RNS Number : 1089F Penna Consulting PLC 10 November Penna's Profit ajer Tax up 36% in First Half and Interim Dividend doubled to 4p per share

Transcription

1 Penna Cons PLC Half Yearly Unaudited Interim Results RNS Number : 1089F Penna Consulting PLC 10 November PENNA CONSULTING PLC ("Penna" or "the Group") Interim Unaudited Results for the six months ended Penna's Profit ajer Tax up 36% in First Half and Interim Dividend doubled to 4p per share 10 November Penna Consul+ng Plc (PNA: AIM), the interna+onal human resources consul+ng group, today announces its unaudited interim results for the six months ended. FINANCIAL HIGHLIGHTS Gross Revenue +15% to 47m (2014: 41m) Net Revenue +20% to 25m (2014: 21m) Opera+ng Profit +34% to 2.8m (2014: 2.1m) Profit aser Tax +36% to 2.3m (2014: 1.7m) Earnings per Share +36% to 9.1p (2014: 6.6p) Interim Dividend +100% to 4.0p (2014: 2.0p) Net cash 4.2m (31 March : 2.3m) Net cash generated by opera+ng ac+vi+es 3.7m (2014: 1.0m) OPERATIONAL HIGHLIGHTS Further impressive growth of Recruitment Solu+ons: Net Revenue +25% to 11.2m (2014: 8.9m) and Opera+ng Profit +16% to 1.6m (2014: 1.3m) Steady performance from Career Services: Net Revenue +8% to 10.4m (2014: 9.9m) and Opera+ng Profit held at 1.8m Turnaround of Talent Prac+ce: Net Revenue +45% to 3.1m (2014: 2.6m) Commen+ng on the results and outlook, Stephen Rowlinson, Chairman, said: "Penna made further substan+al progress in the first half with Profit aser Tax up 36% to 2.3m and Earnings per Share up 36% to 9.1p. These advances are par+cularly noteworthy because comparisons are with performance in H1 last year, which at the +me I was able to describe as "by far the best first half performance from the Company since the beginning of the recession in 2009". As the UK economy con+nues to grow we are seeing a significant rise in clients' expenditure on 1 of 10 10/11/ 11:59

2 recruitment and other HR projects. Penna con+nues with impressive momentum and we remain confident of the outlook for the Group. We now believe that profit for the year will be ahead of management's original expecta+ons and we are doubling the Interim Dividend." ENDS For further informa+on please contact: Gary Browning, Chief Execu+ve David Firth, Finance Director Panmure Gordon (UK) Ltd Nominated Adviser and Broker Mark Taylor Karri Vuori Vigo CommunicaRons Ben Simons, Jeremy Garcia or Fiona Henson Chairman's Review Penna has completed another successful first half with Profit aser Tax up 36% to 2.3m (2014: 1.7m) and Earnings per Share up 36% to 9.1p (2014: 6.6p). The UK Recruitment market has con+nued to strengthen but has yet to regain the levels of ac+vity seen before the recession. Against that background our Recruitment SoluRons division con+nues to impress by delivering record half year net revenue and profit figures. A combina+on of a recovering market and further gains in market share produced 25% growth in net revenue to 11.2m (2014: 8.9m) and a 16% gain in opera+ng profit to 1.6m (2014: 1.3m). Penna's Career Services division includes our Outplacement business. Typically, two major drivers of demand are large scale mergers leading to ra+onalisa+on and the cycle of expansion and contrac+on in the financial services sector. In the period under review there was rela+vely subdued M&A ac+vity in the UK and no pronounced downsizing in the City of London. Nevertheless Career Services grew net revenue by 8% to 10.4m (2014: 9.9m) and maintained opera+ng profit at 1.8m (2014: 1.8m) in line with last year. The Talent Management division achieved management's target of elimina+ng last year's opera+ng loss ( 0.3m) and grew net revenue by a substan+al 45% to produce net revenue of 3.1m (2014: 2.4m). Talent Management con+nues to win new projects and is increasingly benefi+ng from its ability to provide clients with crea+ve and prac+cal solu+ons to the need for constant upgrading and changing of employee skill sets. Spain, our one remaining overseas opera+on, also achieved a substan+al increase of 45% in net revenue and a much reduced opera+ng loss of 52,000 (2014: 144,000). Penna can increasingly be seen as a developer and supplier of digital services. In every division we deliver solu+ons through a hybrid of tradi+onal and online systems. A notable example is 2 of 10 10/11/ 11:59

