Full Year Results

RNS Number : 9096F

Robert Walters PLC

26 February 2015

 



 26 February 2015

ROBERT WALTERS PLC

(the 'Company' or the 'Group')

Results for the year ended 31 December 2014

PROFITS UP 80%

Robert Walters plc (LSE: RWA), the international specialist professional recruitment consultancy, today announces its results for the year ended 31 December 2014.

Financial and Operational Highlights

Year ended	2014	2013	% change	%  change (constant currency*)
Revenue	£679.6m	£597.7m	14%	19%
Gross profit (net fee income)	£215.3m	£199.2m	8%	14%
Operating profit	£18.2m	£10.8m	68%	78%
Profit before taxation	£18.2m	£10.1m	80%	91%
Basic earnings per share	15.3p	8.4p	82%

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

·      Strong net fee income growth in constant currency across all of the Group's regions driving an 80% increase in profit before taxation, to £18.2m.

·      Excellent performance in the UK with net fee income increasing by 24%.

o  Growth across both London and the regions.

o  Increased activity in permanent financial services recruitment in London.

·      Asia Pacific net fee income up 8% in constant currency.

o  Emerging market strategy has proven successful with our newer operations in Malaysia, Thailand, and Vietnam, in particular, delivering excellent growth in net fee income.

o  Strong growth also delivered across more established markets such as Japan, Singapore and Hong Kong.

o  Australia returned to growth during the fourth quarter.  Record performance in New Zealand.

·      Europe net fee income up 10% in constant currency.

o  Excellent contract growth in France and Benelux.

o  Permanent recruitment grew strongly in Belgium and Ireland. Spain delivered record net fee income.

·      Other International net fee income up 35% in constant currency.

o  Middle East business more than doubled net fee income year-on-year.

o  US had a record year across both New York and San Francisco.

·      Resource Solutions, the Group's recruitment process outsourcing business continued to deliver significant net fee income growth in the UK and Asia across both new and existing clients.

·      Final dividend per share increased 13% to 4.35p (2013: 3.86p).

·      Group headcount increased to 2,631 (2013: 2,307).

·      1.3m shares were purchased at an average price of £3.11 for £4.0m, in line with the Group's share buyback programme.

·      Strong balance sheet with net cash of £14.3m as at 31 December 2014 (2013: £18.6m).

Robert Walters, Chief Executive, said:

"We delivered an excellent performance in 2014, increasing profit before taxation by 80%. This is testament to the strength, depth and diversity that the Group now has in terms of both geography and discipline.

"Early trading in 2015 has been in line with expectations. Whilst we are mindful of continued Eurozone uncertainty, we believe we are very well positioned to capitalise on both current and future growth opportunities."

The Company will be holding a presentation for analysts at 10am today at Newgate Communications, Sky Light City Tower, 50 Basinghall Street, London EC2V 5DE.

The Group will publish an Interim Management Statement for the first quarter ended 31 March 2015 on 8 April 2015.

- Ends -

For further information please contact:

Robert Walters plc Robert Walters, Chief Executive Alan Bannatyne, Chief Financial Officer	[phone]
Newgate Communications Fergus Wylie Madeleine Palmstierna	[phone]

About Robert Walters

Robert Walters is a market-leading international specialist professional recruitment consultancy with over 2,600 staff spanning 24 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial and support and supply chain and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups.

Businesses worldwide rely on us to find the very best specialist professionals to drive their business forward and those same professionals trust us to manage their long-term careers.

www.robertwalters.com

Robert Walters plc

Results for the year ended 31 December 2014

Chairman's Statement

I am very pleased to report that the Group delivered an exceptionally strong performance in 2014, increasing profit before taxation by 80% (91%*). Our strategy of long-term investment in the business across both our established businesses and high-growth potential, emerging recruitment markets has enabled us to leverage the Group's operational gearing to deliver an excellent result for the year.

Revenue was up 14% (19%*) to £679.6m (2013: £597.7m) and gross profit (net fee income) increased by 8% (14%*) to £215.3m (2013: £199.2m). Operating profit was up 68% (78%*) to £18.2m (2013: £10.8m) and earnings per share increased by 82% to 15.3p per share (2013: 8.4p per share). The Group has a strong balance sheet with net cash of £14.3m as at 31 December 2014 (31 December 2013: £18.6m). Permanent recruitment represents 69% (2013: 69%) of recruitment net fee income.

