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CPL - Full Results

CPL Resources plc, Ireland's leading employment services group, today announced full year results for the year ended 30th June 2009.

Financial Highlights

2009

2008

Sales

212.4 m

257.6 m

Net Fee Income

35 m

52.5 m

Operating profit

0.14m

19.8m

Adjusted operating profit ***
Profit before tax

8.2m
1.7m

19.8m
20.7 m

Basic earning per share
Diluted Earnings per share
Adjusted diluted earning per share

1.7 cent
1.7 cent
23.4 cent

48.3 cent
48.3 cent
48.3 cent

Conversion ratio ***

27.9%***

39.4%

Net Cash

42.5 m

37.6 m

Dividend per share

3.0 cent

5.0 cent

*** Note this is shown before impairment of goodwill and intangible assets
*

John Hennessy Chairman of the Group said "The year to 30 June 2009 has been unprecedented in many respects. Economies around the globe have ceased to grow, many have contracted and corporate performance and the confidence of businesses and consumers have fallen in most parts of the developed world.

I am pleased to report that, notwithstanding these challenging circumstances, Cpl has been able to respond in a decisive and disciplined way that has allowed us to remain profitable, to reorganise our operations and reduce costs without compromising service levels, to avail of appropriate opportunities to acquire businesses, to develop new products in response to changing market conditions and to protect and enhance our strong balance sheet.

We expect that the environment in which we operate will continue to be difficult over the coming months. Accordingly, the level of uncertainty remains such that it is not possible to predict our future performance with any accuracy. However, Cpl will continue to deliver excellent service while managing our cost base carefully. "

Commenting on the group's performance and outlook, Cpl Chief Executive, Anne Heraty, said: "Our results are better than might have been expected considering the difficult economic and employment conditions in the markets in which we operate. Our business in the year to June 2009 reflected the economic and labour market conditions. All our divisions felt the impact especially in the second half of the year as many of our customers dramatically slowed down hiring on a permanent basis.

We achieved many of our business objectives and I am proud of the performance of the Cpl team. As outlined in last year's annual report our business objectives as we entered the year to June 2009 were clear stay close to our customers, keep our temporary employees in jobs, gain market share and expand internationally while also managing our cost base and maintaining a lean and flexible structure.

We can expect to see an improvement in the economy before we see an improvement in the jobs market. Past cycles indicate that we could see a prolonged period of rising unemployment. This suggests that demand for recruitment services will be weak through 2010. We have significantly reduced our cost base and repositioned our business. The Group has a strong Balance Sheet and we are committed to managing the business for the long term."

Chairman's Statement
The year to 30 June 2009 has been unprecedented in many respects. Economies around the globe have ceased to grow, many have contracted and corporate performance and the confidence of businesses and consumers have fallen in most parts of the developed world.

Our business is inextricably linked to the economic cycle in the markets in which we operate and tends to be affected quickly by changes in those markets. This is because decisions related to the recruitment and retention of people are among the first to be influenced by increases and decreases in economic activity. As the current global economic downturn has gathered pace, the inevitable reduction in recruitment activity has had a negative impact on the trading and financial performance of the Cpl Group. The challenge for us has been to anticipate, prepare for and react appropriately to this significant reduction in activity.

I am pleased to report that, notwithstanding these challenging circumstances, Cpl has been able to respond in a decisive and disciplined way that has allowed us to remain profitable, to reorganise our operations and reduce costs without compromising service levels, to avail of appropriate opportunities to acquire businesses, to develop new products in response to changing market conditions and to protect and enhance our strong Balance Sheet.

In the twelve months to 30 June 2009 fees from our permanent placement business fell by 50% to 12.2 million, and we generated a gross profit of 22.3 million from our temporary business in the same period, a reduction of 20%. Despite these reductions, we achieved an adjusted operating profit of 8.2 million. When we include the net interest earned of 1.5 million the profit before tax and impairment charges for the year was 9.7 million. This performance represents a considerable achievement in very difficult circumstances and is a testament to the hard work, dedication and innovation of our management and staff.

As might be expected, the reduction in business activity caused by the economic 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 that arose from the acquisitions of certain businesses in recent years. The total impairment charge required on foot of this review is 8 million.

The strength of Cpl's Balance Sheet is demonstrated by the reported cash balance of 42.5 million at 30 June 2009. Our debtor days remain at 35.6 days, similar to last year, and we remain focused on ensuring that cash is collected from debtors as quickly as possible. As a result, we have not experienced any significant increase in levels of bad or doubtful debts.

I am particularly grateful to everyone who has worked with Cpl in a very challenging year. We are operating in more difficult times but we are fortunate to have a group of highly skilled and motivated people who are committed to the Group and are constantly looking for new ways to deliver value and outstanding service to our clients and candidates. I would also like to extend the appreciation of the Board to our customers for their continued loyalty and support.

The Board is recommending a final dividend of 1.5 cent per share. This will bring the total dividend for the year to 3 cent. The dividend will be payable on 27 November 2009 to shareholders on the company's register at the close of business on the record date of 13 November 2009.

Outlook
As I write, commentators are suggesting that the worst of the economic downturn is behind us in the principal markets in which we operate. Our recent experience on the ground indicates that these observations may be somewhat optimistic, and we expect that the environment in which we operate will continue to be difficult over the coming months. Accordingly, the level of uncertainty remains such that it is not possible to predict our future performance with any accuracy. However, Cpl will continue to deliver excellent service while managing our cost base carefully. We believe that our market position, our outstanding people and our strong Balance Sheet will allow us to remain successful in the short term and to avail of the opportunities that will present themselves as and when market conditions improve.

John Hennessy
Chairman

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