Final Results

RNS Number : 4403Y

Robert Walters PLC

01 March 2012

 



1 MARCH 2012

ROBERT WALTERS PLC

Results for the year ended 31 December 2011

STRONG RESULTS AGAINST DIFFICULT ECONOMIC BACKDROP

FINANCIAL HIGHLIGHTS

	2011	2010	% change	% change (constant currency*)
Revenue	£528.1m	£424.2m	24%	21%
Net fee income (gross profit)	£183.4m	£155.4m	18%	15%
Operating profit	£15.6m	£13.2m	18%	14%
Profit before taxation	£15.1m	£13.1m	15%	11%

* Constant currency is calculated by applying prior year exchange rates to local currency results for the current and prior years.

·     Basic earnings per share of 14.1p (2010: 12.5p).

·     Final dividend increased by 5% to 3.68p per share (2010: 3.5p), giving a total dividend for the year of 5.15p per share (2010: 4.9p).

·     Balance sheet remains strong, with net cash of £17.1m as at 31 December 2011 (31 December 2010: £24.9m).

·     Purchased £1.0m of own shares through share buy-back programme.

·     Headcount increased to 2,047 as at 31 December 2011 (31 December 2010: 1,735).

OPERATIONAL HIGHLIGHTS

·     74% of the Group's net fee income generated from outside of the UK (2010: 71%).

·     Net fee income grew across all of the Group's regions.

·     Europe grew net fee income by 29% (27%*) to £39.1m (2010: £30.4m).

o Excellent performance in France: operating profit significantly ahead and increased market share.

o Germany delivered strong growth and a second German office was opened in Frankfurt.

·     Asia Pacific increased net fee income by 23% (17%*) to £92.7m (2010: £75.6m).

o Strong growth in Australia, with Brisbane and Perth performing especially well. Sixth Australian office opened in Chatswood. First offices opened in Indonesia, Taiwan and Vietnam and fourth office opened in China.

·     UK net fee income up 3% to £47.0m (2010: £45.8m).

·     Resource Solutions secured a number of new clients across different sectors and expanded its presence in Asia Pacific and Europe.

Robert Walters, Chief Executive, commented:

"I am particularly pleased with the Group's strong performance in a year which has seen more than its fair share of economic turbulence. We have trimmed or expanded the shape of the business according to the challenges and opportunities we have experienced in different regions and sectors.

"We are mindful of current market conditions and weaker client and candidate confidence. We will run the business as we have in previous times of economic uncertainty, through sensible cost management and long-term investment in those markets offering strong growth potential.

"The Group remains well positioned to meet the challenges ahead and well placed to exploit opportunities where growth potential is strongest, given the power of our global brand, the strength of our balance sheet and the depth and experience of our management team."

The Group will publish an Interim Management Statement for the quarter ended 31 March 2012 on 5 April 2012.

ENQUIRIES:

Robert Walters plc	[phone]
Robert Walters, Chief Executive
Alan Bannatyne, Group Finance Director
Pelham Bell Pottinger
James Henderson	[phone]
	[e-mail]
Archie Berens	[phone]
	[e-mail]

Robert Walters plc

Results for the year ended 31 December 2011

Chairman's Statement

I am pleased to announce that the Group delivered profitable growth for the year despite a backdrop of volatile and uncertain global economic conditions. These results validate our long-established strategy of organic growth, geographic expansion and discipline diversification.

Results

Revenue was £528.1m (2010: £424.2m) and gross profit (net fee income) increased by 18% to £183.4m (2010: £155.4m). Operating profit was £15.6m (2010: £13.2m) and profit before taxation rose by 15% to £15.1m (2010: £13.1m). The Group has maintained a strong balance sheet with net cash of £17.1m as at 31 December 2011 (31 December 2010: £24.9m).