In line with our strategy, we have grown staff numbers in emerging markets and in mature markets where activity levels are increasing and additionally we have won a number of new Resource Solutions clients in the UK and Asia. Headcount at the end of the year increased by 14% to 2,631 (2013: 2,307).

The Board will be recommending a 13% increase in the final dividend to 4.35p per share which combined with the interim dividend of 1.65p per share will result in a total dividend of 6.0p per share (2013: 5.4p). In 2014, 1.3m shares were purchased at an average price of £3.11 for £4.0m through the Group's long-term share buy-back programme. The Board is authorised to re-purchase up to 10% of the Group's issued share capital and will be seeking approval for the renewal of this authority at the Annual General Meeting on 3 June 2015.

Finally, I would like to thank everyone in the Group for their hard work, drive, commitment and loyalty.

Leslie Van de Walle

Chairman

25 February 2015

Chief Executive's Statement

Review of Operations

The excellent performance in 2014 served to further highlight the strength, depth and diversity that the Group now has in terms of both geography and discipline. We have been able to leverage this strength to deliver an 80% (91%*) increase in profit before taxation, a result that was particularly impressive given that market conditions in two of the Group's largest markets, Australia and France, remained challenging for much of last year.

We have a strong blend of permanent and contract recruitment net fee income, a truly global footprint of growing recruitment businesses across both established and embryonic recruitment markets plus a market-leading recruitment process outsourcing business - all of which is underpinned by a powerful international brand and a strong and experienced senior management team.

The recruitment industry continues to evolve through the advent of new resourcing strategies and technologies and we remain firmly at the forefront of these developments. The role of a high-quality specialist professional recruitment consultancy, such as Robert Walters, to filter and manage the increased volume of data and the number of communication channels available to candidates and clients has never been more important. In addition, our Resource Solutions business ensures we are extremely well placed to benefit from the trend towards an outsourced recruitment model.

Asia Pacific (42% of net fee income)

Revenue was £251.4m (2013: £260.1m) and net fee income was £90.5m (2013: £92.1m) an increase of 8% in constant currency. This delivered an operating profit increase of 45% (59%*) to £10.5m (£11.5m*) (2013: £7.2m).

In Asia we have benefited from strong growth within our larger, more mature and market-leading businesses in Japan, Singapore and Hong Kong and, very encouragingly, we are also now seeing positive returns from our more recent investments in a number of the region's emerging recruitment markets. Our operations in Malaysia, Thailand and Vietnam in particular have delivered excellent net fee income growth and, critically, have the capacity to grow into substantial businesses.

Australia returned to growth in the fourth quarter and in New Zealand, our businesses in Auckland and Wellington both delivered record performances.

Resource Solutions in Asia won a number of new clients and also successfully extended a number of existing client deals.  

UK (33% of net fee income)

Revenue was £311.9m (2013: £235.7m), net fee income increased by 24% to £71.1m (2013: £57.2m) and operating profit more than doubled to £5.2m (2013: £2.5m).

The UK had an excellent year as both client and candidate confidence continued to improve. Growth was broad-based and spread across both London and the regions, with disciplines such as commerce finance, legal and sales & marketing delivering particularly strong performances. Also of particular note, was the beginning of a recovery in the permanent financial services market in London, with recruitment levels across risk, compliance and projects particularly high.

To continue to build on this performance and further extend our regional presence, we have opened a new office in St. Albans.

Resource Solutions continued to deliver impressive results increasing net fee income significantly year-on-year. 

Europe (20% of net fee income)

Revenue was £106.4m (2013: £93.9m) and net fee income increased 4% (10%*) to £43.8m (£46.1m*) (2013: £42.0m) producing a 73% increase in operating profit to £2.2m (£2.3m*) (2013: £1.3m).

Market conditions across the Eurozone were mixed. In France, our largest business in the region, the permanent recruitment market remained challenging, however our contract business continues to go from strength to strength and produced excellent growth.

Recruitment activity levels across the Benelux region were more favourable, with our business in Belgium the standout performer across both the permanent and contract markets. We continue to focus on Germany as a key growth market for the Group and are also very encouraged by the strong performance in a number of our smaller markets in the region such as Spain and Ireland.

Other International (5% of net fee income)

Revenue was £9.9m (2013: £8.0m) and net fee income increased by 25% (35%*) to £9.9m (£10.7m*) (2013: £7.9m) producing an operating profit of £0.3m (operating profit of £0.2m*) (2013: operating loss of £0.2m).

