TIDMPRP
RNS Number : 9821V
Prime People PLC
09 November 2017
9(th) November 2017
Prime People Plc
Unaudited Condensed Consolidated Interim Report
for the six months ended 30 September 2017
CHAIRMAN'S STATEMENT
Overview
I am pleased to report the results for Prime People Plc for the
half-year ended 30 September 2017.
Market conditions in the period became more challenging for our
overseas businesses whereas our businesses in the UK performed
well. The outcome for the period reflects the overseas businesses'
performance and the Company's expenditure on, and commitment to
long term growth internationally and to supporting new business
lines across the Group.
Net Fee Income ("NFI") in the period for the Group was GBP6.15m
(2016: GBP6.33m). The profit before tax for the first half, on a
like for like basis, was GBP0.70m (2016: GBP0.76m).
The interim dividend will be 1.75p per share (2016: 1.75p).
Financial Results
Group revenue was 1.83% lower than the same period last year at
GBP11.27m (2016: GBP11.48m).
Net Fee Income ("NFI") in the period for the Group was GBP6.15m
(2016: GBP6.33m). Our UK business showed strong NFI performance
with an increase to GBP3.84m (2016: GBP3.40m). Our overseas NFI was
GBP2.31m (2016: GBP2.93m).
Administrative costs for the group were GBP5.50m during the
period (2016: GBP5.57m). Whilst continuing to exercise careful cost
control, we have invested in the growth and diversification of our
businesses increasing consultant headcount across the Group by
3%.
The reduction in profit before taxation in the period to
GBP0.65m, after exceptional costs of GBP50,000 in the period
relating to the acquisition of Command Recruitment, (2016:
GBP0.76m) is the result of lower levels of activity in our overseas
businesses and fixed staff costs associated with talent
investment.
In the UK profit before tax grew to GBP0.51m from GBP0.10m in
the same period in the prior year, driven by good growth in NFI in
both our permanent and contract businesses.
Our Asia business, which covers the Group activities in Hong
Kong and Singapore, closed the period with profit before tax of
GBP0.26m (2017: GBP0.60m). The regional performance was affected by
Chinese capital control policies, which resulted in reduced demand
in our core real estate market. Action has been taken to refocus
business development activity and to address training needs. This
is having positive outcomes and we expect an improved performance
from the region in the second half of the year.
Our business in Dubai is reported under Rest of the World below
and represents 3.04 per cent of Group's activities. The business
experienced reduced NFI of GBP0.19m (2016: GBP0.33m). The business
has relatively high fixed costs and the slower than expected
development of a new revenue stream together with staff movements
resulted in a negative contribution in the period of GBP0.12m.
Performance from the region is expected to improve in the second
half.
The charge for taxation of GBP0.14m (2016: GBP0.16m) is based on
the expected annual effective tax rate of 19% (2016: 20%).
Basic earnings per share for the period were 4.16p (2016:
4.92p).
Cash Flow
The Group continues to maintain a strong net cash position. At
the end of the period the Group had net cash of GBP2.57m (2016:
GBP1.34m). Following payment of GBP1.00m for the acquisition of the
interest in Command Recruitment Group (H.K.) Limited, the Group
cash held as at the date of this statement was GBP1.86m.
Dividend
The Board will be declaring an interim dividend of 1.75p (2016:
1.75p) payable on 24 November 2017 to those shareholders whose
names are on the register on 17 November 2017.
Command Recruitment Group (H.K.) Limited
On 11(th) October 2017, shortly after the half year's end, our
Hong Kong subsidiary, Macdonald and Company Limited acquired 60 per
cent of the equity capital of Command Recruitment Group (H.K.)
Limited ("CMD") for consideration of HK$9.9 million (GBP1.0
million).
The consideration for the acquisition was funded from the
Group's existing cash reserves. The key management of CMD will
remain with the business post-acquisition and they, as a group,
will retain the remaining 40 per cent of CMD's equity capital.
Under the terms of the shareholders' agreement, the Group has the
option to purchase CMD's remaining equity capital after 30 June
2018.
CMD specialises in providing professional and executive staff
for the construction & engineering, design & development,
infrastructure and professional services sectors. The transaction
adds considerably to the Group's client reach and our span of
services in the Asia Pacific and Middle East regions. The fit with
our current business is complementary and we have identified a
range of opportunities arising from the investment.