3 within Career Services where our industry leading face to face coaching prac+ce is complemented by our proprietary outplacement tools. "Penna Sunrise" is our key digital package and in the last year over 30,000 individuals have used it as the core element of their job search. "BeMore" is another Penna online career development tool which clients provide to their employees to support them in the management and development of their careers within the organisa+on. Similarly, within recruitment, every major project has digital elements at its core. We have a growing stream of royalty from digital and other services provided to third par+es. Penna's long term strategic objec+ve has been to become the provider of the UK's widest range of HR services with a balance of investment and profit contribu+on between a range of business streams across recruitment, talent development and career services. I am pleased that we are achieving these strategic goals and that our two major divisions are now of similar size with net revenue in the half year of 11.2m from Recruitment Solu+ons and 10.4m from Career Services. Opera+ng profits are also in balance with 1.6m from Recruitment Solu+ons and 1.8m from Career Services. Penna consistently generates cash. Cash generated from opera+ons in the period was 3.7m. The Company has no debt and cash at was 4.2m (31 March : 2.3m). Accordingly, we propose to con+nue with a progressive dividend policy and in addi+on to adopt the prac+ce of spreading dividend payments to shareholders more evenly over the year. The inten+on will be that in most years the Interim Dividend will be at the same level as the subsequent Final Dividend. Following this new policy the Board has declared an Interim Dividend at double last year's level at 4p per share (2014: 2p) which will be paid on 17 March 2016 to shareholders on the register on 19 February OperaRonal Review Con+nuing opera+ons 1 st Half /16 1 st Half 2014/15 Change Revenues Opera+ng Revenues Opera+ng Revenues Opera+ng Gross Net Profits Gross Net Profits Gross Net Profits 'm 'm 'm 'm 'm 'm % % % Recruitment Solu+ons Career Services Talent Prac+ce (0.34) n/a Spain (0.05) (0.14) n/a Unallocated - - (0.51) - - (0.54) - - n/a central costs Total Penna offers a broad range of HR services to over 1,500 clients, spanning the employment lifecycle from recruitment ac+vi+es, through assessment and development services to career transi+on and career development. The ability to combine specialist HR Services into talent solu+ons for our clients enables us to add value. This differen+ates us from others in the sector. In the first half of /16, we have seen the momentum from the previous year con+nue and grow in each of our three service groups, with net revenues up 20% and opera+ng profit increasing by 34% to 2.77m (2014: 2.07m). Recruitment SoluRons combines our exper+se in Resourcing (amrac+on and branding, communica+ons, managed recruitment and assessment), Execu+ve Search and Execu+ve Interim 3 of 10 10/11/ 11:59

4 Management. Net revenues grew significantly in the six months by 25% and profit increased by 16%. The Resourcing team had par+cular success winning and delivering a number of large scale long- term contracts providing increased visibility for our future revenue streams. The combina+on of services in this area, including amrac+on, sourcing, assessment and selec+on to support clients with specific recruitment issues, including diversity of the workforce, hard to source skills and brand challenges, means that the margins at 14% (2014: 15%) are higher than would normally be expected in volume based recruitment businesses. The Recruitment Solu+ons business con+nues to service a diverse range of clients with par+cular strength in policing and security services, local authori+es and retail. The company has a specific niche in "Transforma+on Recruitment" where we support organisa+ons, for example local authori+es, going through fundamental change resul+ng in the need for a change in the skills set of their personnel. Our Talent Management team provides services to support clients in the assessment and development of talent, specifically leadership talent. Demand for these services has been increasing as clients con+nue to recognise that their management's quality, mo+va+on and willingness to embrace con+nual change is the key to their long term success. Revenues grew 45% to 3.11m (2014: 2.15m). The division broke even in the period (2014: 0.34m loss) and we are confident that it will con+nue to grow and make a substan+al profit contribu+on in the future. Careers Services represents the pornolio of services aimed at providing clients and their employees with advice, guidance and consultancy on career direc+on and transi+on. It includes the UK's market leading Outplacement consultancy together with newer services in career development and redeployment. Penna created the UK's first Outplacement consultancy over 40 years ago and since that +me has supported over one million individuals as they made the transi+on from one phase of their career to another. Net revenue in the six months to increased 8% to 10.43m (2014: 9.65m). This growth was achieved despite a strong macro- economic environment. This demonstrates yet again that Outplacement services are in demand throughout the business/economic cycle. Globalisa+on in the Outplacement sector con+nues and we are very pleased to report that the global network we established three years ago The Career Star Group (CSG) has matured into a major compe+tor for larger interna+onal contracts. Today CSG has representa+ve members in 74 countries and serves around 7,000 corporates and other organisa+ons. Suppor+ng individuals going through a career change as a result of a redundancy is now widely endorsed by the vast majority of large employers. Outplacement is increasingly acknowledged as represen+ng best prac+ce in HR which strengthens a company's brand and reputa+on as a good employer and promotes bemer produc+vity in the workforce. For the individual impacted, the support is invaluable. Penna supported over 30,000 individuals in the last year and, of these, 88% reported geong a new role on a higher salary than the one they les. Na+onal labour sta+s+cs reported on by the OECD (ONS Data) show that on average across the UK only 29% of people made redundant return to work within 3 months. In contrast, individuals supported by Penna return to work twice as fast as the na+onal average with 60% geong a new role in less than 3 months. 4 of 10 10/11/ 11:59

