Final Results

RNS Number : 5696E
Prime People PLC
01 June 2012
 



 

 

31 May 2012

 

Prime People Plc

Results for the year ended 31 March 2012

 

Prime People Plc ("Prime People" or the "Group"), the global specialist recruitment business for professional and technical staff working in the Real Estate & Built Environment, Energy & Environmental, Insight & Analytics and Pharmaceutical sectors, today announces its results for the year ended 31 March 2012.

 

 

Highlights:

 


Year ended

31 March

2012

Year ended

31 March

2011

 

Change

%

Net fee income

£8.03m

£8.04m

0%

Profit before tax

£0.93m

£1.01m

-7.9%

Profit after tax

£0.68m

£0.7m

-2.9%

Fully diluted earnings per share

5.58p

5.65p

-1.2%

Total dividend for the year

4.09p

4.00p

+2.2%

 

Peter Moore Managing Director of Prime People, said:

 

"We closed 2012 broadly in line with last year and have maintained a strong cash position and a final dividend of 2.25p. Whilst the economic and political uncertainties in Europe and the Middle East remain, we still continue to invest appropriately in our established revenue lines and offices.

Our Far East and South East Asia plans are advancing and these regions are expected to make an increasingly important contribution to continuing profitability and offers exposure to regions with significant percentage growth."

 

 

-Ends-

For further information please contact:

Prime People

020 73181785

Robert Macdonald, Executive Chairman

Peter Moore, Managing Director


Chris Heayberd, Finance Director






Cenkos Securities

020 73978900

Ivonne Cantu


Julian Morse (Sales/Broking)


 

 

 

 

 



Chairman's Statement & Operating Review

 



Introduction

The Group's activity is the delivery of permanent and temporary recruitment services. Historically, the Group's focus has been to provide these services to the built environment sector through its main subsidiary Macdonald & Company. More recently the Group has broadened its focus to include provision of recruitment services for customer insight staff in the market research and data analysis sector, branded as Prime Insight, to the energy & environmental sector as Macdonald & Company and the pharmaceutical research sector as Prime Pharma.

 

Results

In 2012 gross revenue reduced to £12.65m reflecting the lower level of temporary business (2011: £13.95m). 

 

Net fee income, which is, after profit, the most important measure of performance for the Group, was in line with the previous year at £8.03m (2011: £8.04m).

 

Whilst Group net fee income at the half year was 8% ahead of the same period in the prior year, our second half saw increased rather than diminished economic uncertainty affecting both the UK and Middle East activity for our businesses resulting in a 12% fall in net fee income in the full year from £7.06m to £6.2m from those regions. By way of contrast, as the segment analysis in Note 2 shows, our Asia business continues to prosper and we are pleased to report an 80% increase in net fee income from £1m to £1.8m. Overseas revenue has increased year on year and the Group generated 33% of its net fee income outside the UK, compared to the 29% achieved in 2011.

 

The ratio of net fee income derived from permanent as against temporary placements continues to rise from 88:12 in 2011 to 91:9 in the year being reported.

 

During the year, we continued to increase our permanent consultant headcount within certain of our established areas of activity and, as referred to above, we have broadened our business into new end markets. The larger part of the overall headcount increase has been recruited to work in our Asia operations.  

 

Productivity from our investment in people made in the year has been slower to achieve than expected, resulting in an 8% decrease in operating profit for the full year from £1.01m to £0.93m.

 

The conversion rate of operating profit from net fee income decreased from 12.5% in 2011 to 11.6% in 2012.

 

Basic earnings per share decreased slightly to 5.72p (2011: 5.86p).

 

The Group maintained a strong net cash position with £2.8m as at 31 March 2012 (2011: £3.03m).

 

Cash & Dividends

The Company continues to hold a substantial cash balance. The Board is continually assessing the most appropriate use of surplus cash generated by the Company. Historically this has focussed on developing new business lines organically and more recently on a program of share buyback. Possible acquisitions have been investigated every year but as yet, none has met the Company's stringent criteria, which include ensuring that scale of transaction should not have the potential to destabilise our continuing businesses and risk associated with acquisition should be minimal. The Board considers that cash needed to complete current growth plans is more than adequate. Accordingly, subject to trading conditions, the Company expects to continue to return cash to shareholders via its annual dividends and by other means when and if appropriate .