We are very pleased to welcome Command and its people to the
Group and look forward to working with them.
Outlook
Subject to economic circumstances in the regions in which we
operate remaining in their current state, we expect the businesses
to perform in the second half at least in line with levels achieved
in the first half.
The present focus for the Group is to maximize the returns from
recent investment in businesses and people, to improve productivity
and increase profitability.
Robert Macdonald
Executive Chairman
9(th) November 2017
For further information please contact:
Prime People 020 7318 1785
Robert Macdonald, Executive Chairman
Donka Zaneva-Todorinski, Finance
Director
Cenkos Securities 020 7397 8900
Elizabeth Bowman - Nomad
Julian Morse - Sales
PRIME PEOPLE PLC
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF
COMPREHENSIVE INCOME
For the six months ended 30 September 2017
Six months ended Year ended
30 September 30 September 31 March
2017 2016 2017
Note GBP'000 GBP'000 GBP'000
Revenue 3 11,271 11,477 24,213
Cost of sales (5,123) (5,151) (11,115)
-------------------------- ----- ------------------------------ --------------------------- ---------------
Net fee income 6,148 6,326 13,098
Administrative expenses (5,501) (5,566) (11,194)
-------------------------- ----- ------------------------------ --------------------------- ---------------
Operating profit 647 760 1,904
Profit before taxation 647 760 1,904
Income tax expense 4 (139) (155) (292)
-------------------------- ----- ------------------------------ --------------------------- ---------------
Profit for the
period/year 508 605 1,612
Other comprehensive (loss)/ income:
Exchange (loss)/ gain on
translating
foreign operations (170) 206 270
------------------------------------- ------------------------------ --------------------------- ---------------
Other Comprehensive loss for
the period/ year, net of tax (170) 206 270
------------------------------------- ------------------------------ --------------------------- ---------------
Total comprehensive income for
the period/year 338 811 1,882
------------------------------------- ------------------------------ --------------------------- ---------------
Attributable to:
Equity shareholders of
the parent 338 811 1,882
-------------------------- ----- ------------------------------ --------------------------- ---------------
Earnings per share 6
Basic earnings per share 4.16p 4.92p 13.14p
Diluted earnings per
share 4.06p 4.79p 12.97p
-------------------------- ----- ------------------------------ --------------------------- ---------------
The above results relate to continuing operations.
The notes to the financial statements form an integral part of
this unaudited condensed consolidated interim report.
PRIME PEOPLE PLC
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
As at 30 September 2017
30 September 30 September 31 March
2017 2016 2017
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 9,769 9,769 9,769
Property, plant and
equipment 228 167 136
Deferred tax asset 43 - 43
10,040 9,936 9,948
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Current assets
Trade and other receivables 9 4,735 5,473 5,101
Cash and cash equivalents 2,569 1,336 2,409
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
7,304 6,809 7,510
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Total assets 17,344 16,745 17,458
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Liabilities
Current Liabilities
Trade and other payables 10 2,221 2,363 2,310
Current tax liabilities 84 165 75
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
2,305 2,528 2,385
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Non-current liabilities
Deferred tax liabilities - 6 -
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
- 6 -
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Total liabilities 2,305 2,534 2,385
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Net assets 15,039 14,211 15,073
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Capital and reserves attributable to the Company's equity holders
Called up share capital 1,229 1,229 1,229
Capital redemption reserve 9 9 9
Treasury shares (45) (13) (21)
Share premium account 5,371 5,371 5,371
Merger reserve 173 173 173
Share option reserve 329 359 280
Currency translation
differences 563 669 733
Retained earnings 7,410 6,414 7,299
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
Equity shareholders funds 15,039 4,211 15,073
----------------------------- ----- ----------------------------------- --- -------------------- --- -----------------
The notes to the financial statements form an integral part of
this unaudited condensed consolidated interim report.
