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EMPRESARIA GROUP PLC Results for the year ended 31 December 2011

EMPRESARIA GROUP PLC Results for the year ended 31 December 2011

Good performances from UK and Rest of the World regions. Performance in Continental Europe impacted by previously highlighted issues in Germany, but overall business model has shown resilience and there are encouraging opportunities for growth.

Financial Highlights



% change

% change (constant currency)






Net fee income





Operating profit




Adjusted operating profit*




Profit before tax




Adjusted profit before tax*




(Loss)/earnings per share




Adjusted earnings per share*




&middot 21% growth in permanent revenue

&middot Temporary revenue flat year on year

&middot Net fee income growth of 1%

&middot Conversion ratio declines to 11% (2010: 16%)

&middot Exceptional charge of &pound1.7m for potential retrospective pay claims in Germany following legal rulings on collective bargaining agreements, reduced from &pound3.0m at the half year

&middot Net debt of &pound5.6m at year end (2010: &pound6.1m), after investing &pound2.1m in working capital and &pound1.3m on purchasing minority shares

* Adjusted results exclude amortisation of intangible assets, movements on values of put and call options and exceptional items.

Operational Highlights

&middot Operational focus on delivering organic growth from our existing operations

&middot Net fee income growth in two out of three reporting regions

o 19% in Rest of the World

o -10% in Continental Europe

o 5% in UK

&middot New offices established in Singapore, Australia and China

Tony Martin, Chairman of Empresaria, commented:

"The UK and Rest of the World regions grew net fee income by 5% and 19% respectively. However, the Group as a whole experienced a 1% growth in revenue and net fee income, with adjusted profit before tax down 32% to &pound4.5m and adjusted EPS down 35% to 4.0p. The major reason for this was lower profits in Germany, where the adoption of new collective bargaining agreements, following court rulings, required us to increase the pay rates for some of our temporary workers and to incur significant legal fees. This has had a negative impact on margins and while we have seen an improvement in gross margin over the second half of the year, it still remains below historic levels. We have obtained greater clarity on the potential exposure against retrospective pay claims from temporary workers and social security contributions in relation to these court rulings. This has lead us to reduce the provision that we made at the half year of &pound3.0m to &pound1.7m at the year end, reflecting the lower expected exposure.

Global economic conditions remain uncertain and, while we continue to see generally good candidate and client demand, confidence is fragile and necessitates a cautious approach, especially in the UK and Continental Europe. The Group trades in many emerging markets across the world and we see opportunities for organic growth across these regions and expect to see improved returns for the year ahead."


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