5 Outlook As the UK economy con+nues to grow strongly we are seeing a significant rise in clients' expenditure on recruitment and other HR projects. Penna con+nues with impressive momentum and we remain confident of the outlook for the Group. We now believe that profit for the year as a whole will be ahead of management's original expecta+ons. Stephen Rowlinson Chairman 10 November Unaudited consolidated statement of for the six months ended Note Six Months Ended Six Months Ended 2014 Year Ended 31 March ConRnuing OperaRons Revenue 47,133 41,112 84,411 Opera+ng expenses (44,366) (39,040) (79,797) OperaRng profit 2,767 2,072 4,614 Finance Finance expense - (2) (11) Profit before tax 2,768 2,071 4,604 Income tax expense 2 (481) (392) (724) Profit ajer tax 2,287 1,679 3,880 Other Items that may be reclassified subsequently to profit and loss: Exchange differences (86) (43) (228) Other (86) (43) (228) Total for the period 2,201 1,636 3,652 Earnings per share 3 Pence Pence Pence Basic earnings per share: Earnings from con+nuing ac+vi+es 9.05p 6.64p 15.36p Diluted earnings per share: Earnings from con+nuing ac+vi+es 8.65p 6.53p 15.09p 5 of 10 10/11/ 11:59

6 Unaudited consolidated statement of changes in equity at Called up share capital Share premium account Shares held in Treasury Merger reserve ESOP reserve Foreign currency translaron reserve Accumulated Deficit Total equity At 1 April ,304 15,913 (290) 10,170 (1,090) 305 (8,992) 17,320 TransacRons with owners Purchase of shares - - (64) (64) Transfer of shares out of treasury Share op+on charge Total transacrons with owners - - (60) (14) Comprehensive Profit for the period ,679 1,679 Other Currency transla+on (43) - (43) differences Total for the (43) 1,679 1,636 period At ,304 15,913 (350) 10,170 (1,090) 262 (7,267) 18,942 TransacRons with owners Purchase of shares - - (361) (361) Transfer of shares out of treasury Dividends (896) (896) Share op+on charge Total transacrons with owners - - (201) (855) (1,056) Comprehensive Profit for the period ,201 2,201 Other Currency transla+on (185) - (185) differences Total for the period (185) 2,201 2,016 At 31 March 1,304 15,913 (551) 10,170 (1,090) 77 (5,921) 19,902 TransacRons with owners Transfer of shares out of treasury of 10 10/11/ 11:59

7 Share op+on charge Total transacrons with owners Comprehensive Profit for the period ,287 2,287 Other Currency transla+on (86) - (86) differences Total for the (86) 2,287 2,201 period At 1,304 15,913 (351) 10,170 (1,090) (9) (3,588) 22,349 Unaudited consolidated statement of financial posiron at Non- current assets Note March Goodwill 6 19,777 19,235 19,235 Other intangible assets Property, plant and equipment 2,974 2,335 2,583 Deferred tax Current assets 23,320 22,223 22,348 Trade receivables 16,930 15,597 17,075 Other current assets 1,486 2,295 1,700 Cash and cash equivalents 4,227 1,196 2,251 22,643 19,088 21,026 Total assets 45,963 41,311 43,374 Current liabilires Trade and other payables 2,995 4,600 4,545 Short- term provisions Corpora+on tax payable Other payables and accruals 5 18,504 15,251 17,062 22,293 20,894 22,082 Non- current liabilires Long- term provisions Deferred tax ,321 1,475 1,390 Total liabilires 23,614 22,369 23,472 Net assets 22,349 18,942 19,902 Capital and reserves Called up share capital 1,304 1,304 1,304 Share premium account 15,913 15,913 15,913 Merger reserve 10,170 10,170 10,170 Shares held in treasury (351) (350) (551) Employee Share Op+on Plan reserve (1,090) (1,090) (1,090) Foreign currency transla+on reserve (9) Accumulated loss (3,588) (7,267) (5,921) 7 of 10 10/11/ 11:59