PRIME PEOPLE PLC
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
For the six months ended 30 September 2017
Called Capital Treasury Share Merger Share Translation Retained Total
up share redem- shares premium reserve option Reserve earnings
capital ption account reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April
2016 1,229 9 (21) 5,371 173 300 463 5,892 13,416
Profit for
the period - - - - - - - 605 605
Other
comprehensive
income - - - - - - 206 - 206
Shares
purchased
for treasury - - (86) - - - - - (86)
Shares issued
from treasury - - 11 - - - - - 11
Adjustment
on share
disposal - - 83 - - - - (83) -
Adjustment
in respect
of share
options - - - - - 59 - - 59
---------------- --------------------------- -------------------- --------- ----------------------- -------- ------------ ------------ ---------------- ---------
At 30
September
2016 1,229 9 (13) 5,371 173 359 669 6,414 14,211
---------------- --------------------------- -------------------- --------- ----------------------- -------- ------------ ------------ ---------------- ---------
Profit for
the period - .- - - - - - 1007 1007
Other
comprehensive
income - - - - - - 64 - 64
Adjustment
in respect
of share
options - - - - - (79) - 108 29
Shares
purchased
for treasury - - (25) - - - - - (25)
Shares issued
from treasury - - 2 - - - - - 2
Adjustment
on share
disposal - - 15 - - - - (15) -
Dividend - - - - - - - (215) (215)
---------------- --------------------------- -------------------- --------- ----------------------- -------- ------------ ------------ ---------------- ---------
At 31 March
2017 1,229 9 (21) 5,371 173 280 733 7,299 15,073
---------------- --------------------------- -------------------- --------- ----------------------- -------- ------------ ------------ ---------------- ---------
Profit for
the period - - - - - - - 508 508
Other
comprehensive
(loss)/income - - - - - - (170) - (170)
Shares
purchased
for treasury - - (24) - - - - - (24)
Adjustment
in respect
of share
options - - - - - 49 - - 49
Dividend - - - - - - - (397) (397)
At 30
September
2017 1,229 9 (45) 5,371 173 329 564 7,410 15,039
---------------- --------------------------- -------------------- --------- ----------------------- -------- ------------ ------------ ---------------- ---------
PRIME PEOPLE PLC
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH
FLOW
For the six months ended 30 September 2017
Six months ended Year ended
30 September 2017 30 September 31 March
2016 2017
Note GBP'000 GBP'000 GBP'000
Cash generated from underlying operations 7 1,028 517 1,981
Income tax paid (128) (240) (521)
-------------------------------------------- ----- ------------------ ------------------ -------------------
Net cash from operating activities 900 277 1,460
Cash flows from investing activities
Net purchase of property, plant and equipment (149) (25) (53)
Net cash used in investing activities (149) (25) (53)
-------------------------------------------- ----- ------------------ ------------------ -------------------
Cash flows from financing activities
Issue of ordinary share capital - - 2
Shares issued from treasury - 11 115
Shares purchased for treasury (24) (86) (111)
Dividend paid to shareholders (397) - (215)
Net cash used in financing activities (421) (75) (209)
--------------------------------------------------- ------------------ ------------------ -------------------
Net increase in cash and cash equivalents 330 177 1,198
Cash and cash equivalents at beginning of
period/year 2,409 953 953
Effect of foreign exchange rate changes (170) 206 258
--------------------------------------------------- ------------------ ------------------ -------------------
Cash and cash equivalents at end of period/year 2,569 1,336 2,409
--------------------------------------------------- ------------------ ------------------ -------------------
The notes to the financial statements form an integral part of
this unaudited condensed consolidated interim report.
PRIME PEOPLE PLC
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT
For the six months ended 30 September 2017
1. General information
Prime People Plc ('the Company') and its subsidiaries (together
'the Group') is an international recruitment services organisation
with offices in the United Kingdom, the Middle East and the Asia
Pacific region from which it serves an international client base.
The Group offers both permanent and contract specialist recruitment
consultancy for large and medium sized organisations.
Prime People Plc is the Group's ultimate parent company. The
Company is a limited liability company incorporated and domiciled
in the United Kingdom. The address of Prime People Group's
registered office and its principal place of business is 2 Harewood
Place, London, W1S 1BX, England. Prime People Group's shares are
quoted on the Alternative Investment Market (AIM) of the London
Stock Exchange. The registered number of the company is
1729887.
This unaudited condensed consolidated interim report for the six
months ended 30 September 2017 (including comparatives) is
presented in GBP'000, and was approved and authorised for issue by
the Board of Directors on 8 November 2017.
Copies of the interim results are available at the Company's
registered office and on the Company's website -
www.prime-people.co.uk.
This unaudited condensed consolidated interim report does not
constitute statutory accounts of the Group within the meaning of
section 434 of the Companies Act 2006. The financial information
for the year ended 31 March 2017 has been extracted from the
statutory accounts for that year, which have been filed with the
Registrar of Companies. The auditor's report on those accounts was
unqualified and did not contain a statement under section 498 of
the Companies Act 2006.
