Results for the year ended 31 December 2013

RNS Number : 3201B

Robert Walters PLC

03 March 2014

 



3 March 2014

ROBERT WALTERS PLC

(the 'Company' or the 'Group')

Results for the year ended 31 December 2013

30% INCREASE IN PROFIT

Robert Walters plc (LSE: RWA), the international specialist professional recruitment consultancy, today announces its results for the year ended 31 December 2013.

Financial and Operational Highlights

Year ended	2013	2012	% change	%  change (constant currency*)
Revenue	£597.7m	£567.8m	+5%	+7%
Gross profit (net fee income)	£199.2m	£188.4m	+6%	+8%
Operating profit	£10.8m	£8.5m	+28%	+39%
Profit before taxation	£10.1m	£7.7m	+30%	+41%
Basic earnings per share	8.4p	6.8p	+24%
Total dividend per share	5.4p	5.15p	+5%
Net cash	£18.6m	£11.5m	+62%

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

·      Strong performance in 2013, increasing profit before taxation by 30% (41%*) against a backdrop of mixed global market conditions.

·      Net fee income growth in constant currency across all regions.

·      Healthy balance of permanent (69%) and contract (31%) recruitment net fee income (2012: 69%:31%).

·      UK

o  Regional business and Resource Solutions the standout performers.

o  Activity levels in financial services in London were more muted however we continue to successfully develop our offering in disciplines such as IT, legal, supply chain and procurement.

·      Asia Pacific

o  Record performance in Japan driven by the internationalisation of business and the demand for bilingual professionals, offset by challenging market conditions in Australia.

·      Europe

o  Robust performance in France and Benelux, with our contract business in particular producing strong net fee income growth.  New office opened in Ghent.

·      Other International (USA, Brazil, South Africa and the Middle East)

o  Strong growth across our South Africa and US businesses. New office opened in Dubai, the Group's first in the Middle East region.

·      Group headcount increased to 2,307 as at 31 December 2013 (31 December 2012: 2,233).

·      Group is now stronger and more diverse than ever - by geography, discipline and sector.

Robert Walters, Chief Executive, said:

"We delivered a strong performance in 2013, increasing profit by 30% (41% in constant currency), highlighting the strength of our diverse business model and international brand.

 "Trading for the first two months of 2014 has been encouraging. Whilst we are seeing definite signs of recovery in some of our markets, others including major markets such as Australia and France remain challenging. The Group is well positioned to continue to deliver enhanced profitability in line with current market expectations."

The Group will publish an Interim Management Statement for the first quarter ended 31 March 2014 on 7 April 2014.

For further information please contact:

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

About Robert Walters

Robert Walters is a market-leading international specialist professional recruitment consultancy with 53 offices 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 2013

Chairman's Statement

I am very pleased to report that the Group delivered a strong performance in 2013, increasing profit before taxation by 30% (41%*) against a backdrop of mixed global market conditions.

Revenue was up 5% (7%*) to £597.7m (2012: £567.8m) and gross profit (net fee income) increased by 6% (8%*) to £199.2m (2012: £188.4m). Operating profit was up 28% (39%*) to £10.8m (2012: £8.5m) and earnings per share increased by 24% to 8.4p per share (2012: 6.8p per share). The Group has further strengthened its balance sheet and has a net cash position of £18.6m as at 31 December 2013 (31 December 2012: £11.5m).

Group headcount currently stands at 2,307 (2012: 2,233).  Our strategy of maintaining our office network whilst selectively investing in new markets, discipline diversification and Resource Solutions has ensured we are already benefitting from operational gearing as some of the Group's markets have begun to recover.

The Group now has 53 offices in 24 countries, having opened 17 offices over the last four years. During the year we have focused on maximising the return from this investment and as a result, the Group achieved an increase in productivity of 9% which we expect to continue to improve in the current year.

In line with our progressive dividend policy, the Board will be recommending a 5% increase in the final dividend to 3.86p per share which combined with the interim dividend of 1.54p per share will result in a total dividend of 5.4p per share (2012: 5.15p).

I would like to thank Martin Griffiths, who retired from the Board earlier this year for his seven years of service and extend a warm welcome to Brian McArthur-Muscroft who joined the Board in May.  

Finally, I would like to thank all our staff across the globe for their efforts this year. Your hard work has once again underpinned the success of the business and also resulted in us being named International Recruitment Firm of the Year by Recruitment International.

Leslie Van de Walle

Chairman

28 February 2014

Chief Executive's Statement

Overall conditions for the period were mixed with some of the Group's markets showing clear signs of recovery, whilst others remained challenging.

