Final Results

RNS Number : 1425C

Robert Walters PLC

02 March 2011

 



ROBERT WALTERS PLC

Results for the year ended 31 December 2010

STRONG GROWTH UNDERPINNED BY CONTINUED EXPANSION OF GLOBAL NETWORK

FINANCIAL HIGHLIGHTS

	2010	2009	% change	% change (constant currency*)
Revenue	£424.2m	£300.4m	+41%	+34%
Net fee income (gross profit)	£155.4m	£104.4m	+49%	+43%
Operating profit	£13.2m	£1.6m	+737%	+643%
Profit before taxation	£13.1m	£1.3m	+900%	+786%

* Constant currency is calculated by applying 2009 exchange rates to local currency results for the current and prior years.

·     Basic earnings per share of 12.5p (2009: 0.3p).

·     Final dividend increased to 3.5p per share (2009: 3.35p), giving a total dividend for the year of 4.9p per share (2009: 4.75p).

·     Cash position has increased to £24.9m of net cash as at 31 December 2010 (31 December 2009: £17.3m).

·     Purchased £3.0m of own shares through share buy-back programme.

OPERATIONAL HIGHLIGHTS

·     Strong performance in Asia Pacific with net fee income up 76% (58%*) to £75.6m (2009: £43.0m).

o  Third mainland China office opened in Beijing.

o  First South Korea office opened in Seoul.

·     UK net fee income up 36% to £45.8m (2009: £33.8m).

·     Solid performance in Europe with net fee income up 19% (23%*) to £30.4m (2009: £25.7m).

o  Entered the German market with the opening of an office in Dusseldorf.

o  Additional office opened in Belgium.

·     The Group's first office in South America opened in Sao Paulo.

·     71% of the Group's net fee income generated from outside of the UK (2009: 68%).

·     Headcount increased by 37% to 1,735 as at 31 December 2010 (2009: 1,269).

INVESTING FOR GROWTH IN 2011

·      Office opened in Chatswood, Sydney in February. Group now has six offices across Australia.

·      New offices planned in Nanjing, Taipei, Ho Chi Minh City, Parramatta and Frankfurt.

·      Major office moves in London, Singapore and Sydney.

 Robert Walters, Chief Executive, commented:

"Performance across the Group has been strong, resulting in increased net fee income year on year with our Asia Pacific operations in particular delivering significant growth.

"The outlook for the year remains broadly positive. Our long term investment in our international network has enabled us to build market share across the globe with 71% of the Group's net fee income now generated outside of the UK. We intend to continue with this strategy and will seek to reinforce our established businesses, whilst identifying and investing in those regions providing the strongest opportunities for growth."

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 2010

Chairman's Statement

In 2010, market conditions continued to improve and we achieved strong growth across all of the Group's operations. We have been able to strengthen our presence within our established areas of business whilst also seizing opportunities for expansion into newer, emerging markets.

We have taken advantage of the improvement in market conditions by reacting quickly and investing aggressively in headcount. Staff numbers rose by 37% during the year and at 31 December 2010 were 1,735 (31 December 2009: 1,269).

Results

Revenue was £424.2m (2009: £300.4m) and gross profit (net fee income) increased by 49% to £155.4m (2009: £104.4m). Operating profit was £13.2m (2009: £1.6m) and profit before taxation improved significantly to £13.1m (2009: £1.3m). The Group maintained a strong net cash position of £24.9m as at 31 December 2010 (2009: £17.3m).

The Group generated 71% (2009: 68%) of its net fee income from outside of the UK. We established our first offices in South Korea, Germany and Brazil and also opened additional offices in China and Belgium. Although Asia Pacific remains a key growth area for the Group, with net fee income increasing by 76% this year and an especially strong performance in China, the UK and Europe have also delivered increases of 36% and 19% respectively.

Permanent recruitment activity increased significantly. We also saw healthy growth in temporary recruitment and the Group is continuing to invest in all of its contract businesses. Permanent recruitment now represents 69% of the Group's recruitment net fee income (2009: 60%).

The Board will be recommending an increase in the final dividend to 3.5p (2009: 3.35p) per share which, combined with the interim dividend of 1.4p per share, will result in a total dividend of 4.9p per share. During the year £3.0m 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 25 May 2011.

Strategy

Our long term strategy of geographical expansion and diversification remains unchanged. We continue to invest in both our established businesses and in new areas where we see the most potential. In 2011, we have opened a sixth office in Australia, taking our total number of offices to 43 in 20 countries.  We are also actively examining further opportunities in Australia, China, Germany, Taiwan and Vietnam and will be undertaking three major office moves in London, Singapore and Sydney.