 

The Board will be recommending a final dividend of 2.25p (2011: 2.25p) per share which combined with the interim dividend of 1.84p per share, will result in a total dividend of 4.09p (2011: 4.00p).

 

 



Chairman's Statement & Operating Review (continued)

 

Share Buy Back

During the year 248,234 shares at a cost of £167,809 (2011: 55,000 shares at a cost of £30,375) were purchased through the Group's buyback 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 26 June 2012.

 

Strategy & Outlook

Since this time last year, we have continued to advance our overseas strategy by seeking to extend our reach in Asia. To this end the Company has committed to the establishment of an office in Singapore with a senior manager and first hires in place at the date of this report.

 

The political and economic background to our UK and European activity has become more rather than less uncertain and visibility has become further clouded. However, the Group has strong client relationships and a committed staff ready to exploit regional opportunities and the upturn when it occurs.

 

Whilst the economic uncertainties in Europe and the Middle East remain, we will still continue to invest appropriately in our established revenue lines and offices, to grow overseas activity and to look for opportunities to broaden the recruitment services the Group offers within all our regions.

 

Our Far East and South East Asia plans are advancing and these regions are expected to make an increasingly important contribution to continuing profitability.

 

Our people

Finally, I should like to thank our staff for their hard work and commitment over the last twelve months. 

 

 

 

Robert Macdonald

Executive Chairman

31 May 2012




Financial Review

 

Trading results

Gross fee income for the year from continuing operations decreased by 9.3% to £12.65m (2011: £13.95m).

 

Net fee income decreased by 0.01% to £8.03m (2011: £8.04m).

 

The group considers net fee income to be a key indicator of the performance of the business. This is defined as the income generated from permanent placements together with the contribution earned from contract and temporary staff.

 

Administrative costs totalled £7.1m which represents 88% of net fee income (2011: £7.03m: 87%).  Profit before tax decreased by 7 per cent to £0.95m (2011: £1.01m).

 

The taxation charge is £0.27m on a profit on ordinary activities before taxation of £0.95m which gives an overall tax rate of 28.3% (2011: 31.8%). 

 

Earnings per share

Basic earnings per share decreased by 2% to 5.72pence (2011: 5.86pence).The diluted earnings per share decreased by 1% to 5.58pence (2011: 5.65pence).

 

Dividend

As outlined in the Chairman's statement & operating review, the Directors propose a final dividend of 2.25 pence which will, subject to shareholder approval at the Annual General Meeting, be paid on 29 June 2012 to shareholders who are on the register on 15 June 2012, making a total dividend paid to shareholders for the year of 4.09 pence per ordinary share.

 

Balance sheet

The Group's net assets position at 31 March 2012 is slightly up on last year at £13.89m (2011: £13.79m)

 

Trade receivables are slightly down on last year at £1.46m (2011:£1.72m) with a slight increase in the credit period taken by customers at 47 days (2011: 45 days).

 

Cash flow and cash position

Net cash inflow of £0.78m (2011: inflow of £1.58m) was generated from operating activities during the year, which after net taxation payments of £0.34m (2011: net taxation payment of £0.23m), resulted in a net cash inflow from operating activities of £0.44m (2011: inflow of £1.35m).

 

The group operates a centralised treasury function with a net cash position at 31 March 2012 of £2.82m, compared to a net cash position of £3.03m at 31 March 2011.

 

 

 

 

 

 

Chris Heayberd

Finance Director

31 May 2012


 

Condensed consolidated statement of comprehensive income

For the year ended 31 March 2012

 




Year ended


Note


31 March

2012

31 March 2011




£'000

£'000






Revenue

2


12,652

13,953

Cost of sales


 

 

(4,626)

(5,913)

 

Net fee income

 

2

 

 

 

8,026

 

8,040

Administrative expenses


 

 

(7,096)

(7,031)

 

Operating profit

 

2

 

 

 

930

 

1,009

 






Finance income



21

19

Finance expense


 

 

(3)

(7)

 

Profit before taxation


 

 

 

948

 

1,021






Income tax expense

3

 

 

(268)

(325)

 

Profit for the year

 

Other comprehensive loss

 

Foreign currency exchange differences


 

 

           

 

680

 

 

 

(9)

 

696

 

 

 

(55)

 

 

Total comprehensive income for the year



 

