Preliminary Results

Prime People PLC 05 March 2004 PRIME PEOPLE PLC Operations: principally specialist recruitment of senior managers for the leisure industry, together with a related training business PRELIMINARY RESULTS FOR THE YEAR ENDED DECEMBER 31, 2003 KEY POINTS • Group loss before tax of £0.53m compared to a profit of £0.27m in 2002 • Sales from continuing operations down 22% to 3.05m (2002 £3.93m) • Diluted earnings per share reduced from 0.48p to a loss per share of 1.21p • In the light of the group's disappointing performance no dividend will be paid • Portfolio Design International was closed on 31 March 2003 without further costs being incurred by the group • The balance sheet remains strong with net funds of £0.95m • It is our intention to move from the Official List and apply for admission to AIM Commenting on the results, chairman Richard Lee said, 'Given the continued uncertainty of the economic and political climate it remains difficult to predict how the group will perform in 2004. We will, however, continue to develop the business as demand dictates and will broaden the base of the group's operations if the opportunity arises.' Press enquiries: Richard Lee, chairman 0161 832 6644 Chris Heayberd, finance director 020 7520 5000 PRIME PEOPLE Plc Chairman's statement ________________________________________________________________________________ Introduction We anticipated that 2003 would be a difficult year for the recruitment sector and this is borne out by our own performance where revenue is much reduced when compared to the prior year although there are signs that confidence is returning. Results Turnover from continuing operations during the year declined by 22% from £3.93m to £3.05m. This comprised a fall of 26% in sales from recruitment and a fall of 7% from training. The resulting operating loss for the year from continuing operations was £339,998 compared to a profit of £348,878 in the previous year. As reported in our interim statement a substantial proportion of the loss arose from the contractual termination payment of £298,206 (including employer's national insurance costs) made to David Coubrough, who resigned as Chief Executive of the group on 30 April. We also report that our associate business, Cameron Kennedy, continues to be loss making and our share of their operating losses for the year has increased from £53,522 to £205,343. Notwithstanding this loss, a dividend of £83,700 was received in the year. Although there was improved performance in the second half of the year, overall, we closed 2003 with a loss on ordinary activities of £525,744 compared to a profit of £266,746 in 2002. Diluted earnings per share reduced from 0.48p to a loss per share of 1.21p. Whilst group cash-flow has been negative over the year producing a decrease in cash and liquid resources of £0.21m our continued focus on the strength of our balance sheet has ensured that the Group remains in a strong financial position with a closing cash balance of £0.95m. Portfolio International 2003 started very slowly and at the half year turnover was down by 33% when compared to the previous 6 month period. We took the necessary steps to reduce consultant head count, and focused attention on those areas where activity was strongest. In the second half of the year turnover has picked up slightly, being 5% higher than the first 6 months, although remaining 18% down on the corresponding period in the previous year. There are modest signs of a return to growth in certain sectors. Our leisure, fitness and international divisions have demonstrated improved sales rates, which we are optimistic will continue into 2004. We remain cautious as to the likely outcome for the year, but are hoping that the initial indications of recovery that we are experiencing will spread across all of our business divisions. Portfolio Design International As indicated this time last year it was our intention to close the design business on 31 March 2003, which we have done, and we are pleased to report that no further costs were incurred by the group during the closure process. Harper Craven Associates The business had a disappointing second half to the year, where turnover fell by 11% when compared to the first 6 months. Consequently both turnover and profit contributed by the business in 2003 were down on the previous year. However, enquiry levels are reasonably strong and the company has moved into the new year with customer commitments up by 128%. Cameron Kennedy Resources Our view this time last year that the banking and financial marketplace would remain difficult to predict has unfortunately proved to be the case. Our share of its losses after goodwill amortisation has increased from £85,772 in 2002 to £217,343 in 2003. The business reports a marked increase in sales activity in the last quarter and we are, therefore, hopeful that the business will once again return to making a profit contribution to the group Share Option Scheme Following the preliminary announcement of our 2002 results, we granted options under the 2001 Employee Share Option Scheme to certain key staff to subscribe for 500,000 shares at an exercise price of 4.833p. All options granted will be subject to achieving performance targets and are exercisable between 8 March 2006 and 8 March 2013. Alternative Investment Market (AIM) During the year we have reviewed the continuing suitability for a company of our size remaining on the Official List and conclude that there are a number of compelling reasons for moving to AIM. It is, therefore, our intention to apply for admission to AIM immediately following the announcement of these results and, as required, we will be appointing a Nominated Advisor (NOMAD). Prospects Looking ahead, we continue to be affected by the general economic climate and we cannot be certain what impact this will have on our own recruitment business. Overhead costs remain very closely monitored. We do not anticipate any significant changes to the performance of the training business in the coming year and we look forward to an improved result from Cameron Kennedy as the financial sector continues to recover. Your Board continues to look for opportunities to develop the business and broaden the base of its operations. It is not our intention to make a dividend payment. Richard E M Lee Non Executive Chairman 4 March 2004 PRIME PEOPLE Plc Consolidated profit and loss account for the year ended 31 December 2003 ________________________________________________________________________________________________________________________ Continuing operations Discontinued