The last five years have been extremely tough for the recruitment industry but as demonstrated by this set of results, the Group continues to increase market share and has emerged from this period stronger than ever.

The Group benefits from a diverse geographical, discipline and sector business model and a well-respected international brand.  We have built a well-balanced blend of permanent and contract recruitment income streams and have successfully expanded our sector coverage beyond our traditional strength in financial services. In Resource Solutions, we have also created a market-leading and growing recruitment process outsourcing business.

We continue to be at the forefront of technology. Through our digital assets including our multiple market-leading mobile apps and our new multi-lingual mobile website we continue to innovate to deliver value to our clients and candidates. In addition, internally, we have successfully completed the global roll out of a streamlined front office recruitment database.

Review of Operations

Asia Pacific (46% of net fee income)

Revenue was £260.1m (2012: £280.6m) and net fee income decreased 1% (4% increase*) to £92.1m (£97.4m*) (2012: £93.4m) delivering an operating profit increase of 1% (11%*) to £7.2m (£8.0m*) (2012: £7.2m).

Our market-leading business in Japan delivered a record performance with the internationalisation of business driving strong demand for bilingual professionals. Our operation in Malaysia goes from strength to strength and is a market leader in what is a rapidly developing recruitment market where we have a clear first mover advantage.  Market conditions in Singapore, Hong Kong and China remain positive. It's also pleasing to report strong net fee income growth in our newer and smaller businesses in Taiwan, Thailand, South Korea, Indonesia and Vietnam.

Market conditions in Australia, the region's largest market, remain challenging with the resources sector affecting confidence levels across the wider economy. Our Brisbane and Perth offices were hardest hit; however, our offices in New South Wales, Victoria and South Australia were impacted to a lesser degree. We have already taken steps to realign the business accordingly reducing headcount by 18%.

Our investment in setting up Resource Solutions in Asia continues to deliver net fee income growth, with a number of new client wins during the period.

UK (29% of net fee income)

Revenue was £235.7m (2012: £193.2m) and net fee income increased by 15% to £57.2m (2012: £49.7m) producing a six-fold increase in operating profit to £2.5m (2012: £0.4m).

In London, financial services hiring activity remained generally muted; however we continue to successfully diversify and develop our offering in areas such as legal, IT and most recently supply chain and procurement. Our regional recruitment businesses - Manchester, Birmingham, Milton Keynes and Guildford - produced a particularly strong performance across all recruitment disciplines.

Resource Solutions in the UK had an excellent year both winning new clients and retaining existing business across both commerce and financial services.

Europe (21% of net fee income)

Revenue was £93.9m (2012: £87.8m) and net fee income increased 6% (2%*) to £42.0m (£40.2m*) (2012: £39.6m) producing an increase in operating profit to £1.3m (£1.2m*) (2012: £1.2m)

France, the region's largest business, produced a robust performance, growing market share in a country where market conditions have arguably been toughest. Net fee income growth rates were strongest across the Group's Benelux operations, with Walters People, our junior clerical recruitment business in particular the stand-out performer. In Germany, we continue to grow net fee income strongly and we are seeing encouraging signs from our business in Spain. 

Other International (4% of net fee income)

Revenue was £8.0m (2012: £6.1m) and net fee income increased by 38% (44%*) to £7.9m (£8.3m*)  (2012: £5.7m) producing an operating loss of £0.2m (operating loss of £0.3m*) (2012: operating loss of £0.4m).

Other International comprises South Africa, the US, Brazil and the Middle East. Our business in South Africa had an excellent year growing net fee income strongly. Improving confidence in the US has helped boost activity levels in our New York office and the technology boom in San Francisco shows no signs of abating.  In Brazil, market conditions remain difficult but our Sao Paulo and Rio de Janeiro operations have delivered solid net fee income growth. The Group opened a new office in Dubai, our first in the Middle East region.

Current Trading and Outlook

Trading for the first two months of 2014 has been encouraging. Whilst we are seeing definite signs of recovery in some of our markets, others including major markets such as Australia and France remain challenging. The Group is well positioned to continue to deliver enhanced profitability in line with current market expectations.

Robert Walters

Chief Executive

28 February 2014

Consolidated Income Statement

FOR THE YEAR ENDED 31 DECEMBER 2013

	2013	2012
	£'000	£'000
Revenue	597,719	567,771
Cost of sales	(398,525)	(379,380)
Gross profit	199,194	188,391
Administrative expenses	(188,360)	(179,922)
Operating profit	10,834	8,469
Finance income	121	134
Finance costs	(797)	(788)
Loss on foreign exchange	(87)	(90)
Profit before taxation	10,071	7,725
Taxation	(3,915)	(2,838)
Profit for the year	6,156	4,887
Attributable to:
Owners of the Company	6,156	4,860
Non-controlling interest	-	27
	6,156	4,887
Earnings per share (pence):
Basic	8.4	6.8
Diluted	7.7	6.2

The amounts above relate to continuing operations.