 

671

 

 

641

 






Attributable to:



 

 


Equity shareholders of the parent



671

641

 











Earnings per share

5




Basic earnings per share



5.72p

5.86p

Diluted



5.58p

5.65p





















 

The above results relate to continuing operations



Condensed consolidated statement of financial position

As at 31 March 2012

 



2012


2011



            £'000


            £'000






Assets





Non - current assets





    Goodwill


                  9,769


                    9,769

    Property, plant and equipment


                     195


                      258

    Deferred tax asset


                         2


                        26








                  9,966


                  10,053











Current assets


                          



    Trade and other receivables


                  2,920


                    2,956

    Cash at bank and in hand


2,831


                    3,104

 








                  5,751


                    6,060

 






Total assets

 


                15,717


                  16,113











Liabilities





Current liabilities





    Financial liabilities


                         7


                        56

    Trade and other payables


                  1,711


                    2,045

    Current tax liabilities

 


                     105


                      198






 

 


                  1,823


                    2,299






Non-current liabilities





    Financial liabilities - borrowings

 


                          -


                        21






Total liabilities

 


                  1,823


                    2,320






Net assets


                13,894


                  13,793

 






 



Condensed consolidated statement of financial position (continued)

As at 31 March 2012

 

 



2012

2011



Note

       £'000


£'000







Capital and reserves attributable to the

company's equity holders

Called up share capital



1,207


1,194

Capital redemption reserve fund



9


9

Treasury shares



(169)


(39)

Share premium account



7,109


7,095

Merger reserve



173


173

Share option reserve



81


108

Currency translation reserve



404


413

Retained earnings



5,080


4,840













Total equity



13,894


13,793

 







 



Condensed consolidated statement of changes in equity

For the year ended  31 March 2012

 


Called up

share capital

Capital

Redemp-

tion

reserve

Treasury

shares

Share

premium

account

Merger

reserve

Share

option

reserve

Foreign

currency

trans-

lation

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000











 

At 1 April 2010

 

       1,194

 

 

               9

 

              (9)

 

       7,095

 

       173

 

         77

 

          468

 

        4,525

 

13,532











Total comprehensive income for the year

 

 

                

                -

 

 

                

                -

 

 

 

                -

 

 

 

                -

 

 

 

            -

 

 

 

             -

 

 

 

           (55)

 

 

 

            696

 

 

            

       641











Adjustment in respect of share schemes

                

 

                -

 

 

                -

 

 

                -

 

 

                -

 

 

            -

 

 

          31

 

 

               -

 

 

                6

 

 

         37











Shares purchased for treasury

                

 

                -

                

 

                -

                

 

            (30)

                

 

                -                                              

             

 

            -

             

 

             -

                

 

               -

                 

 

                 -

            

 

        (30)











Dividend

 

                -

                -

                -

                -

            -

             -

               -

           (387)

      (387)

 

At 31 March 2011

 

 

 

       1,194

 

 

 

               9

 

 

           (39)

 

 

       7,095

 

 

       173

 

 

       108

 

 

          413

 

 

        4,840

 

 

13,793











Total comprehensive income for the year

 

 

 

                -

                

 

 

                -

 

 

 

                -

 

 

 

                -

 

 

 

            -

 

 

 

             -

 

 

 

             (9)

 

 

 

            680

 

 

 

       671











Issue of ordinary shares

 

             13

 

                -

 

                -

 

             14

 

            -

 

             -

                

               -

 

                 -

 

         27











Adjustment  in respect of share schemes

 

 

                -

 

 

                -

 

 

                -

 

 

                -

 

 

            -

 

 

         (27)

 

 

               -

 

 

              47

 

 

         20











Shares purchased for treasury

 

 

                -

 

 

                -

 

 

          (130)

 

 

                -

 

 

            -

 

 

             -

 

 

               -

 

 

                 -

 

 

      (130)











Dividend

 

                -

                -

                -

                -

            -

             -

               -

           (487)

      (487)











At 31 March 2012

 

 

       1,207

 

               9

 

         (169)

 

       7,109

 

       173

 

         81

 

          404

 

        5,080

 

13,894











 

 



 

 

Condensed consolidated cash flow statement

For the year ended 31 March 2012

 


Year ended

 



31 March

2012

31 March

2011

 