Finally, I would like to thank all our staff for their continued hard work and commitment, which has enabled the Group to deliver such an impressive performance.

Philip Aiken

Chairman

1 March 2011

Chief Executive Officer's Statement

Introduction

The Group has benefited from its continued investment in existing and new markets and enhanced its position as one of the world's leading specialist professional recruitment consultancies.

Performance across the Group has been strong, resulting in significantly increased net fee income year on year. Markets continued to be active with our Asia Pacific operations in particular delivering excellent growth.

During the year we have invested in headcount, with a 37% increase in staff numbers year on year and opened five new offices. The Group is now more internationally diverse than ever before and has a wide pool of high calibre staff and considerable strength and depth of senior management. Our policy of promotion from within ensures long term career progression for staff and underpins the successful replication of the unique Robert Walters culture across the globe.

Review of Operations

Asia Pacific (49% of net fee income)

Revenue was £191.3m (2009: £122.5m) and net fee income increased 76% (58% in constant currency) to £75.6m (2009: £43.0m), producing an operating profit of £11.3m (£9.7m in constant currency) (2009: £3.3m).

The Asia Pacific region delivered very strong net fee income and operating profit growth, with China, Hong Kong and Singapore the stand-out performers, all more than doubling net fee income. Japan also performed strongly and continues to benefit from favourable demographic trends and the internationalisation of the recruitment market. During the year, we opened a third mainland China office in Beijing and our first office in South Korea in Seoul.

Australia remains a key market for the Group and has built strong momentum through the year. In February 2011, we opened our sixth office in Australia, in Chatswood, Sydney.

UK (29% of net fee income)

Revenue was £157.9m (2009: £116.6m) and net fee income increased 36% to £45.8m (2009: £33.8m), producing an operating profit of £1.3m (2009: operating loss of £0.8m).

Our UK business performed satisfactorily, delivering solid net fee income and operating profit growth. Activity levels were strong in both commerce and financial services, particularly across the disciplines of finance, IT and legal. Against a potentially uncertain economic backdrop, our exposure to the public sector represents less than 1% of UK net fee income.

Resource Solutions, our recruitment process outsourcing business, grew net fee income and was successful in further diversifying its client base through a number of commercial sector client wins.

Europe (20% of net fee income)

Revenue was £71.3m (2009: £59.4m) and net fee income increased 19% (23% in constant currency) to £30.4m (2009: £25.7m), producing an operating profit of £0.8m (£0.9m in constant currency) (2009: operating loss of £0.7m).

Recruitment activity levels across Europe were stronger during the second half of the year.  France and Belgium continued to benefit from growth in Walters Interim, our junior clerical recruitment business whilst our business in the Netherlands, which was the last to recover, delivered a strong performance towards the end of the year. Our operation in Ireland has recovered well whilst our small business in Spain continued to experience challenging market conditions.

During the year, the Group opened its first office in Germany, in Dusseldorf and a fourth office in Belgium.

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

Revenue was £3.7m (2009: £2.0m) and net fee income increased 84% (77% in constant currency) to £3.6m (2009: £2.0m), producing an operating loss of £0.1m (£0.1m loss in constant currency) (2009: operating loss of £0.2m).

The Group opened its first office in South America, in Sao Paulo, which will function as a bridgehead to further penetrate other markets across the region. In New York we have continued to expand our offering outside of financial services and grew both net fee income and operating profit. 

South Africa remains a territory in which we maintain a small presence. However, its role as a sourcing ground of candidates for our other businesses across the globe remains very important. 

Current Trading

The outlook for the year remains broadly positive. Our long term investment in our international network has enabled us to build market share across the globe with 71% of the Group's net fee income now generated outside of the UK. We intend to continue with this strategy and will seek to reinforce our established businesses, whilst identifying and investing in those regions providing the strongest opportunities for growth.