operations Total Note 2003 2002 2003 2002 2003 2002 £ £ £ £ £ £ Turnover 3,053,294 3,933,886 36,588 168,348 3,089,882 4,102,234 Cost of sales (159,157) (169,285) (1,322) (3,366) (160,479) (172,651) ___________ __________ __________ __________ ___________ __________ Gross profit 2,894,137 3,764,601 35,266 164,982 2,929,403 3,929,583 Administrative expenses (3,234,135) (3,415,723) (33,051) (193,258) (3,267,186) (3,608,981) ___________ __________ __________ __________ ___________ __________ Group operating (loss)/profit (339,998) 348,878 2,215 (28,276) (337,783) 320,602 Share of operating loss in Associates (205,343) (53,522) - - (205,343) (53,522) Amortisation of goodwill (12,000) (12,000) - - (12,000) (12,000) Loss arising from dilution of interest in associates - (20,250) - - - (20,250) (217,343) (85,722) - - (217,343) (85,772) ___________ __________ __________ __________ ___________ __________ (Loss)/profit on ordinary activities before interest (557,341) 263,106 2,215 (28,276) (555,126) 234,830 Interest receivable and similar income (group) 29,382 32,452 Interest payable and similar charges - (536) ___________ __________ (Loss)/profit on ordinary activities before taxation (525,744) 266,746 Taxation on (loss)/profit on ordinary activities 82,576 (91,906) ___________ __________ (Loss)/profit on ordinary activities after taxation and transferred to reserves (443,168) 174,840 ___________ __________ (Loss)/earnings per share - Basic 2 (1.21)p 0.48p - Diluted 2 (1.21)p 0.48p ________ ________ All recognised gains and losses are included in the profit and loss account. PRIME PEOPLE Plc Consolidated balance sheet at 31 December 2003 _______________________________________________________________________________________________________ 2003 2003 2002 2002 £ £ £ £ Fixed assets Tangible assets 61,656 142,449 Investments: Investment in associate 336,544 630,652 __________ __________ 398,200 773,101 Current assets Debtors 1,122,696 1,235,628 Cash at bank and in hand 996,494 1,228,340 __________ __________ 2,119,190 2,463,968 Creditors: amounts falling due within one year 490,446 796,957 __________ __________ Net current assets 1,628,744 1,667,011 __________ __________ Total assets less current liabilities 2,026,944 2,440,112 __________ __________ Capital and reserves Called up share capital 368,467 363,467 Share premium account 909,925 884,925 Merger reserve 173,077 173,077 Profit and loss account 1 575,475 1,018,643 __________ __________ Equity shareholders' funds 2,026,944 2,440,112 __________ __________ PRIME PEOPLE Plc Consolidated cash flow statement for the year ended 31 December 2003 ______________________________________________________________________________________________________________________ Note 2003 2003 2002 2002 £ £ £ £ Net cash (outflow)/inflow from operating activities 3 (233,078) 502,582 Dividend from associated undertaking 83,700 - Returns on investment and servicing of finance Interest received 29,382 32,452 Interest paid - (536) __________ __________ 29,382 31,916 Taxation (107,873) (7,963) Capital expenditure and financial investment Purchase of tangible fixed assets (28,375) (33,313) Sale of tangible fixed assets 17,388 30,300 __________ __________ (10,987) (3,013) __________ __________ Net cash (outflow)/inflow before management of liquid resources and financing (238,856) 523,522 Management of liquid resources Sale/(purchase) of treasury deposits 104,000 (600,000) Financing Issue of ordinary share capital 30,000 - Capital element of finance leases - 13,828 __________ __________ Decrease in cash 4 (104,856) (90,306) __________ __________ PRIME PEOPLE Plc Notes to the preliminary announcement for the year ended 31 December 2003 ________________________________________________________________________________ 1 Accounting Policies The final 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 2002. 2 Loss per share The loss per share is calculated based on a weighted average number of shares of 36,680,025 (2002 - 36,346,692) and the loss of £443,168 (2002 - profit £174,840), giving a loss per share of 1.21p (2002 - earnings per share 0.48p). Diluted loss per share is based on the above loss and adjusts the basic weighted average number of shares as a result of dilutive share options. There are no dilutive potential ordinary shares in the year ended 31 December 2003. The weighted average number of shares in issue calculated under the different methods reconciles as follows: 2003 2002 £ £ Basic 36,680,025 36,346,692 Number of shares under option - 1,043,298 Number of shares which would have been issued at fair value - (818,609) __________ ___________ Diluted 36,680,025 36,571,381 __________ ___________ 3 Reconciliation of operating profit to net cash (outflow)/inflow from operating activities 2003 2002 £ £ Group operating (loss)/profit (337,783) 320,602 Depreciation 83,709 151,205 Loss/(profit) on sale of tangible fixed assets 8,071 (7,296) Decrease/(increase) in debtors 187,274 (39,775) (Decrease)/increase in creditors (174,349) 77,846 __________ ___________ Net cash (outflow)/inflow from operating activities (233,078) 502,582 __________ ___________ PRIME PEOPLE Plc Notes to the preliminary announcement for the year ended 31 December 2003 ________________________________________________________________________________________ 4 Reconciliation of net cash (outflow)/inflow to movement in net funds 2003 2003 2002 2002 £ £ £ £ Decrease in cash in the year (104,856) (90,306) Cash outflow from decrease in debt and lease financing - 13,828 Cash (inflow)/outflow from ( decrease)/increase in liquid resources (104,000) 600,000 __________ __________ (Decrease)/increase in net funds resulting from cash flows in the year (208,856) 523,522 Opening net funds 1,156,626 633,104 __________ __________ Closing net funds 947,770 1,156,626 __________ __________ 5 Nature of the financial information The financial information does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2003 is extracted from the group's financial statements to that date which received an unqualified auditors' report and will be filed with the Registrar of Companies. The financial information for the year ended 31 December 2002 is extracted from the financial statements to that date which received an unqualified auditors' report and have been filed with the Registrar of Companies. This information is provided by RNS The company news service from the London Stock Exchange

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Macdonalds & Company Holdings ltd (formerly Prime People plc - PRP) (MAC.AMPX)
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