Note


£'000

£'000

 






 

Cash generated from underlying operations

 

6

 

 

 

              775

 

            1,577

 

Income tax paid



             (340)

              (229)

 

Income tax received


                  3

                  1

 





 

Net cash from/(used by) operating activities

 


 

              438

 

            1,349

 





 

Cash flows from investing activities




 

Interest received


                21

                 19

 

Net purchase of property, plant and equipment


 

               (60)

 

              (169)

 

   




 





 

Net cash (used in)/from investing activities


 

               (39)

 

              (150)

 





 

Cash flows from financing activities




 

Repayment of borrowings


                   -

              (280)

 

Capital element of hire purchase obligations


 

               (25)

 

                 25

 

Issue of ordinary share capital


                27

                   -

 

Treasury shares


             (130)

               (30)

 

Dividend paid to shareholders


             (487)

              (387)

 

Interest paid


                 (3)

                 (7)

 





 





 

Net cash used in financing activities


 

             (618)

 

              (679)

 





 





 

Net increase in cash and cash equivalents


                   

             (219)

 

               520

 





 

Cash and cash equivalents at beginning of the year


 

           3,052

 

            2,587

 

 

Exchange loss on cash and cash equivalents


 

 

                 (9)

 

 

               (55)

 





 

Cash and cash equivalents at the end of the year

 


 

 

           2,824

 

                   

            3,052

 








 

 

Notes to the financial statements

For the year ended 31 March 2011

 

 

1     Basis of preparation

 

Basis of preparation

 

The consolidated financial statements of the Prime People plc have been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union and also comply with IFRIC interpretations and Company Law applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities at fair value through the statement of comprehensive income.

 

The financial information in this preliminary announcement which comprises the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Financial Position, Condensed Consolidated Statement of Changes In Equity, Consolidated Cash Flow Statement and related notes is derived from the full Group financial statements for the year ended 31 March 2012 and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. Group statutory accounts for 31 March 2011 have been delivered to the Registrar of Companies and those for 31 March 2012 will be delivered following the Company's annual general meeting. The auditors have reported on each set of Group statutory accounts and their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

 

2    Segmental analysis 

 

a)     Revenue and net fee income, by geographical region

 


 

 

Revenue

Year ended

  Net fee income

Year ended



31 March 2012

 

 

31 March

2011

 

 

31 March

2012

 

 

31March

2011



£'000


£'000


£'000


£'000









UK

 


           9,965


       11,617


     5,339


        5,704

Asia

 


1,801


           975


     1,801


           975

Rest of World


886


        1,361


        886


        1,361

 

 


 

         12,652

 


 

       13,953


 

     8,026


 

        8,040









 

 

All revenues disclosed are derived from external customers and are for the provision of recruitment services.  The accounting policies of the reportable segments are the same as the Group's accounting policies.  Segment profit before taxation represents the profit earned by each segment after allocations of central administration costs.

 



b)     Revenue and net fee income, by classification

 


Revenue

Year ended

Net fee income

Year ended


31 March 2012

 

 

31 March

2011

 

 

31 March

2012

 

 

31March

2011


£'000


£'000


£'000


£'000









Permanent








-UK

-Asia

-Rest of World

 

           4,763

           1,801

              886

 


        4,925

          975

        1,361

 


      4,609

      1,801

         886

 


        4,724

          975

        1,361

Temporary (UK)

           5,202


        6,692


         730


          980

 

Total

 

 

         12,652


 

      13,953

 


 

      8,026


 

        8,040

 









 

c)     Profit before taxation by geographical region

 


Year ended


31 March 2012

 

 

31 March

2011


£'000


£'000





UK

         691


        1,120





Asia

         324


            96





Rest of World

          (85)


         (207)





Operating Profit

         930


        1,009

 

Net finance income

 

           18


 

            12





 

Profit before taxation

 

 

         948


 

        1,021





 

d)     Segment assets and liabilities by geographical region

 



Total non-current assets


Total liabilities



31 March

2012

 

 

31March

2011

 

 

31 March

2012

 

 

31March

2011



£'000


£'000


£'000


£'000










UK

 


9,952


      10,039


         881


        1,955

Asia

 


12


            14


         601


          108

Rest of World

 


2


              -


         341


          257

 

Total


 

9,966


 

      10,053

 


 

      1,823

 


 

        2,320

 









 

The analysis above is of the carrying amount of reportable segment assets, liabilities and non-current assets.  Segment assets and liabilities include items directly attributable to a segment and include income tax assets and liabilities.  Non-current asset include property, plant and equipment and computer software.