Other International comprises the US, South Africa, the Middle East and Brazil. Our business in the US had a record year with both San Francisco and New York delivering excellent growth. In New York, much like London, we have seen a recovery in the permanent financial services market with areas such as compliance particularly active, whilst the technology-driven San Francisco market remains extremely buoyant.

Client and candidate confidence in Brazil remains low, our office in Dubai more than doubled net fee income year-on-year whilst in South Africa net fee income grew strongly and we are now one of the largest international players in the market.

Current Trading and Outlook

Having entered seven new countries since 2010, the Robert Walters Group now has over 2,600 staff spanning 24 countries.  We have focused on increasing the profitability and productivity of our fledging businesses and the Group as a whole, delivering an 80% uplift in profit before taxation and an increase in consultant productivity.

Early trading in 2015 has been in line with expectations. Whilst we are mindful of continued Eurozone uncertainty, we believe we are very well positioned to capitalise on both current and future growth opportunities.

Robert Walters

Chief Executive

25 February 2015

Consolidated Income Statement

FOR THE YEAR ENDED 31 DECEMBER 2014

	2014	2013
	£'000	£'000
Revenue	679,604	597,719
Cost of sales	(464,286)	(398,525)
Gross profit	215,318	199,194
Administrative expenses	(197,098)	(188,360)
Operating profit	18,220	10,834
Finance income	137	121
Finance costs	(464)	(797)
Gain (loss) on foreign exchange	266	(87)
Profit before taxation	18,159	10,071
Taxation	(6,904)	(3,915)
Profit for the year	11,255	6,156
Attributable to:
Owners of the Company	11,255	6,156
Earnings per share (pence):
Basic	15.3	8.4
Diluted	13.9	7.7

The amounts above relate to continuing operations.

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 DECEMBER 2014

	2014	2013
	£'000	£'000
Profit for the year	11,255	6,156
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of overseas operations	(1,553)	(5,164)
Total comprehensive income and expense for the year	9,702	992
Attributable to:
Owners of the Company	9,702	992

Consolidated Balance Sheet

AS AT 31 DECEMBER 2014

	2014	2013
	£'000	£'000
Non-current assets
Intangible assets	9,577	9,517
Property, plant and equipment	8,156	9,300
Deferred tax assets	8,216	8,998
	25,949	27,815
Current assets
Trade and other receivables	168,240	153,700
Corporation tax receivables	117	1,949
Cash and cash equivalents	38,205	30,071
	206,562	185,720
Total assets	232,511	213,535
Current liabilities
Trade and other payables	(125,527)	(124,149)
Corporation tax liabilities	(3,672)	(2,314)
Bank overdrafts and loans	(23,904)	(11,496)
Provisions	(377)	(606)
	(153,480)	(138,565)
Net current assets	53,082	47,155
Non-current liabilities
Deferred tax liabilities	(10)	(39)
Provisions	(1,647)	(1,049)
	(1,657)	(1,088)
Total liabilities	(155,137)	(139,653)
Net assets	77,374	73,882
Equity
Share capital	17,192	17,177
Share premium	21,753	21,753
Other reserves	(73,410)	(73,410)
Own shares held	(8,765)	(5,876)
Treasury shares held	(19,860)	(19,860)
Foreign exchange reserves	2,432	3,985
Retained earnings	138,032	130,113
Equity attributable to owners of the Company	77,374	73,882

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 DECEMBER 2014

	2014	2013
	£'000	£'000
Cash generated from operating activities	11,270	19,240
Income taxes paid	(3,232)	(2,798)
Net cash from operating activities	8,038	16,442
Investing activities
Interest received	137	121
Purchases of computer software	(1,016)	(1,096)
Purchases of property, plant and equipment	(2,294)	(1,351)
Purchase of non-controlling interest	(482)	(715)
Net cash used in investing activities	(3,655)	(3,041)
Financing activities
Equity dividends paid	(4,087)	(3,826)
Proceeds from issue of equity	15	567
Interest paid	(464)	(797)
Proceeds from bank loans and overdrafts	12,381	-
Repayment of bank loans	-	(3,061)
Purchase of own shares	(4,032)	-
Proceeds from exercise of share options	465	-
Net cash generated (used) in financing activities	4,278	(7,117)
Net increase in cash and cash equivalents	8,661	6,284
Cash and cash equivalents at beginning of year	30,071	26,022
Effect of foreign exchange rate changes	(527)	(2,235)
Cash and cash equivalents at end of year	38,205	30,071

