CPL Maintains Focus
Cpl is pleased to report profits before tax and impairment charges of 6.022 million for the six months ended 31 December 2008. This result has been achieved against an extremely challenging business and employment background in our principal markets.
Since 30th June 2008 the global economic downturn has gathered pace, adversely affecting business performance and employment activity in Ireland and in many other parts of the world. The confidence of employers and job candidates has been adversely affected by the downturn and this has had a negative impact on the trading and financial performance of the Cpl Group. We are experiencing a significant reduction in activity as businesses retrench and potential job candidates defer possible job changes, and it has become more difficult to forecast future performance accurately.
Notwithstanding these developments, Cpl continues to be the leader in a highly competitive environment. Although we have reduced our costs significantly, we are maintaining our focus on the delivery of valuable products and quality services to our clients and candidates.
In the six months to 31 December 2008 Group net fee income fell by 26% when measured against the same period last year, reflecting the deterioration in market conditions in most of the countries in which we operate. Net fee income from the permanent placement business decreased by 40% in the six months to December 2008. Net fee income in our temporary placement business, which has been more resilient to date across most of the group, fell by 10%. The pace of the fall in net fee income accelerated during the six months to 31 December 2008.
Cpl has reacted quickly and decisively to the downturn in business caused by the worsening economic environment. We are continuing to respond appropriately to these challenges by managing our cost base, focusing on cash generation and maximising our opportunities in both the temporary and permanent placement markets. The Group had cash balances of 36.4 million at 31 December 2008, and our net cash position has improved further since that date. Our balance sheet remains strong.
In the period since we issued our trading statement in December 2008 we have taken the opportunity to review the carrying value of Goodwill in our balance sheet. Although our annual impairment review was not due to be undertaken until mid-2009, we decided to conduct such a review now in the context of the current business environment. As might be expected, the reduction in business activity caused by the downturn, combined with the uncertain trading conditions facing us in the near future, have given rise to the need to recognise impairments in the carrying values of goodwill arising from the acquisitions of certain businesses in recent years. The total impairment charge required on foot of this review is 4.5 million, and the Board has decided that it is appropriate to record this charge in the six month period to 31 December 2008. A further impairment review will be conducted in connection with the preparation of our financial statements for the year to 30 June 2009.
The continued success of CPL Resources plc, notwithstanding the difficult trading conditions, is attributable in the main to our entire team and to their tireless dedication to providing a service of exceptional quality. It is also a result of the loyalty and partnership approach of our clients. We are grateful to our clients for their support and their creative approach to doing business.
The Board is recommending an interim dividend of 1.5 cent per share. The dividend will be payable on 13th March 2009 to shareholders on the company's register at the close of business on the record date of 13th February 2009.