 

Given the increasing importance of operations outside the UK to the group additional segmental information has been provided for Asia and Rest of World.  Previously the results of these two segments were combined.



 

3. Taxation on profits on ordinary activities

 


Year Ended


31 March

2012

31 March

2011


£'000

£'000

 

Analysis of charge in the year



 

Current tax



UK Corporation tax

              231

          297

UK tax over provided in previous years

 

                13

-




Total current tax

              244

          297

 

Deferred tax



Origination and reversal of temporary differences

                24

            28







Total income tax expense in the income statement

 

              268

          325







The tax assessed for the year is equal to that obtained by applying the standard rate of corporation tax in the UK.  Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

 

Reconciliation of the effective tax rate

 


Year Ended


31 March

2012

31 March

2011




Profit before taxation

948

1,021

 







UK corporation tax at the standard rate of 26% (2011: 28%) on profit on ordinary activities

 

246

 

286

Effects of:



Expenses not deductible for tax purposes

25

22

Capital allowances for the period less than depreciation

(7)

22

Tax losses not utilised/(utilised)

7

(5)

Tax rate differences

(40)

2

Marginal relief

-

(2)

Overprovision provision in prior years

13

-







Tax charge for the year

244

325

 




 



 

4      Dividends

 


Year ended


31 March

2012

31 March

2011


£'000

£'000




 

Final dividend for 2011: 2.25 pence per share (2010: 1.5 pence per share)

 

              267

              

          178

 

Interim dividend for 2012: 1.84pence per share (2011: 1.75 pence per share)

 

 

              220

 

          209





              487

          387

 

 

The Directors propose to pay a final dividend in respect of the year ended 31 March 2012 of 2.25 pence per share (2011: 2.25 pence per share) which, subject to shareholder approval, will be paid on 29 June 2012 to shareholders who are on the register on 15 June 2012.

 

 

5      Earnings per share

 

Earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

 

Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options assuming dilution through conversion of all existing options.

 

Earnings and weighted average number of shares from continuing operations used in the calculations are shown below.

 


Year ended


31 March 2012

31 March 2011


£'000

£'000




Retained profit for basic and diluted earnings per share

              680

696











Number

Number

 

Weighted average number of shares used for basic earnings per share

 

11,890,089

 

11,883,121

Dilutive effect of share options

 

297,234

440,537




Diluted weighted average number of shares used for diluted earnings per share

 

 

12,187,323

 

12,323,657








Pence

Pence




Basic earnings per share

           5.72p

       5.86p

Diluted earnings per share

           5.58p

       5.65p


                   







6      Reconciliation of profit before tax to net cash inflow from operating activities

 


Year ended


31 March 2012

£'000

 

 

 

31 March

2011

£'000





Profit before taxation

              948


            1,021

Adjust for:




Depreciation

              120


               163

Share option reserve movement

                20


                 37

Loss/(profit) on sale of plant & equipment

                  2


                 (3)

Net finance income

               (18)


               (12)

 

Operating cash flow before changes in working capital

 

 

           1,072


 

 

            1,206





Decrease/(increase) in receivables

                37


              (160)

Decrease/(increase) payables

 

             (334)


               531





Cash generated from/(used by) underlying operations

 

 

              775


                   

            1,577





 

 

7      Analysis of net cash

 

 


At 1 April 2011   

 

 

  Cash flow

 

 

 

At 31 March 2012           


£'000


£'000


£'000







Cash at bank and in hand

         3,104


              (273)


           2,831

Bank overdraft

 

            (52)


                 45


                 (7)








         3,052


              (228)


           2,824







Bank loans due within one year

                -


                    









Obligations under finance lease

< 1 year

> 1 year

 

              (2)

            (23)


 

                  2

                 23


 

                   -

                   -













Total cash

 

         3,027


              (203)


           2,824







 

 

8      Availability of Annual Report

 

A copy of the company's Annual report will be available on the Company's website www.prime-people.co.uk and will be posted to those shareholders who have requested a copy on or around 6 June 2012.

 


This information is provided by RNS
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