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 DECEMBER 2013

	2013	2012
	£'000	£'000
Profit for the year	6,156	4,887
Exchange differences on translation of overseas operations	(5,164)	(2,497)
Total comprehensive income and expense for the year	992	2,390
Attributable to:
Owners of the Company	992	2,363
Non-controlling interest	-	27
	992	2,390

Consolidated Balance Sheet

AS AT 31 DECEMBER 2013

	2013	2012
	£'000	£'000
Non-current assets
Intangible assets	9,517	9,477
Property, plant and equipment	9,300	11,896
Deferred tax assets	8,998	8,033
	27,815	29,406
Current assets
Trade and other receivables	153,700	125,703
Corporation tax receivables	1,949	2,161
Cash and cash equivalents	30,071	26,022
	185,720	153,886
Total assets	213,535	183,292
Current liabilities
Trade and other payables	(124,149)	(94,991)
Corporation tax liabilities	(2,314)	(947)
Bank overdrafts and loans	(11,496)	(14,550)
Provisions	(606)	(464)
	(138,565)	(110,952)
Net current assets	47,155	42,934
Non-current liabilities
Deferred tax liabilities	(39)	(39)
Provisions	(1,049)	(783)
	(1,088)	(822)
Total liabilities	(139,653)	(111,774)
Net assets	73,882	71,518
Equity
Share capital	17,177	17,114
Share premium	21,753	21,249
Other reserves	(73,410)	(73,410)
Own shares held	(5,876)	(9,121)
Treasury shares held	(19,860)	(19,860)
Foreign exchange reserves	3,985	9,149
Retained earnings	130,113	126,397
Equity attributable to owners of the Company	73,882	71,518

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 DECEMBER 2013

	2013	2012
	£'000	£'000
Cash generated from operating activities	19,240	11,330
Income taxes paid	(2,798)	(6,352)
Net cash from operating activities	16,442	4,978
Investing activities
Interest received	121	134
Purchases of computer software	(1,096)	(1,060)
Purchases of property, plant and equipment	(1,351)	(3,931)
Purchase of non-controlling interest	(715)	(712)
Net cash used in investing activities	(3,041)	(5,569)
Financing activities
Equity dividends paid	(3,826)	(3,684)
Proceeds from issue of equity	567	3
Interest paid	(797)	(788)
Proceeds from bank loans and overdrafts	-	3,885
Repayment of bank loans	(3,061)	(1,184)
Net cash used in financing activities	(7,117)	(1,768)
Net increase (decrease) in cash and cash equivalents	6,284	(2,359)
Cash and cash equivalents at beginning of year	26,022	28,965
Effect of foreign exchange rate changes	(2,235)	(584)
Cash and cash equivalents at end of year	30,071	26,022

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 31 DECEMBER 2013

	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 2012	17,113	21,247	(73,410)	(12,028)	(19,860)	11,646	125,534	70,242	505	70,747
Profit for the year	-	-	-	-	-	-	4,860	4,860	27	4,887
Foreign currency translation differences	-	-	-	-	-	(2,497)	-	(2,497)	-	(2,497)
Total comprehensive income and expense for the year	-	-	-	-	-	(2,497)	4,860	2,363	27	2,390
Dividends paid	-	-	-	-	-	-	(3,684)	(3,684)	-	(3,684)
Acquisition of non-controlling interest	-	-	-	-	-	-	(1,809)	(1,809)	(532)	(2,341)
Credit to equity for equity-settled share-based payments	-	-	-	-	-	-	4,455	4,455	-	4,455
Deferred tax on share-based payment transactions	-	-	-	-	-	-	(52)	(52)	-	(52)
Transfer to own shares held on exercise of equity incentives	-	-	-	2,907	-	-	(2,907)	-	-	-
New shares issued	1	2	-	-	-	-	-	3	-	3
Balance at 31 December 2012	17,114	21,249	(73,410)	(9,121)	(19,860)	9,149	126,397	71,518	-	71,518
Profit for the year	-	-	-	-	-	-	6,156	6,156	-	6,156
Foreign currency translation differences	-	-	-	-	-	(5,164)	-	(5,164)	-	(5,164)
Total comprehensive income and expense for the year	-	-	-	-	-	(5,164)	6,156	992	-	992
Dividends paid	-	-	-	-	-	-	(3,826)	(3,826)	-	(3,826)
Acquisition of non-controlling interest	-	-	-	-	-	-	-	-	-	-
Credit to equity for equity-settled share-based payments	-	-	-	-	-	-	3,855	3,855	-	3,855
Deferred tax on share-based payment transactions	-	-	-	-	-	-	776	776	-	776
Transfer to own shares held on exercise of equity incentives	-	-	-	3,245	-	-	(3,245)	-	-	-
New shares issued	63	504	-	-	-	-	-	567	-	567
Balance at 31 December 2013	17,177	21,753	(73,410)	(5,876)	(19,860)	3,985	130,113	73,882	-	73,882