The Group opened six new offices and expanded into three new Asian markets during the year and now has a global footprint of 47 offices in 23 countries. 74% (2010: 71%) of net fee income is derived from our international businesses and permanent recruitment represents 69% (2010: 69%) of the Group's recruitment net fee income.

Europe was the Group's fastest-growing region with net fee income increasing by 29% this year. In Asia Pacific where the Group has a market-leading position, net fee income grew by 23% and this region now generates more than half of the Group's net fee income.

In view of the strength of the balance sheet and our confidence in the Group's long-term growth prospects, the Board will be recommending a 5% increase in the final dividend to 3.68p per share (2010: 3.5p per share). Combined with the interim dividend of 1.47p per share, this will result in a total dividend of 5.15p per share (2010: 4.9p).

During the year £1.0m of shares were purchased through the Group's share buy-back programme and the Board will be seeking shareholder approval for the renewal of the authority to repurchase up to 10% of the Group's issued share capital at the Annual General Meeting on 24 May 2012.

Finally, I would like to thank all of our staff across the globe for their loyalty and endeavours which have enabled the Group to deliver a positive set of results. Not only has it been a difficult year from a macro-economic perspective, but some of our operations also experienced other unexpected challenges, specifically the floods in Brisbane and Bangkok and the earthquakes in New Zealand and Japan.  I would like to pay tribute to our staff for their superb response to the consequences of these natural disasters.

Philip Aiken

Chairman

29 February 2012

Chief Executive's Statement

I am particularly pleased with the Group's strong performance in a year which has seen more than its fair share of economic turbulence. During the year, we opened our first offices in Indonesia, Taiwan and Vietnam, in line with our plans to enter less mature recruitment markets offering significant growth potential. We also strengthened our existing markets, through the opening of a sixth office in Australia, a second office in Germany and a fourth office in mainland China.

Group headcount increased to 2,047 as at 31 December 2011 (2010: 1,735).

Review of Operations

Asia Pacific (51% of net fee income)

Revenue was £246.6m (2010: £191.3m) and net fee income increased 23% (17% in constant currency) to £92.7m (2010: £75.6m), producing an operating profit of £12.3m (£11.9m in constant currency) (2010: £11.3m).

Australia, the region's largest business, produced strong growth in both net fee income and operating profit with our offices in Brisbane and Perth performing especially well. Our new office in Chatswood, Sydney was profitable in its first year of operation.

In Asia, China continued to produce strong net fee income growth and we opened our fourth office,  Nanjing, during the second quarter. Our business in Japan recovered well in the second half of the year following the earthquake and tsunami in March.  Hong Kong performed well, aided by strong growth in its recently established contract business and Singapore delivered solid levels of net fee income.  Our smaller, more recently established businesses in Malaysia, Thailand and Korea continued to deliver strong growth and offer opportunities in what are immature recruitment markets. 

We also expanded our footprint further across the region with the opening of offices in Jakarta, Taipei and Ho Chi Minh City. In Asia Pacific the Group now has 22 offices in 11 countries.

UK (26% of net fee income)

Revenue was £189.0m (2010: £157.9m) and net fee income increased by 3% to £47.0m (2010: £45.8m), producing an operating profit of £0.5m (2010: £1.3m).

Trading conditions in the UK remained difficult. Hiring activity in the financial services sector continued to be weak, although demand remained for high quality professionals, particularly across risk, compliance and governance. We increased net fee income across commerce finance in both London and the regions and also successfully grew our presence in sales & marketing and human resources.

Resource Solutions, our recruitment process outsourcing business, performed well, securing a number of new clients across both commerce and industry and financial services. During the year, the business also further developed its offering across both the Asia Pacific and European regions.

Europe (21% of net fee income)

Revenue was £87.4m (2010: £71.3m) and net fee income increased by 29% (27% in constant currency) to £39.1m (2010: £30.4m), producing an operating profit of £2.8m (£2.8m in constant currency) (2010: £0.8m).