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 31 DECEMBER 2014

	Share capital	Share premium	Other reserves	Own shares held	Treasury shares held	Foreign exchange reserves	Retained earnings	Total equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2013	17,114	21,249	(73,410)	(9,121)	(19,860)	9,149	126,397	71,518
Profit for the year	-	-	-	-	-	-	6,156	6,156
Foreign currency translation differences	-	-	-	-	-	(5,164)	-	(5,164)
Total comprehensive income and expense for the year	-	-	-	-	-	(5,164)	6,156	992
Dividends paid	-	-	-	-	-	-	(3,826)	(3,826)
Credit to equity for equity-settled share-based payments	-	-	-	-	-	-	3,855	3,855
Deferred tax on share-based payment transactions	-	-	-	-	-	-	776	776
Transfer to own shares held on exercise of equity incentives	-	-	-	3,245	-	-	(3,245)	-
New shares issued	63	504	-	-	-	-	-	567
Balance at 31 December 2013	17,177	21,753	(73,410)	(5,876)	(19,860)	3,985	130,113	73,882
Profit for the year	-	-	-	-	-	-	11,255	11,255
Foreign currency translation differences	-	-	-	-	-	(1,553)	-	(1,553)
Total comprehensive income and expense for the year	-	-	-	-	-	(1,553)	11,255	9,702
Dividends paid	-	-	-	-	-	-	(4,087)	(4,087)
Credit to equity for equity-settled share-based payments	-	-	-	-	-	-	1,708	1,708
Deferred tax on share-based payment transactions	-	-	-	-	-	-	(280)	(280)
Transfer to own shares held on exercise of equity incentives	-	-	-	677	-	-	(677)	-
New shares issued and own shares purchased	15	-	-	(3,566)	-	-	-	(3,551)
Balance at 31 December 2014	17,192	21,753	(73,410)	(8,765)	(19,860)	2,432	138,032	77,374

Statement of Accounting Policies

FOR THE YEAR ENDED 31 DECEMBER 2014

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 2014 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 £14.3m at 31 December 2014. 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 ajudgement, 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 25 February 2015, does not constitute the Company's statutory accounts for the year ended 31 December 2014 but is derived from these accounts. Statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 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 3 June 2015 at 11 Slingsby Place, St Martin's Courtyard, London WC2E 9AB.

1.	Segmental information
		2014	2013
		£'000	£'000
i)	Revenue:
	Asia Pacific	251,363	260,145
	UK	311,941	235,734
	Europe	106,351	93,855
	Other International	9,949	7,985
		679,604	597,719
ii)	Gross profit:
	Asia Pacific	90,536	92,069
	UK	71,100	57,161
	Europe	43,798	42,036
	Other International	9,884	7,928
		215,318	199,194

1.	Segmental information (continued)
			2014		2013
			£'000		£'000
iii)	Profit before taxation:
	Asia Pacific		10,502		7,242
	UK		5,248		2,540
	Europe		2,173		1,258
	Other International		297		(206)
	Operating profit		18,220		10,834
	Net finance costs		(61)		(763)
	Profit before taxation		18,159		10,071
iv)	Net assets:
	Asia Pacific	28,318		26,929
	UK	22,247		11,309
	Europe	6,993		8,099
	Other International	864		376
	Unallocated corporate assets and liabilities*	18,952		27,169
		77,374		73,882

* For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans, corporation and 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 - 2014	P,P&E and  software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	1,298	1,580	11,379	53,265	(24,947)
	UK	1,718	1,628	5,090	102,471	(80,224)
	Europe	225	678	1,109	24,496	(17,503)
	Other International	69	65	155	5,741	(4,877)
	Unallocated corporate assets and liabilities*	-	-	8,216	46,538	(27,586)
		3,310	3,951	25,949	232,511	(155,137)
1.	Segmental information (continued)
v)	Other information - 2013	P,P&E and software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	623	1,821	11,766	49,077	(22,148)
	UK	1,470	1,733	5,171	96,075	(84,766)
	Europe	268	408	1,680	23,883	(15,784)
	Other International	86	62	200	3,482	(3,106)
	Unallocated corporate assets and liabilities*	-	-	8,998	41,018	(13,849)
		2,447	4,024	27,815	213,535	(139,653)