Statement of Accounting Policies

FOR THE YEAR ENDED 31 DECEMBER 2013

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 2013 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 £18.6m at 31 December 2013. 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 28 February 2014, does not constitute the Company's statutory accounts for the year ended 31 December 2013 but is derived from these accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 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 23 May 2014 at 11 Slingsby Place, St Martin's Courtyard, London WC2E 9AB.

1.	Segmental information
		2013	2012
		£'000	£'000
i)	Revenue:
	Asia Pacific	260,145	280,628
	UK	235,734	193,247
	Europe	93,855	87,787
	Other International	7,985	6,109
		597,719	567,771
ii)	Gross profit:
	Asia Pacific	92,069	93,353
	UK	57,161	49,737
	Europe	42,036	39,557
	Other International	7,928	5,744
		199,194	188,391

1.	Segmental information (continued)
			2013		2012
			£'000		£'000
iii)	Profit before taxation:
	Asia Pacific		7,242		7,178
	UK		2,540		444
	Europe		1,258		1,213
	Other International		(206)		(366)
	Operating profit		10,834		8,469
	Net finance costs		(763)		(744)
	Profit before taxation		10,071		7,725
iv)	Net assets:
	Asia Pacific	26,929		30,258
	UK	11,309		13,007
	Europe	8,099		6,894
	Other International	376		679
	Unallocated corporate assets and liabilities*	27,169		20,680
		73,882		71,518

* 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 - 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)
1.	Segmental information (continued)
v)	Other information - 2012	P,P&E and software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	2,339	1,874	13,617	53,521	(23,263)
	UK	1,644	1,548	5,734	68,879	(55,871)
	Europe	964	327	1,814	20,941	(14,048)
	Other International	84	62	208	3,735	(3,056)
	Unallocated corporate assets and liabilities*	-	-	8,033	36,216	(15,536)
		5,031	3,811	29,406	183,292	(111,774)

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

		2013	2012
		£'000	£'000
vi)	Revenue by business grouping:
	Robert Walters	454,375	467,567
	Resource Solutions (recruitment process outsourcing)	143,344	100,204
		597,719	567,771

2.	Finance costs
		2013	2012
		£'000	£'000
	Interest on bank overdrafts	771	700
	Interest on bank loans	26	88
	Total borrowing costs	797	788

3.	Taxation
		2013	2012
		£'000	£'000
	Current tax charge
	Corporation tax - Overseas	4,387	4,052
	Adjustments in respect of prior years
	Corporation tax - UK	-	32
	Corporation tax - Overseas	99	100
		4,486	4,184
	Deferred tax
	Deferred tax - UK	701	(445)
	Deferred tax - Overseas	(1,315)	(607)
	Adjustments in respect of prior years
	Deferred tax - UK	44	118
	Deferred tax - Overseas	(1)	(412)
		(571)	(1,346)
	Total tax charge for year	3,915	2,838
	Profit before taxation	10,071	7,725
	Tax at standard UK corporation tax rate of 23.25% (2012: 24.5%)	2,341	1,893
	Effects of:
	Unrelieved losses	(54)	62
	Other expenses not deductible for tax purposes	114	124
	Overseas earnings taxed at different rates	1,067	665
	Adjustments to tax charges in previous years	141	(162)
	Impact of tax rate change	306	256
	Total tax charge for year	3,915	2,838

4.	Dividends
		2013	2012
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Interim dividend paid of 1.54p per share (2012: 1.47p)	1,116	1,052
	Final dividend for 2012 of 3.68p per share (2011: 3.68p)	2,710	2,632
		3,826	3,684
	Proposed final dividend for 2013 of 3.86p per share  (2012: 3.68p)	2,843	2,632
	The proposed final dividend of £2,843,000 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 13 June 2014 to those shareholders on the register as at 23 May 2014.
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.
		2013	2012
		£'000	£'000
	Profit for the year attributable to equity holders of the parent	6,156	4,860
		2013	2012
		Number of shares	Number of shares
	Weighted average number of shares:
	Shares in issue throughout the year	85,570,741	85,568,121
	Shares issued in the year	107,243	230
	Treasury and own shares held	(12,682,876)	(14,357,336)
	For basic earnings per share	72,995,108	71,211,015
	Outstanding share options	7,206,147	7,522,863
	For diluted earnings per share	80,201,255	78,733,878