Robert Walters

Chief Executive

1 March 2011

Consolidated Income Statement

FOR THE YEAR ENDED 31 DECEMBER 2010

	2010	2009
	£'000	£'000
Revenue
Continuing operations	424,203	300,442
Cost of sales	(268,819)	(196,079)
Gross profit	155,384	104,363
Administrative expenses	(142,176)	(102,785)
Operating profit	13,208	1,578
Finance income	349	241
Finance costs	(534)	(388)
Gain (loss) on foreign exchange	104	(118)
Profit before taxation	13,127	1,313
Taxation	(4,316)	(1,073)
Profit for the year	8,811	240
Attributable to:
Owners of the Company	8,613	240
Non-controlling interest	198	-
	8,811	240
Earnings per share (pence):
Basic	12.5	0.3
Diluted	11.1	0.3

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 DECEMBER 2010

	2010	2009
	£'000	£'000
Profit for the year	8,811	240
Exchange differences on translation of overseas operations	2,694	(363)
Total comprehensive income and expense for the year	11,505	(123)
Attributable to:
Owners of the Company	11,307	(123)
Non-controlling interest	198	-
	11,505	(123)

Consolidated Balance Sheet

AS AT 31 DECEMBER 2010

	2010	2009
	£'000	£'000
Non-current assets
Intangible assets	8,632	8,913
Property, plant and equipment	4,909	4,271
Deferred tax assets	8,515	3,930
	22,056	17,114
Current assets
Trade and other receivables	100,410	66,744
Corporation tax receivables	106	2,247
Cash and cash equivalents	31,906	19,812
	132,422	88,803
Total assets	154,478	105,917
Current liabilities
Trade and other payables	(78,852)	(48,592)
Corporation tax liabilities	(5,548)	(692)
Bank overdrafts and loans	(6,828)	(2,100)
	(91,228)	(51,384)
Net current assets	41,194	37,419
Non-current liabilities
Bank loans	(195)	(441)
Deferred tax liabilities	(844)	(758)
	(1,039)	(1,199)
Total liabilities	(92,267)	(52,583)
Net assets	62,211	53,334
Equity
Share capital	17,092	17,034
Share premium	21,040	20,586
Other reserves	(73,410)	(73,410)
Own shares held	(14,115)	(12,763)
Treasury shares held	(19,860)	(18,865)
Foreign exchange reserves	11,249	8,555
Retained earnings	120,017	112,197
Equity attributable to owners of the Company	62,013	53,334
Non-controlling interest	198	-
Total equity	62,211	53,334

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 DECEMBER 2010

	2010	2009
	£'000	£'000
Cash generated from operating activities	15,683	7,952
Income taxes paid	(519)	(4,005)
Net cash from operating activities	15,164	3,947
Investing activities
Acquisition of subsidiary (net of cash acquired)	(299)	(445)
Proceeds on disposal of investments	-	20
Interest paid	(185)	(147)
Purchases of computer software	(560)	(403)
Purchases of property, plant and equipment	(2,696)	(874)
Proceeds on disposal of property, plant and equipment	-	5
Net cash used in investing activities	(3,740)	(1,844)
Financing activities
Equity dividends paid	(3,250)	(3,344)
Proceeds from issue of equity	496	-
Proceeds from bank loans and overdrafts	4,651	925
Repayment of bank loans and overdrafts	(268)	(4,288)
Purchase of own shares (net of proceeds from option exercises)	(2,537)	(3,288)
Net cash used in financing activities	(908)	(9,995)
Net increase (decrease) in cash and cash equivalents	10,516	(7,892)
Cash and cash equivalents at beginning of year	19,812	28,525
Effect of foreign exchange rate changes	1,578	(821)
Cash and cash equivalents at end of year	31,906	19,812

Consolidated statement of changes in equity

FOR THE YEAR ENDED 31 DECEMER 2010

	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 2009	17,034	20,856	(73,410)	(9,834)	(18,865)	8,918	115,226	59,655	-	59,655
Profit for the year	-	-	-	-	-	-	240	240	-	240
Foreign currency translation differences	-	-	-	-	-	(363)	-	(363)	-	(363)
Total comprehensive income and expense for the year	-	-	-	-	-	(363)	240	(123)	-	(123)
Dividends paid	-	-	-	-	-	-	(3,344)	(3,344)	-	(3,344)
Own shares purchased	-	-	-	(3,542)	-	-	-	(3,542)	-	(3,542)
Adjustment in respect of share schemes	-	-	-	613	-	-	75	688	-	688
Balance at 31 December 2009	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

Statement of Accounting Policies

FOR THE YEAR ENDED 31 DECEMBER 2010

Accounting Policies Basis of preparation

The financial report for the year ended 31 December 2010 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 has net cash of £24.9m and has emerged from the recent economic downturn in a strong position relative to the overall market, although the Group is mindful that there are certain individual markets that continue to face challenges in 2011. However, the diversified nature of the Group reduces the reliance on the success of any one market, allowing it to capitalise on a strong performance in 2010 and to further grow market share during 2011. 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 1 March 2011, does not constitute the Company's statutory accounts for the year ended 31 December 2010 butis derived from these accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 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 25 May 2011 at 55 Strand, London WC2N 5WR.