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

		2014	2013
		£'000	£'000
vi)	Revenue by business grouping:
	Robert Walters	463,685	454,375
	Resource Solutions (recruitment process outsourcing)	215,919	143,344
		679,604	597,719

2.	Finance costs
		2014	2013
		£'000	£'000
	Interest on bank overdrafts	443	771
	Interest on bank loans	21	26
	Total borrowing costs	464	797

3.	Taxation
		2014	2013
		£'000	£'000
	Current tax charge
	Corporation tax - UK	622	-
	Corporation tax - Overseas	5,327	4,387
	Adjustments in respect of prior years
	Corporation tax - UK	102	-
	Corporation tax - Overseas	494	99
		6,545	4,486
	Deferred tax
	Deferred tax - UK	984	701
	Deferred tax - Overseas	(573)	(1,315)
	Adjustments in respect of prior years
	Deferred tax - UK	(277)	44
	Deferred tax - Overseas	225	(1)
		359	(571)
	Total tax charge for year	6,904	3,915
	Profit before taxation	18,159	10,071
	Tax at standard UK corporation tax rate of 21.5% (2013: 23.25%)	3,904	2,341
	Effects of:
	Unrelieved (relieved) losses	853	(54)
	Other expenses not deductible for tax purposes	118	114
	Overseas earnings taxed at different rates	1,340	1,067
	Adjustments to tax charges in previous years	544	141
	Impact of tax rate change	145	306
	Total tax charge for year	6,904	3,915

4.	Dividends
		2014	2013
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Interim dividend paid of 1.65p per share (2013: 1.54p)	1,267	1,116
	Final dividend for 2013 of 3.86p per share (2012: 3.68p)	2,820	2,710
		4,087	3,826
	Proposed final dividend for 2014 of 4.35p per share  (2013: 3.86p)	3,179	2,843
	The proposed final dividend of £3,179,000 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 12 June 2015 to those shareholders on the register as at 22 May 2015.
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.
		2014	2013
		£'000	£'000
	Profit for the year attributable to equity holders of the parent	11,255	6,156
		2014	2013
		Number of shares	Number of shares
	Weighted average number of shares:
	Shares in issue throughout the year	85,886,614	85,570,741
	Shares issued in the year	59,929	107,243
	Treasury and own shares held	(12,161,441)	(12,682,876)
	For basic earnings per share	73,785,102	72,995,108
	Outstanding share options	7,017,561	7,206,147
	For diluted earnings per share	80,802,663	80,201,255

6.	Intangible assets
		Goodwill	Computer software	Total
		£'000	£'000	£'000
	Cost:
	At 1 January 2013	7,919	7,420	15,339
	Additions	-	1,096	1,096
	Disposals	-	(428)	(428)
	Foreign currency translation differences	49	(231)	(182)
	At 31 December 2013	7,968	7,857	15,825
	Additions	-	1,016	1,016
	Disposals	-	(664)	(664)
	Foreign currency translation differences	16	(18)	(2)
	At 31 December 2014	7,984	8,191	16,175
	Accumulated amortisation and impairment:
	At 1 January 2013	-	5,862	5,862
	Charge for the year	-	815	815
	Disposals	-	(210)	(210)
	Foreign currency translation differences	-	(159)	(159)
	At 31 December 2013	-	6,308	6,308
	Charge for the year	-	749	749
	Disposals	-	(440)	(440)
	Foreign currency translation differences	-	(19)	(19)
	At 31 December 2014	-	6,598	6,598
	Carrying value:
	At 1 January 2013	7,919	1,558	9,477
	At 31 December 2013	7,968	1,549	9,517
	At 31 December 2014	7,984	1,593	9,577

The carrying value of goodwill primarily relates to the acquisition of Talent Spotter in China (£1,101,000) 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 in perpetuity. The key assumptions in the value in use are those regarding expected changes to cash flow during the period, growth rates and the discount rates.

Estimated cash flow forecasts are derived from the most recent financial budgets and an assumed average growth rate of 6% 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 approved by the Board reflect the latest industry forecasts and management expectations based on past experience.

The value of the cash flows is then discounted at a post-tax rate of 6.6% (pre-tax rate of 10.7%), based on the Group's estimated weighted average cost of capital and risk adjusted depending on the location of goodwill. The forecast cash flow analysis has also been adjusted for a terminal growth rate, between 2-4% depending on location, for year six onwards.

