		-		(15)		-		(15)
Profit for the period	-		-		-		-		-		917		917
Share option charge	-		-		-		32		-		-		32
Equity dividends	-		-		-		-		-		(162)		(162)
At 31 March 2008	1,203		7,095		173		136		(15)		4,087		12,679
Currency translation differences	-		-		-		-		130		-		130
Profit for the period	-		-		-		-		-		693		693
Share option charge	-		-		-		29		-		-		29
Equity dividends	-		-		-		-		-		(289)		(289)
At 30 September 2008	1,203		7,095		173		165		115		4,491		13,242

 

Consolidated balance sheet 

at 30 September 2008 (unaudited)

	As at 30 September 2008		As at 30 September 2007		As at 31 March 2008
	£'000		£'000		£'000
Assets
Non-current assets
Intangible assets	9,769		9,769		9,769
Property, plant and equipment	376		341		314
Deferred tax asset	66		141		66
	10,211		10,251		10,149
Current assets
Trade and other receivables	4,673		5,907		5,751
Cash and cash equivalents	1,780		260		688
	6,453		6,167		6,439
Total assets	16,664		16,418		16,588
Liabilities
Current Liabilities
Financial liabilities - borrowings	290		916		292
Trade and other payables	2,179		2,353		2,577
Current tax liabilities	533		542		480
	3,002		3,811		3,349
Non current liabilities
Financial liabilities - borrowings	420		700		560
Total liabilities	3,422		4,511		3,909
Net assets	13,242		11,907		12,679
Capital and reserves
Called up share capital	1,203		1,203		1,203
Share premium account	7,095		7,095		7,095
Other reserve	173		173		173
Share option reserve	165		104		136
Currency translation differences	115		-		(15)
Retained earnings	4,491		3,332		4,087
Equity shareholders funds	13,242		11,907		12,679

Consolidated Cash Flow Statement

for the six months ended 30 September 2008(unaudited)

	Notes	Six months ended 30 September 2008		Six months ended 30 September 2007		Year ended 31 March 2008
			£'000		£'000		£'000
Cash flows from operating activities
Cash generated by operations	6		1,953		177		2,096
Corporation tax paid			(248)		(275)		(758)
Net cash from/(used) in
operating activities			1,705		(98)		1,338
Cash flows from investing activities
Interest received			6		1		12
Interest paid			(25)		(49)		(91)
Net purchase of property, plant
and equipment			(163)		(95)		(146)
Net Cash used in investing activities			(182)		(143)		(225)
Cash flows from financing activities
Repayment of borrowings			(140)		(140)		(280)
Capital element of hire purchase
obligations			-		(3)		(3)
Dividends paid to shareholders			(289)		(271)		(433)
Net cash used in financing activities			(429)		(414)		(716)
Net increase /(decrease) in
cash and cash equivalents			1,094		(655)		397
Cash and cash equivalents at start
of period			676		279		279
Net cash /(debt) and cash
equivalents at end of period			1,770		(376)		676

  Notes to the Interim Financial Statements

for the six months ended 30 September 2008(unaudited)

1.    Accounting Policies

The consolidated interim financial statements are for the six months ended 30 September 2008. 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 2008.

2.    Interest

	Six months ended 30 September 2008		Six months ended 30 September 2007		Year ended 31 March 2008
		£'000		£'000		£'000
Interest expense:
Interest payable on bank
borrowings		25		49		90
Interest payable on finance
leases		-		-		1
		25		49		91

3.    Taxation on profit on ordinary activities 

Taxation has been provided by applying the standard rate of corporation tax in the UK.

4.    Dividends

	Six months ended 30 September 2008		Six months ended 30 September 2007		Year ended 31 March 2008
		£'000		£'000		£000
Final dividend for 2007 of 2.25
pence per share		-		271		271
Interim dividend for 2008 of 1.35
pence per share		-		-		162
Final dividend for 2008 of 2.25
pence per share		289		-		-
		289		271		433

5.    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 30 September 2008		Six months ended 30 September 2007		Year ended 31 March 2008
		£'000		£'000		£'000
Retained profit for basic
earnings per share		693		714		1,631
		Number		Number		Number
		'000		'000		'000
Weighted average number of
shares used for basic and
continuing earnings per share		12,029		12,029		12,029
Dilutive effect of share options
and shares to be issued		903		653		793
Diluted weighted average
number of shares used for
diluted earnings per share		12,932		12,682		12,822

		Pence		Pence		Pence
Basic earnings per share		5.76p		5.94p		13.56p
Diluted earnings per share		5.36p		5.63p		12.72p

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

	Six months ended 30 September 2008		Six months ended 30 September 2007		Year ended 31 March 2008
		£'000		£'000		£000
Operating profit		1,013		1,068		2,513
Depreciation		100		69		147
Share option reserve movement		29		26		59
Effects of exchange rate changes		130		-		(15)
(Increase)/ decrease in debtors		1,078		(1,306)		(1,150)
(Decrease)/ increase in creditors		(397)		320		542
Net cash inflow from operating
activities		1,953		177		2,096

7.    Nature of the financial information

The interim financial information for the six months ended 30 September 2008, was approved by the board on 21 November 2008.

The financial information set out above does not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The comparative results for the year ended 31 March 2008 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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