2. Basis of preparation
The unaudited condensed consolidated interim report for the six
months ended 30 September 2017 has been prepared using accounting
policies consistent with International Financial Reporting
Standards ("IFRSs") and in accordance with 'IAS 34, Interim
financial reporting', as adopted by the European Union. The
condensed consolidated interim report should be read in conjunction
with the annual financial statements for the year ended 31 March
2017 which were prepared in accordance with IFRSs as adopted by the
European Union.
The Group was profitable for the period and has considerable
financial resources comprising GBP2.57m of net cash at 30 September
2017. After making enquiries, the Directors have formed a
judgement, at the time of approving the six months results, that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, a period of not less than 12 months. For this reason the
Directors continue to adopt the going concern basis in preparing
the condensed set of financial statements.
These financial statements have been prepared under the
historical cost convention, using the same accounting policies as
those used in the preparation of the financial statements for the
year ended 31 March 2017 and which are also expected to apply for
the year ended 31 March 2018.
The directors expect the adoption of IFRS 15 may have an impact
on revenue recognition and related disclosures. It is not
practicable to provide a reasonable estimate of the impact of IFRS
15 until a detailed review has been completed. The detailed review
will be disclosed in the Annual Report for financial year ending
31.03.2018.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of the
condensed consolidated interim report.
3. Segment reporting
(a) Revenue and net fee income by geographical region
Revenue Net fee income
Six months ended Year ended Six months ended Year ended
30 September 30 September 31 March 2017 30 September 30 September 31 March 2017
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
UK 8,963 8,547 18,558 3,840 3,396 7,443
Asia 2,121 2,601 5,075 2,121 2,601 5,075
Rest of World 187 329 580 187 329 580
--------------- --------- ------------- -------------- ------------- ------------- --------------
11,271 11,477 24,213 6,148 6,326 13,098
--------------- --------- ------------- -------------- ------------- ------------- --------------
All revenues disclosed by the group 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 Net fee income
Six months ended Year ended Six months ended Year ended
30 September 30 September 31 March 2017 30 September 30 September 31 March 2017
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Permanent
- UK 3,227 2,724 6,004 3,152 2,721 5,991
- Asia 2,121 2,601 5,075 2,121 2,601 5,075
- Rest of World 187 329 580 187 329 580
Contract (UK) 5,736 5,823 12,554 688 675 1,452
11,271 11,477 24,213 6,148 6,326 13,098
------------------- ---- -------- ----- --------- ---- --------- ----- ---------- ----- --------- ---- ---------
(c) Profit before taxation by geographical region
Six months ended Year ended
30 September 30 September 2016 31 March 2017
2017
GBP'000 GBP'000 GBP'000
UK 508 103 823
Asia 256 600 1,035
Rest of World (117) 57 46
Profit before taxation 647 760 1,904
--------------------------------- ------------- ------------------ --------------
Operating profit is the measure of profitability regularly
viewed by the Board, which collectively acts as the Chief Decision
Maker. Consequently, no segmental analysis of interest or tax
expenses is provided.
(d) Segment Assets and Liabilities by Geographical Region
Total assets Total liabilities
30September 2017 30September 2016 30September 2017 30September 2016
GBP'000 GBP'000 GBP'000 GBP'000
UK 13,153 12,680 1,834 1,645
Asia 3,683 3,381 435 632
Rest of World 508 684 36 77
---------------- ----------------- ----------------- ----------------- -----------------
Total 17,344 16,745 2,305 2,363
---------------- ----------------- ----------------- ----------------- -----------------
The analysis above is of the carrying amount of reportable
segment assets and liabilities. Segment assets and liabilities
include items directly attributable to a segment and include income
tax assets and liabilities.
4. Income tax expense
The charge for taxation on profits for the interim period
amounted to GBP139k (2016: GBP155k) an effective rate of 19% (2016:
20%).
5. Dividends
Six months ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Final dividend for 2017: 3.25p per share 397 - -
(2016: 0.00p per share)
Interim dividend for 2017 1.75p per share
(2016: 1.75p per share) - - 215
397 - 215
The interim dividend for 2018 of 1.75 pence (2017: 1.75 pence
paid on 25 November 2016), was approved by the board on 8 November
2017 and will be paid on 24 November 2017 to those shareholders
whose names are on the register on 17 November 2017.