France, the region's largest business, delivered an excellent performance, growing market share and significantly increasing operating profit. Germany also delivered strong growth and we opened a second German office in Frankfurt to take advantage of buoyant conditions in what remains an immature recruitment market.

Our other offices in the region delivered solid performances against the backdrop of ongoing Eurozone uncertainty.

Americas and South Africa (2% of net fee income)

Revenue was £5.1m (2010: £3.7m) and net fee income increased by 29% (35% in constant currency) to £4.6m (2010: £3.6m), producing an operating profit of £nil (£nil in constant currency) (2010: operating loss of £0.1m).

The strong performance of our recently established presence in Brazil validates our strategic intention to continue to grow the Group's presence across South America. Our operation in New York experienced difficult market conditions and in South Africa, we moved into new, larger premises to support local expansion and grew both net fee income and operating profit.

Outlook

We are mindful of current market conditions and weaker client and candidate confidence. We will run the business as we have in previous times of economic uncertainty, through sensible cost management and long-term investment in those markets offering strong growth opportunities.

The Group remains well positioned to meet the challenges ahead and well placed to exploit opportunities where growth potential is strongest, given the power of our global brand, the strength of our balance sheet and the depth and experience of our management team.

Robert Walters

Chief Executive

29 February 2012

Consolidated Income Statement

FOR THE YEAR ENDED 31 DECEMBER 2011

	2011	2010
	£'000	£'000
Revenue	528,114	424,203
Cost of sales	(344,671)	(268,819)
Gross profit	183,443	155,384
Administrative expenses	(167,810)	(142,176)
Operating profit	15,633	13,208
Finance income	368	349
Finance costs	(730)	(534)
(Loss) gain on foreign exchange	(189)	104
Profit before taxation	15,082	13,127
Taxation	(4,909)	(4,316)
Profit for the year	10,173	8,811
Attributable to:
Owners of the Company	9,866	8,613
Non-controlling interest	307	198
	10,173	8,811
Earnings per share (pence):
Basic	14.1	12.5
Diluted	12.7	11.1

The amounts above relate to continuing operations.

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 DECEMBER 2011

	2011	2010
	£'000	£'000
Profit for the year	10,173	8,811
Exchange differences on translation of overseas operations	397	2,694
Total comprehensive income and expense for the year	10,570	11,505
Attributable to:
Owners of the Company	10,263	11,307
Non-controlling interest	307	198
	10,570	11,505

Consolidated Balance Sheet

AS AT 31 DECEMBER 2011

	2011	2010
	£'000	£'000
Non-current assets
Intangible assets	9,292	8,632
Property, plant and equipment	11,564	4,909
Deferred tax assets	6,942	7,696
	27,798	21,237
Current assets
Trade and other receivables	115,680	100,410
Corporation tax receivables	327	106
Cash and cash equivalents	28,965	31,906
	144,972	132,422
Total assets	172,770	153,659
Current liabilities
Trade and other payables	(87,059)	(77,566)
Corporation tax liabilities	(1,295)	(5,548)
Bank overdrafts and loans	(11,904)	(6,828)
Provisions	(1,318)	( 1,095)
	(101,576)	(91,037)
Net current assets	43,396	41,385
Non-current liabilities
Bank loans	-	(195)
Deferred tax liabilities	(65)	(25)
Provisions	(382)	(191)
	(447)	(411)
Total liabilities	(102,023)	(91,448)
Net assets	70,747	62,211
Equity
Share capital	17,113	17,092
Share premium	21,247	21,040
Other reserves	(73,410)	(73,410)
Own shares held	(12,028)	(14,115)
Treasury shares held	(19,860)	(19,860)
Foreign exchange reserves	11,646	11,249
Retained earnings	125,534	120,017
Equity attributable to owners of the Company	70,242	62,013
Non-controlling interest	505	198
Total equity	70,747	62,211