Management has undertaken sensitivity analysis taking into consideration the impact in key assumptions. This included reducing the cash flow growth from Year two onwards by 0%, 10% and 20% in absolute terms. The sensitivity analysis shows no impairment would arise under each scenario.

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 2013	6,535	10,731	5,923	85	23,274
	Additions	171	444	720	16	1,351
	Disposals	(33)	(412)	(499)	(50)	(994)
	Foreign currency translation differences	(286)	(781)	(359)	(5)	(1,431)
	At 31 December 2013	6,387	9,982	5,785	46	22,200
	Additions	727	671	888	8	2,294
	Disposals	(319)	(275)	(867)	(34)	(1,495)
	Foreign currency translation differences	11	(258)	(58)	(2)	(307)
	At 31 December 2014	6,806	10,120	5,748	18	22,692
	Accumulated depreciation and impairment:
	At 1 January 2013	2,544	4,733	4,045	56	11,378
	Charge for the year	826	1,160	1,194	29	3,209
	Disposals	18	(329)	(473)	(50)	(834)
	Foreign currency translation differences	(198)	(377)	(273)	(5)	(853)
	At 31 December 2013	3,190	5,187	4,493	30	12,900
	Charge for the year	834	1,392	965	11	3,202
	Disposals	(311)	(186)	(843)	(29)	(1,369)
	Foreign currency translation differences	(6)	(143)	(46)	(2)	(197)
	At 31 December 2014	3,707	6,250	4,569	10	14,536
	Carrying value:
	At 1 January 2013	3,991	5,998	1,878	29	11,896
	At 31 December 2013	3,197	4,795	1,292	16	9,300
	At 31 December 2014	3,099	3,870	1,179	8	8,156

8.	Trade and other receivables
		2014	2013
		£'000	£'000
	Receivables due within one year:
	Trade receivables	122,735	117,127
	Other receivables	4,295	3,337
	Prepayments and accrued income	41,210	33,236
		168,240	153,700

Included within prepayments and accrued income is a provision against the cancellation of placements where a candidate may reverse their acceptance prior to the start date.

The value of this provision as of 31 December 2014 is £1,411,000 (31 December 2013: £1,115,000). The movement in the provision during the year is a charge to administrative expenses in the income statement of £296,000 (2013: £60,000).

As at 31 December 2014, in the UK, invoices aggregating £4.2m were sold under a non-recourse factoring arrangement, incurring charges of £0.1m.

9.	Trade payables and other payables: amounts falling due within one year
		2014	2013
		£'000	£'000
	Trade payables	5,514	3,794
	Other taxation and social security	19,543	20,393
	Other payables	19,199	20,404
	Accruals and deferred income	81,271	79,558
		125,527	124,149

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
		2014	2013
		£'000	£'000
	Bank overdrafts and loans: current	23,904	11,496
		23,904	11,496
	The borrowings are repayable as follows:
	Within one year	23,904	11,496
		23,904	11,496

In January 2014, the Group renewed and extended its three-year committed financing facility to £35.0m which expires in November 2016. At 31 December 2014, £23.4m (2013: £11.0m) was drawn down under this facility.

The Group has a short-term facility of Renminbi 10m (£1.0m) of which Renminbi 5m (£0.5m) remains outstanding as at 31 December 2014. The loan is secured against cash deposits in Hong Kong.

The Directors estimate that the fair value of all borrowings is not materially different from the amounts stated in the Consolidated Balance Sheet of £23,904,000 (2013: £11,496,000).

11.	Notes to the cash flow statement
		2014	2013
		£'000	£'000
	Operating profit	18,220	10,834
	Adjustments for:
	Depreciation and amortisation charges	3,951	4,024
	Loss on disposal of property, plant and equipment and computer software	350	378
	Charge in respect of share-based payment transactions	1,708	3,855
	Operating cash flows before movements in working capital	24,229	19,091
	Increase in receivables	(16,097)	(33,151)
	Increase in payables	3,138	33,300
	Cash generated from operating activities	11,270	19,240

12.	Reconciliation of net cash flow to movement in net funds
		2014	2013
		£'000	£'000
	Increase in cash and cash equivalents in the year	8,662	6,284
	Cash (outflow) inflow from movement in bank loans	(12,381)	3,061
	Foreign currency translation differences	(555)	(2,242)
	Movement in net cash in the year	(4,274)	7,103
	Net cash at beginning of year	18,575	11,472
	Net cash at end of year	14,301	18,575

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

 

END

 

 

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