1.	Segmental information
		2010	2009
		£'000	£'000
i)	Revenue:
	Asia Pacific	191,316	122,495
	UK	157,892	116,578
	Europe	71,326	59,407
	The Americas and South Africa	3,669	1,962
		424,203	300,442
ii)	Gross profit:
	Asia Pacific	75,586	42,988
	UK	45,805	33,772
	Europe	30,408	25,651
	The Americas and South Africa	3,585	1,952
		155,384	104,363

			2010		2009
			£'000		£'000
iii)	Profit before taxation:
	Asia Pacific		11,268		3,292
	UK		1,258		(830)
	Europe		754		(697)
	The Americas and South Africa		(72)		(187)
	Operating profit		13,208		1,578
	Net finance cost		(81)		(265)
	Profit before taxation		13,127		1,313
iv)	Net Assets:
	Asia Pacific	20,236		19,589
	UK	11,691		9,034
	Europe	2,784		2,467
	The Americas and South Africa	388		246
	Unallocated corporate assets and liabilities*	27,112		21,998
		62,211		53,334

The analysis of revenue by destination is not materially different to the analysis by origin and the analyses 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 - 2010	Fixed asset 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*	-	-	8,515	40,527	(13,415)
		3,256	3,074	22,056	154,478	(92,267)
v)	Other information - 2009	Fixed asset additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	466	1,230	9,865	30,143	(10,554)
	UK	574	1,785	1,920	35,951	(26,917)
	Europe	212	322	1,317	13,453	(10,986)
	The Americas and South Africa	25	44	82	381	(135)
	Unallocated corporate assets and liabilities*	-	-	3,930	25,989	(3,991)
		1,277	3,381	17,114	105,917	(52,583)

		2010	2009
		£'000	£'000
vi)	Revenue by business grouping:
	Robert Walters	366,912	265,184
	Resource Solutions (recruitment process outsourcing)	57,291	35,258
		424,203	300,442

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

2.	Finance costs
		2010	2009
		£'000	£'000
	Interest on bank overdrafts	445	11
	Interest on long-term loans	89	377
	Total borrowing costs	534	388

3.	Taxation
		2010	2009
		£'000	£'000
	Current tax charge
	Corporation tax - Overseas	7,307	1,164
	Adjustments in respect of prior years
	Corporation tax - UK	77	330
	Corporation tax - Overseas	(83)	(105)
		7,301	1,389
	Deferred tax
	Deferred tax - UK	(1,561)	(501)
	Deferred tax - Overseas	(1,184)	184
	Adjustments in respect of prior years
	Deferred tax - UK	(283)	-
	Deferred tax - Overseas	43	1
		(2,985)	(316)
	Total tax charge for the year	4,316	1,073
	Profit before taxation	13,127	1,313
	Tax at standard UK corporation tax rate of 28% (2009: 28%)	3,676	368
	Effects of:
	Unrelieved losses	314	274
	Other expenses not deductible for tax purposes	255	188
	Overseas earnings taxed at different rates	117	17
	Adjustments to tax charges in previous years	(245)	226
	Impact of tax rate charge	199	-
	Total tax charge for the year	4,316	1,073

4.	Dividends
		2010	2009
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Interim dividend paid of 1.4p per share (2009: 1.4p)	958	990
	Final dividend for 2009 of 3.35p per share (2008: 3.35p)	2,292	2,354
		3,250	3,344
	Proposed final dividend for 2010 of 3.5p per share  (2009: 3.35p)	2,393	2,314
	The proposed final dividend of £2,393,000 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
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.
		2010	2009
		£'000	£'000
	Profit for the year attributable to equity holders of the parent	8,613	240
		2010	2009
		Number of shares	Number of shares
	Weighted average number of shares:
	Shares in issue throughout the year	85,168,703	85,168,703
	Share issued in the year	145,800	-
	Treasury and own shares held	(16,667,426)	(14,869,591)
	For basic earnings per share	68,647,077	70,299,112
	Outstanding share options	8,996,317	6,750,325
	For diluted earnings per share	77,643,394	77,049,437