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 DECEMBER 2011

	2011	2010
	£'000	£'000
Cash generated from operating activities	16,983	15,683
Income taxes paid	(10,004)	(519)
Net cash from operating activities	6,979	15,164
Investing activities
Acquisition of subsidiary (net of cash acquired)	-	(299)
Net interest paid	(362)	(185)
Purchases of computer software	(1,291)	(560)
Purchases of property, plant and equipment	(9,350)	(2,696)
Net cash used in investing activities	(11,003)	(3,740)
Financing activities
Equity dividends paid	(3,484)	(3,250)
Proceeds from issue of equity	228	496
Proceeds from bank loans and overdrafts	5,070	4,651
Repayment of long-term bank loans	(270)	(268)
Purchase of own shares (net of proceeds from option exercises)	(528)	(2,537)
Net cash generated (used) in financing activities	1,016	(908)
Net (decrease) increase in cash and cash equivalents	(3,008)	10,516
Cash and cash equivalents at beginning of year	31,906	19,812
Effect of foreign exchange rate changes	67	1,578
Cash and cash equivalents at end of year	28,965	31,906

                 Consolidated Statement of Changes in Equity

                 FOR THE YEAR ENDED 31 DECEMBER 2011

	Share capital	Share premium	Other reserves	Own shares held	Treasury shares held	Foreign exchange reserves	Retained earnings	Total	Non-controlling interest	Total Equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2010	17,034	20,586	(73,410)	(12,763)	(18,865)	8,555	112,197	53,334	-	53,334
Profit for the year	-	-	-	-	-	-	8,613	8,613	198	8,811
Foreign currency translation differences	-	-	-	-	-	2,694	-	2,694	-	2,694
Total comprehensive income and expense for the year	-	-	-	-	-	2,694	8,613	11,307	198	11,505
Dividends paid	-	-	-	-	-	-	(3,250)	(3,250)	-	(3,250)
Own shares purchased	-	-	-	(2,000)	(995)	-	-	(2,995)	-	(2,995)
Adjustment in respect of share schemes	-	-	-	648	-	-	2,457	3,105	-	3,105
New shares issued	58	454	-	-	-	-	-	512	-	512
Balance at 31 December 2010	17,092	21,040	(73,410)	(14,115)	(19,860)	11,249	120,017	62,013	198	62,211
Profit for the year	-	-	-	-	-	-	9,866	9,866	307	10,173
Foreign currency translation differences	-	-	-	-	-	397	-	397	-	397
Total comprehensive income and expense for the year	-	-	-	-	-	397	9,866	10,263	307	10,570
Dividends paid	-	-	-	-	-	-	(3,484)	(3,484)	-	(3,484)
Own shares purchased	-	-	-	(960)	-	-	-	(960)	-	(960)
Adjustment in respect of share schemes	-	-	-	3,047	-	-	(865)	2,182	-	2,182
New shares issued	21	207	-	-	-	-	-	228	-	228
Balance at 31 December 2011	17,113	21,247	(73,410)	(12,028)	(19,860)	11,646	125,534	70,242	505	70,747

Statement of Accounting Policies

FOR THE YEAR ENDED 31 DECEMBER 2011

Accounting Policies Basis of preparation

Robert Walters plc is a Company incorporated in the United Kingdom under the Companies Act.

The financial report for the year ended 31 December 2011 has been prepared in accordance with the historical cost convention and with International Financial Reporting Standards (IFRSs), including International Accounting Standards and Interpretations as adopted for use by the European Union, though this announcement does not itself contain sufficient information to comply with IFRSs.

The Group had net cash of £17.1m at 31 December 2011. Despite the volatile and uncertain global economic conditions, the Group remains confident of its long-term growth prospects. The Group has a strong balance sheet and considerable financial resources, together with a diverse range of clients and suppliers across different geographic locations and sectors. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.  After making enquiries, the Directors have formed a judgement, at the time of approving the accounts, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the accounts.