8 Total equity 22,349 18,942 19,902 Unaudited consolidated statement of cash flow for the six months ended Six Months Six Months Year Ended Ended Ended Notes March Profit from conrnuing acrvires 2,287 1,679 3,880 Adjusted for: Income tax expense Finance (1) (1) (1) Finance expense OperaRng profit 2,767 2,072 4,614 Adjusted for: Deprecia+on and amor+sa+on Share op+on charge Loss on disposal of non- current assets Changes in working capital: Decrease/(increase) in trade and other receivables 1,350 (2,400) (3,283) (Decrease)/increase in trade and other payables (949) 1,066 2,638 Decrease in provisions (6) (285) (519) Net cash generated by operarons 3,703 1,006 4,481 Cash flows from operarng acrvires Income tax paid (160) (177) (834) Interest received Net cash generated by operarng acrvires 3, ,648 InvesRng acrvires Purchase of property, plant and equipment (791) (425) (1,007) Purchase of intangible assets (41) (55) (130) Purchase of subsidiary undertakings (including debt acquired) (936) - - Net cash absorbed by invesrng acrvires (1,768) (480) (1,137) Financing acrvires Proceeds from exercise of share op+ons Interest paid - (2) (11) Purchase of own shares - (64) (425) Equity dividends paid - - (896) Net cash generated/(absorbed) by financing acrvires 200 (62) (1,168) Net increase in cash and cash equivalents 1, ,343 Cash and cash equivalents at start of period 2, Cash and cash equivalents at end of period 4,227 1,196 2,251 Notes to the unaudited consolidated interim report for the six months ended 1. Basis of prepararon The unaudited condensed consolidated interim report for the period ended has been prepared under the historical cost conven+on, using accoun+ng policies that are consistent with current Interna+onal Financial Repor+ng Standards (IFRS) as endorsed by the European Union and also comply with IFRIC interpreta+on and Common Law applicable to companies repor+ng under IFRS. The condensed consolidated interim report should be read in 8 of 10 10/11/ 11:59

9 conjunc+on with the annual financial statements for the year ended 31 March, which were prepared in accordance with IFRS, as adopted by the European Union. The unaudited condensed consolidated interim report has been prepared in accordance with the accoun+ng policies adopted in the last annual financial statements for the year ended 31 March and applied consistently throughout the Group. 2. TaxaRon Taxa+on has been provided for at a corpora+on tax rate of 20% (2014: 21%), for the UK and appropriate rates for overseas earnings. The effec+ve rate of tax for the period is lower than the standard rate of tax primarily due to the u+lisa+on of brought forward trading losses for which no deferred tax asset has been recognised. 3. Earnings per share The calcula+on of basic and diluted earnings per share is based on the following amounts: Earnings for the period Six Months Ended Six Months Ended 2014 Year Ended 31 March Con+nuing ac+vi+es 2,287 1,679 3,880 Number of shares Weighted average number of shares 25,283,207 25,265,634 25,256,136 Dilu+on effect of share op+on schemes 1,141, , ,834 Diluted weighted average number of shares 26,424,310 25,696,950 25,714,970 Notes to the unaudited consolidated interim report (conrnued) for the six months ended 4. Dividends An interim dividend of 4.0 pence per ordinary share has been declared (2014:2.0p) for the six months ended. This will be paid on 17 March 2016 to shareholders on the register on 19 February Other payables and accruals March Media and associate accruals 11,189 8,938 9,168 Overhead accruals 1,486 1,228 1,639 9 of 10 10/11/ 11:59

10 Other accruals 2,012 1,279 1,634 Taxes and social security 1,825 1,711 2,085 Deferred 1,992 2,095 2,536 Total 18,504 15,251 17, Provisional Goodwill On 29 June Penna acquired the issued share capital of Career Café Limited for cash considera+on of 309,000. The provisional fair value of net liabili+es acquired was 83,000, resul+ng in provisional goodwill of 392,000. On 30 June Penna entered into an Asset Transfer Agreement with CIPFA Business Limited which included the purchase by Penna of the recruitment business involved in financial professionals on a permanent and interim basis carried on by CIPFA for total cash considera+on of 150,000. The provisional value of net assets acquired was nil, resul+ng in provisional goodwill of 150, Nature of the financial informaron The unaudited condensed consolidated interim report for the period ended 30 September does not cons+tute the full statutory accounts for that period within the meaning of sec+on 434 the Companies Act The financial informa+on for the year ended 31 March has been extracted from the statutory accounts for that year, which have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for was unqualified, did not draw amen+on to any mamers by way of emphasis, and did not contain a statement under sec+on 498 of the Companies Act Copies can be obtained from the Company's Registered Office at 5 Fleet Place, London EC4M 7RD. The Board of Directors approved the Interim Report on 10 November. The financial informa+on in respect of the six months to is unaudited. This information is provided by RNS The company news service from the London Stock Exchange END IR UKRWRVBAARAA 10 of 10 10/11/ 11:59