6.	Intangible assets
		Goodwill	Computer software	Total
		£'000	£'000	£'000
	Cost:
	At 1 January 2009	7,908	5,153	13,061
	Additions	-	403	403
	Disposals	-	(117)	(117)
	Foreign currency translation differences	(68)	(33)	(101)
	At 31 December 2009	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
	Accumulated amortisation and impairment:
	At 1 January 2009	-	3,423	3,423
	Charge for the year	-	994	994
	Disposals	-	(70)	(70)
	Foreign currency translation differences	-	(14)	(14)
	At 31 December 2009	-	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
	Carrying value:
	At 1 January 2009	7,908	1,730	9,638
	At 31 December 2009	7,840	1,073	8,913
	At 31 December 2010	7,874	758	8,632

The carrying value of goodwill relates to the acquisition of Talent Spotter in China (£1,027,000) 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 over the next five years, calculated by preparing cash flow forecasts derived from the most recent financial budgets and an assumed growth rate of 3%, which does not exceed the long-term average potential growth rate of the respective operations.  The value of the cash flows is then discounted based on a post tax rate of 6.5% (pre-tax rate of 9.6%), being 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 2009	4,264	7,312	3,902	56	15,534
	Additions	267	255	342	10	874
	Disposals	(393)	(460)	(204)	-	(1,057)
	Foreign currency translation differences	(181)	129	(99)	(2)	(153)
	At 31 December 2009	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
	Accumulated depreciation and impairment:
	At 1 January 2009	2,873	3,742	2,648	43	9,306
	Charge for the year	732	944	699	11	2,386
	Disposals	(316)	(266)	(196)	-	(778)
	Foreign currency translation differences	(103)	181	(63)	(2)	13
	At 31 December 2009	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
	Carrying value:
	At 1 January 2009	1,391	3,570	1,254	13	6,228
	At 31 December 2009	771	2,635	853	12	4,271
	At 31 December 2010	969	2,443	1,446	51	4,909

8.	Trade and other receivables
		2010	2009
		£'000	£'000
	Receivables due within one year:
	Trade receivables	78,023	49,358
	Other receivables	2,449	2,656
	Prepayments and accrued income	19,938	14,730
		100,410	66,744

9.	Trade and other payables: amounts falling due within one year
		2010	2009
		£'000	£'000
	Trade payables	2,820	2,352
	Other taxation and social security	18,192	11,986
	Other trade payables	14,008	11,242
	Accruals and deferred income	43,832	23,012
		78,852	48,592

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
		2010	2009
		£'000	£'000
	Bank overdrafts and loans: current	6,828	2,100
	Bank loans: non-current	195	441
		7,023	2,541
	The borrowings are repayable as follows:
	Within one year	6,828	2,100
	In the second year	195	257
	In the third to fifth year inclusive	-	184
		7,023	2,541

In March 2008, the Group borrowed Renminbi 20m at an interest rate of 110% of the People Bank of China base rate to finance the acquisition of Talent Spotter and provide working capital.  Renminbi 10m is repayable over four years and the remainder is a short-term facility.  The loan is secured against cash deposits in Hong Kong.

In June 2010, the Group entered into a committed, three-year, £20.0m receivables financing agreement. At 31 December 2010, £5.6m was drawn down under this facility.

The Directors estimate that the fair value of all borrowings is not materially different from the amounts stated in the Consolidated Balance Sheet of £7,023,000 (2009: £2,541,000).

11.	Notes to the cash flow statement
		2010	2009
		£'000	£'000
	Operating profit	13,208	1,578
	Adjustments for:
	Depreciation and amortisation charges	3,074	3,381
	Loss on disposal of property, plant and equipment	76	321
	Gain on disposal of investments	-	(20)
	Movement in share scheme balance	1,368	(216)
	Operating cash flows before movements in working capital	17,726	5,044
	(Increase) decrease in receivables	(30,953)	1,184
	Increase in payables	28,910	1,724
	Cash generated from operating activities	15,683	7,952

12.	Reconciliation of net cash flow to movement in net cash
		2010	2009
		£'000	£'000
	Increase (decrease) in cash and cash equivalents in the year	10,516	(7,892)
	Cash (inflow) outflow from movement in bank loans	(4,383)	3,363
	Foreign currency translation differences	1,479	(372)
	Movement in net cash in the year	7,612	(4,901)
	Net cash at beginning of year	17,271	22,172
	Net cash at end of year	24,883	17,271

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

 

END

 

 

FR UAOKRAVAORAR