The financial information in this announcement, which was approved by the Board of Directors on 29 February 2012, does not constitute the Company's statutory accounts for the year ended 31 December 2011 but is derived from these accounts. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the Company's Annual General Meeting. The auditors have reported on these accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The Annual General Meeting of Robert Walters plc will be held on 24^th May 2012 at 11 Slingsby Place, St Martin's Courtyard, London WC2E 9AB.

1.	Segmental information
		2011	2010
		£'000	£'000
i)	Revenue:
	Asia Pacific	246,613	191,316
	UK	188,958	157,892
	Europe	87,449	71,326
	The Americas and South Africa	5,094	3,669
		528,114	424,203
ii)	Gross profit:
	Asia Pacific	92,721	75,586
	UK	46,952	45,805
	Europe	39,130	30,408
	The Americas and South Africa	4,640	3,585
		183,443	155,384

1.	Segmental information (continued)
			2011		2010
			£'000		£'000
iii)	Profit before taxation:
	Asia Pacific		12,327		11,268
	UK		488		1,258
	Europe		2,786		754
	The Americas and South Africa		32		(72)
	Operating profit		15,633		13,208
	Net finance costs		(551)		(81)
	Profit before taxation		15,082		13,127
iv)	Net assets:
	Asia Pacific	27,579		20,236
	UK	11,785		11,691
	Europe	8,175		2,784
	The Americas and South Africa	237		388
	Unallocated corporate assets and liabilities*	22,971		27,112
		70,747		62,211

* For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans and corporate deferred tax balances.

The analysis of revenue by destination is not materially different to the analysis by origin and the analysis of finance income and costs are not significant.

The Group is divided into geographical areas for management purposes, and it is on this basis that the segmental information has been prepared.

v)	Other information - 2011	P,P&E and  software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	4,816	1,616	13,418	51,966	(24,387)
	UK	4,937	1,220	5,731	59,905	(48,119)
	Europe	666	317	1,454	22,556	(14,381)
	The Americas and South Africa	222	63	253	2,109	(1,872)
	Unallocated corporate assets and liabilities*	-	-	6,942	36,624	(13,264)
		10,641	3,216	27,798	172,770	(102,023)
1.	Segmental information (continued)
v)	Other information - 2010	P,P&E and software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	1,182	1,135	10,145	39,762	(19,526)
	UK	1,696	1,614	2,028	53,830	(42,139)
	Europe	288	279	1,233	18,422	(15,638)
	The Americas and South Africa	90	46	135	1,937	(1,549)
	Unallocated corporate assets and liabilities*	-	-	7,696	39,708	(12,596)
		3,256	3,074	21,237	153,659	(91,448)

		2011	2010
		£'000	£'000
vi)	Revenue by business grouping:
	Robert Walters	446,169	366,912
	Resource Solutions (recruitment process outsourcing)	81,945	57,291
		528,114	424,203

*For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans and corporate deferred tax balances.

2.	Finance costs
		2011	2010
		£'000	£'000
	Interest on bank overdrafts	644	445
	Interest on bank loans	86	89
	Total borrowing costs	730	534

3.	Taxation
		2011	2010
		£'000	£'000
	Current tax charge
	Corporation tax - Overseas	5,848	7,307
	Adjustments in respect of prior years
	Corporation tax - UK	(74)	77
	Corporation tax - Overseas	(171)	(83)
		5,603	7,301
	Deferred tax
	Deferred tax - UK	(815)	(1,561)
	Deferred tax - Overseas	124	(1,184)
	Adjustments in respect of prior years
	Deferred tax - UK	894	(283)
	Deferred tax - Overseas	(897)	43
		(694)	(2,985)
	Total tax charge for year	4,909	4,316
	Profit before taxation	15,082	13,127
	Tax at standard UK corporation tax rate of 26.5% (2010: 28%)	3,997	3,676
	Effects of:
	Unrelieved losses	239	314
	Other expenses not deductible for tax purposes	126	255
	Overseas earnings taxed at different rates	537	117
	Adjustments to tax charges in previous years	(247)	(245)
	Impact of tax rate change	257	199
	Total tax charge for year	4,909	4,316

