Prime People Plc Unaudited Condensed Consolidated Interim Report
Prime People Plc
Unaudited Condensed Consolidated Interim Report
for the six months ended 30 September 2011
Prime People Plc ("Prime People" or the "Group"), the focused international recruitment Group specialising in the built environment, customer insights and energy & environmental sectors, today announces its unaudited interim results for the six months ended 30 September 2011.
· Group Net Fee Income ('NFI') increased by 8% to £4.3m (2010: £4.0m)
· UK permanent NFI increased by 18% to £2.6m (2010:£2.2m)
· Asia NFI increased by 55% to £0.9m (2010: £0.6m)
· Energy & Environment business expanded into Asia
· Start up in Pharmaceutical Research sector showing encouraging early performance
· Profit before tax increased by 23% to £0.5m (2010: £0.4m)
· Interim dividend increased by 5% to 1.84p per share (2010: 1.75p)
· Basic earnings per share increased by 26% to 3.03p (2010: 2.41p)
Peter Moore Managing Director of Prime People, commented:
"These figures are a testament to the hard work and quality of our staff."
"Our performance has allowed us to generate meaningful profits whilst continuing to invest in our businesses. With an increase in staff of 14% in key locations and sectors we are well placed to exploit opportunities as they emerge".
I am pleased to report that the Group has delivered a good performance in the half-year ended 30 September 2011.
Group Net Fee Income ('NFI'), which, after profit, we consider the most important indicator of performance, rose by 8% over the period. This rise was driven by our permanent businesses, which have shown strong growth in the UK and Asia, with the UK increasing NFI by 18% to £2.6m and Asia increasing NFI by 55% to £872,000 compared to the comparable period last year.
Market confidence across our businesses has varied from region to region. This is reflected in the reduction in NFI recorded by our Middle East and South African offices where NFI has reduced by 26% to £448,000. Our temporary business in the UK, which, for the most part, recruits into the Public Sector, continued to suffer from public sector cuts and experienced a 38% decline in NFI to £365,000.
Prime Insight, our London based customer insights recruitment consultancy, which serves the market research industry, is making an increasingly valuable contribution to NFI contributing in excess of 10% to NFI. We continue to see the business as having considerable potential.
We have made good progress with the development of our businesses in the Energy & Environment and the Pharmaceutical Research recruitment sectors with both businesses making positive contributions to the Group. Our Energy & Environmental recruitment business now has dedicated fee earners in Hong Kong as well as the UK and UAE.
Permanent recruitment now represents 92% of group NFI compared to 85% in the comparable period last year.
During the period, 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 14%.
Group revenue declined by 8% for the period to £6.6m due to the reduction in temporary business (2010:£7.2m).
NFI increased by 8% to £4.3m (2010:£4.0m).
The combination of increasing NFI, reduction in bad debt provisions required by the business and efficient cost control resulted in a 23% increase in profit before taxation for the period to £0.5m (2010:£0.4m).
In the period the UK and Asia increased profit before taxation by 33% to £0.6m whereas losses from the Rest of World increased to £0.1m.
The charge for taxation is based on the expected annual effective tax rate of 28% (2010:30%).
Basic earnings per share for the period increased by 26% to 3.03p (2010:2.41p).
The Group maintained a strong net cash position of £2.9m (2010:£2.5m) at the end of the period. Cash generated from operating activities in the period amounted to £0.2m (2010:£0.6m), which, after capital expenditure of £0.05m (2010:£0.1m) and a dividend payment of £0.3m (2010:£0.2m), resulted in a net cash outflow of £0.2m (2010: inflow of £0.1m).
Given the level of trading seen in the first half of 2011 and the strong net cash position of the business,
the Board has declared a dividend of 1.84p (2010:£1.75p) payable on 25 November 2011 to shareholders whose names are on the register on 18 November 2011.
Subject to economic circumstances in the regions in which we operate not deteriorating further we expect the permanent recruitment businesses to perform in the second half in line with NFI levels achieved in the first half. We are not anticipating any meaningful growth in our temporary business in the foreseeable future.
We will continue to invest in our Asia operations and will consider re-investing in the Middle East market if opportunities arise and confidence and stability return to the region.
We are pleased with the performance of our new business initiatives. We will continue to invest in these and seek further opportunities to enter new markets.
We believe that the action taken in prior years to ensure our business is appropriately sized and structured to meet the levels of expected business has proved effective and has allowed us to make meaningful profits and to invest in new businesses.