6.	Intangible assets
		Goodwill	Computer software	Total
		£'000	£'000	£'000
	Cost:
	At 1 January 2012	7,942	7,331	15,273
	Additions	40	1,060	1,100
	Disposals	-	(923)	(923)
	Foreign currency translation differences	(63)	(48)	(111)
	At 31 December 2012	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
	Accumulated amortisation and impairment:
	At 1 January 2012	-	5,981	5,981
	Charge for the year	-	773	773
	Disposals	-	(840)	(840)
	Foreign currency translation differences	-	(52)	(52)
	At 31 December 2012	-	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
	Carrying value:
	At 1 January 2012	7,942	1,350	9,292
	At 31 December 2012	7,919	1,558	9,477
	At 31 December 2013	7,968	1,549	9,517

The carrying value of goodwill primarily relates to the acquisition of Talent Spotter in China (£1,081,000) 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 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 approved by the Board reflect the latest industry forecasts and management expectations based on the past experience.

The value of the cash flows is then discounted at a post-tax rate of 6.7% (pre-tax rate of 10.9%), based on the Group's estimated weighted average cost of capital and risk adjusted depending on the location of goodwill. The weighted average cost of capital 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 2 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 2012	6,028	10,270	6,634	81	23,013
	Additions	991	2,074	856	10	3,931
	Disposals	(276)	(1,344)	(1,412)	-	(3,032)
	Foreign currency translation differences	(208)	(269)	(155)	(6)	(638)
	At 31 December 2012	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
	Accumulated depreciation and impairment:
	At 1 January 2012	2,155	4,885	4,366	43	11,449
	Charge for the year	806	1,044	1,172	16	3,038
	Disposals	(266)	(1,069)	(1,385)	-	(2,720)
	Foreign currency translation differences	(151)	(127)	(108)	(3)	(389)
	At 31 December 2012	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 2012	3,190	5,187	4,493	30	12,900
	Carrying value:
	At 1 January 2012	3,873	5,385	2,268	38	11,564
	At 31 December 2012	3,991	5,998	1,878	29	11,896
	At 31 December 2013	3,197	4,795	1,292	16	9,300

8.	Trade and other receivables
		2013	2012
		£'000	£'000
	Receivables due within one year:
	Trade receivables	117,127	100,749
	Other receivables	3,337	3,874
	Prepayments and accrued income	33,236	21,080
		153,700	125,703

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 2013 is £1,115,000 (31 December 2012: £1,055,000). The movement in the provision during the year is a charge to administrative expenses in the income statement of £60,000 (2012: £31,000).

9.	Trade and other payables: amounts falling due within one year
		2013	2012
		£'000	£'000
	Trade payables	3,794	4,427
	Other taxation and social security	20,393	17,656
	Other payables	20,404	23,502
	Accruals and deferred income	79,558	49,406
		124,149	94,991

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
		2013	2012
		£'000	£'000
	Bank overdrafts and loans: current	11,496	14,550
		11,496	14,550
	The borrowings are repayable as follows:
	Within one year	11,496	14,550
		11,496	14,550

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 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 2013.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 £11,496,000 (2012: £14,550,000).

11.	Notes to the cash flow statement
		2013	2012
		£'000	£'000
	Operating profit	10,834	8,469
	Adjustments for:
	Depreciation and amortisation charges	4,024	3,811
	Loss on disposal of property, plant and equipment and computer software	378	394
	Charge in respect of share-based payment transactions	3,855	4,455
	Operating cash flows before movements in working capital	19,091	17,129
	Increase in receivables	(33,151)	(10,533)
	Increase in payables	33,300	4,734
	Cash generated from operating activities	19,240	11,330

12.	Reconciliation of net cash flow to movement in net funds
		2013	2012
		£'000	£'000
	Decrease in cash and cash equivalents in the year	6,284	(2,359)
	Cash inflow from movement in bank loans	3,061	(2,705)
	Foreign currency translation differences	(2,242)	(525)
	Movement in net cash in the year	7,103	(5,589)
	Net cash at beginning of year	11,472	17,061
	Net cash at end of year	18,575	11,472

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

 

END

 

 

FR UOSNRSVAORRR