4.	Dividends
		2011	2010
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Interim dividend paid of 1.47p per share (2010: 1.40p)	1,027	958
	Final dividend for 2010 of 3.5p per share (2009: 3.35p)	2,457	2,292
		3,484	3,250
	Proposed final dividend for 2011 of 3.68p per share  (2010: 3.5p)	2,568	2,393
	The proposed final dividend of £2,568,000 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	The final dividend, if approved, will be paid on 15 June 2012 to those shareholders on the register as at 25 May 2012.
5.	Earnings per share
	The calculation of earnings per share is based on the profit for the year attributable to equity holders of the parent and the weighted average number of shares of the Company.
		2011	2010
		£'000	£'000
	Profit for the year attributable to equity holders of the parent	9,866	8,613
		2011	2010
		Number of shares	Number of shares
	Weighted average number of shares:
	Shares in issue throughout the year	85,463,121	85,168,703
	Shares issued in the year	79,054	145,800
	Treasury and own shares held	(15,810,840)	(16,667,426)
	For basic earnings per share	69,731,335	68,647,077
	Outstanding share options	7,841,200	8,996,317
	For diluted earnings per share	77,572,535	77,643,394

6.	Intangible assets
		Goodwill	Computer software	Total
		£'000	£'000	£'000
	Cost:
	At 1 January 2010	7,840	5,406	13,246
	Additions	-	560	560
	Disposals	-	(20)	(20)
	Foreign currency translation differences	34	112	146
	At 31 December 2010	7,874	6,058	13,932
	Additions	-	1,291	1,291
	Disposals	-	(38)	(38)
	Foreign currency translation differences	68	20	88
	At 31 December 2011	7,942	7,331	15,273
	Accumulated amortisation and impairment:
	At 1 January 2010	-	4,333	4,333
	Charge for the year	-	899	899
	Disposals	-	(20)	(20)
	Foreign currency translation differences	-	88	88
	At 31 December 2010	-	5,300	5,300
	Charge for the year	-	698	698
	Disposals	-	(30)	(30)
	Foreign currency translation differences	-	13	13
	At 31 December 2011	-	5,981	5,981
	Carrying value:
	At 1 January 2010	7,840	1,073	8,913
	At 31 December 2010	7,874	758	8,632
	At 31 December 2011	7,942	1,350	9,262

The carrying value of goodwill relates to the acquisition of Talent Spotter in China (£1,095,000) and the historic acquisition of the Dunhill Group in Australia (£6,847,000).  The historical acquisition cost of Talent Spotter was £768,000, with the movement to the current carrying value a result of foreign currency translation differences. Goodwill is tested annually for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of the goodwill is based on value in use calculations over the next five years, calculated by preparing cash flow forecasts derived from the most recent financial budgets for the next year and an assumed growth rate of 3% for years two to five, which does not exceed the long-term average potential growth rate of the respective operations.  The forecast for revenue and costs as approved by the Board reflect the latest industry forecasts and management expectation based on past experience. The value of the cash flows is then discounted at a post-tax rate of 7.8% (pre-tax rate of 11.6%), based on the Group's estimated weighted average cost of capital.