6. Earnings per share
Earnings per share (EPS) are calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period.
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:
Six months ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Retained profit for basic and diluted earnings per share 508 605 1,612
------------------------------------------------------------- ---------------- -------------- -------------
Number Number Number
Weighted average number of shares used for basic earnings
per share 12,244,023 12,274,923 12,271,923
Dilutive effect of share options 302,018 334,998 195,634
------------------------------------------------------------- ---------------- -------------- -------------
Diluted weighted average number of shares used for diluted
earnings per share 12,546,041 12,609,921 12,467,557
------------------------------------------------------------- ---------------- -------------- -------------
Six months ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Pence Pence Pence
Basic earnings per share 4.16p 4.92p 13.14p
Diluted earnings per share 4.05p 4.79p 12.97p
------------------------------ ---- ----------------------- ------------- ------------------
7. Reconciliation of profit before tax to cash flow from operating activities
Six months ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Profit before taxation 647 760 1,904
Adjust for:
Depreciation 56 88 158
Share option reserve movement 50 59 89
Operating cash flow before changes in working
capital 753 907 2,151
Decrease/(increase) in receivables 365 (536) (162)
(Decrease)/increase in payables (90) 146 (8)
------------------------------------------------ ------------------------- ---------------- -------------------
Cash generated from underlying operations 1,028 517 1,981
------------------------------------------------ ------------------------- ---------------- -------------------
8. Reconciliation of net cash flow to movement in net funds
Six months ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Increase in cash and cash equivalents in
period/year 330 177 1,198
Net funds at the start of the period/year 2,409 953 953
Other non-cash changes (170) 206 258
------------------------------------------------- ------------------------- --------------- -------------------
Net funds at the end of the period/year 2,569 1,336 2,409
9. Trade and other receivables
30 September 30 September 2016 31 March 2017
2017
GBP'000 GBP'000 GBP'000
Trade receivables 2,521 2,866 2,435
Allowance for doubtful debts (20) (42) (24)
Prepayments and accrued income 2,167 2,577 2,618
Other receivables 67 72 72
-------------------------------- -------------------- ------------------ ---------------------
4,735 5,473 5,101
-------------------------------- -------------------- ------------------ ---------------------
10. Trade and other payables
30 September 30 September 2016 31 March 2017
2017
GBP'000 GBP'000 GBP'000
Trade payables 182 182 108
Other taxes and social security 774 590 667
Other payables 328 290 330
Accruals and deferred income 937 1,301 1,205
--------------------------------- -------------------- ------------------- --------------
2,221 2,363 2,310
--------------------------------- -------------------- ------------------- --------------
11. Treasury Shares
At 30 September 2017, the total number of ordinary shares held
in Treasury and their values were as follows:
30 September 2017 30 September
2016
Number GBP'000 Number GBP'000
As at 1 April 21,276 21 21,276 21
Shares purchased for treasury 27,900 24 101,000 86
Shares issued from treasury - - (107,000) (11)
Equity reclassification on disposal of
treasury shares - - - (83)
---------------------------------------- ----------- -------- ---------- -----------------
As at 30 September 46,176 45 21,276 13
---------------------------------------- ----------- -------- ---------- -----------------
Nominal value 5 2
Market value 47 15
---------------------------------------- ----------- -------- ---------- -----------------
12. Related Party Transactions
Prime People Plc provides various management services to its
subsidiary undertakings. These services take the form of
centralised finance and operations support. The total amount
charged by the Company to its subsidiaries during the period is
GBP352k (2016: GBP262k). The balance owed to the subsidiary
undertakings at the year end is GBP689k (2016: GBP837k).
13. Subsequent events
On 11(th) October 2017, shortly after the half year's end, our
Hong Kong subsidiary, Macdonald and Company Limited acquired 60 per
cent of the equity capital of Command Recruitment Group (H.K.)
Limited ("CMD") for consideration of HK$9.9 million (GBP1.0
million).
The consideration for the acquisition was funded from the
Group's existing cash reserves. The key management of CMD will
remain with the business post-acquisition and they, as a group,
will retain the remaining 40 per cent of CMD's equity capital.
The disclosure required under IFRS3 paragraph B64 have not been
made because the initial accounting for the business combination is
still ongoing, in particular, the fair value of the separable
intangibles is still being considered
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKFDBFBDDDDK
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