7.	Property, plant and equipment
		Leasehold improvements £'000	Fixtures, fittings and office equipment £'000	Computer equipment £'000	Motor vehicles £'000	Total £'000
	Cost:
	At 1 January 2010	3,957	7,236	3,941	64	15,198
	Additions	694	623	1,328	51	2,696
	Disposals	(145)	(171)	(209)	(39)	(564)
	Foreign currency translation differences	194	294	207	2	697
	At 31 December 2010	4,700	7,982	5,267	78	18,027
	Additions	3,521	3,962	1,859	8	9,350
	Disposals	(2,248)	(1,621)	(531)	-	(4,400)
	Foreign currency translation differences	55	(53)	39	(5)	36
	At 31 December 2011	6,028	10,270	6,634	81	23,013
	Accumulated depreciation and impairment:
	At 1 January 2010	3,186	4,601	3,088	52	10,927
	Charge for the year	528	821	812	14	2,175
	Disposals	(142)	(100)	(209)	(37)	(488)
	Foreign currency translation differences	159	217	130	(2)	504
	At 31 December 2010	3,731	5,539	3,821	27	13,118
	Charge for the year	658	836	1,009	15	2,518
	Disposals	(2,284)	(1,470)	(481)	-	(4,235)
	Foreign currency translation differences	50	(20)	17	1	48
	At 31 December 2011	2,155	4,885	4,366	43	11,449
	Carrying value:
	At 1 January 2010	771	2,635	853	12	4,271
	At 31 December 2010	969	2,443	1,446	51	4,909
	At 31 December 2011	3,873	5,385	2,268	38	11,564

8.	Trade and other receivables
		2011	2010
		£'000	£'000
	Receivables due within one year:
	Trade receivables	89,443	78,023
	Other receivables	5,194	2,449
	Prepayments and accrued income	21,043	19,938
		115,680	100,410

9.	Trade and other payables: amounts falling due within one year
		2011	2010
		£'000	£'000
	Trade payables	2,553	2,820
	Other taxation and social security	17,862	18,192
	Other trade payables	18,542	14,008
	Accruals and deferred income	48,102	42,546
		87,059	77,566

There is no material difference between the fair value and the carrying value of the Group's trade and other payables.

10.	Bank overdrafts and loans
		2011	2010
		£'000	£'000
	Bank overdrafts and loans: current	11,904	6,828
	Bank loans: non-current	-	195
		11,904	7,023
	The borrowings are repayable as follows:
	Within one year	11,904	6,828
	In the second year	-	195
		11,904	7,023

In March 2008, the Group borrowed Renminbi 20m (£2.0m) at a rate of 110% of the People Bank of China base rate to finance the acquisition of Talent Spotter and provide working capital.  Of the Renminbi 20m (£2.0m), Renminbi 10m (£1.0m) was a long-term loan and repayable over four years. The remaining Renminbi 10m (£1.0m) is a short-term facility, which was increased to Renminbi 15m (£1.5m) in March 2011.  The loan is secured against cash deposits in Hong Kong.

10.	Bank loans (continued)

In June 2010, the Group entered into a committed, three-year, £20.0m receivables financing agreement. At 31 December 2011, £10.2m was drawn down under this facility. In February 2012 this facility was increased to a committed, £25.0m receivables financing agreement and the term extended until February 2014.

The Directors estimate that the fair value of all borrowings is not materially different from the amounts stated in the Consolidated Balance Sheet of £11,904,000 (2010: £7,023,000).

11.	Notes to the cash flow statement
		2011	2010
		£'000	£'000
	Operating profit	15,633	13,208
	Adjustments for:
	Depreciation and amortisation charges	3,216	3,074
	Loss on disposal of property, plant and equipment and computer software	173	76
	Movement in share scheme balance	3,377	1,368
	Operating cash flows before movements in working capital	22,399	17,726
	Increase in receivables	(15,202)	(30,953)
	Increase in payables	9,786	28,910
	Cash generated from operating activities	16,983	15,683

12.	Reconciliation of net cash flow to movement in net funds
		2011	2010
		£'000	£'000
	(Decrease) increase in cash and cash equivalents in the year	(3,008)	10,516
	Cash inflow from movement in bank loans	(4,800)	(4,383)
	Foreign currency translation differences	(14)	1,479
	Movement in net cash in the year	(7,822)	7,612
	Net cash at beginning of year	24,883	17,271
	Net cash at end of year	17,061	24,883

Net cash is defined as cash and cash equivalents less bank loans.

 

END

 

 

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