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A Challenging Year For The Rethink Group plc

A Challenging Year For The Rethink Group plc

The Rethink Group plc has  announced its final results for the year ended 31 December 2012.

Financial highlights

&sect EBITDA* of &pound0.2m (2011: &pound2.3m) reflecting increased personnel costs
&sect Revenue increased 15.6% to &pound91.2m (2011: &pound78.9m)
&sect Loss from operations &pound0.5m** (2011: profit &pound2.1m)
&sect Net Fee Income ("NFI") increased to &pound20.1m (2011: &pound18.1m)
&sect Talent Management NFI increased to &pound4.1m (2011 restated: &pound2.6m)
&sect Net borrowings*** increased to &pound11.3m (2011: &pound7.1m) due to working capital requirements
&sect Cash absorbed by operations &pound3.1m (2011: generated &pound0.3m)
&sect Adjusted basic loss per share before separately identifiable items of 0.436 pence (2011: earnings of 1.422 pence)
&sect New &pound20m banking facility agreed with Bank Leumi post the financial year end, replacing existing arrangements
* Before separable items which include goodwill impairment of &pound0.4m (2011: nil) and reduction of acquisition consideration of &pound0.2m (2011:&pound0.8m)
** After deducting goodwill write down of &pound0.4m against investment in Singapore
*** Net borrowings are cash at bank less bank borrowings under Invoice Discounting arrangements

Operational highlights
&sect Recruitment
- Growth in contractor numbers to a record 894 (2011: 837) and permanent recruitment also at record levels
- Launched a retail specialist business to service growing retail client base
- The Berkley Group grew its contractor numbers to over 200 in 2012 (2011: 155)
&sect Talent Management
- Awarded "Overall Key Supplier of the Year 2012" by a leading UK retailer, for the second consecutive year
&sect Technology Services
- Aiimi, the technology services offering, achieved record revenues of &pound3.9m (2011: &pound3.8m)
- Signed an agreement with SAP the Group is now an official certified delivery partner
&sect The Group implemented and completed a restructure of all operations in the second half of 2012
&sect Revised Group strategy developed and in the early stages of implementation

Steve Wright, Interim CEO of Rethink plc, commented:  "These results reflect a challenging period for the Group however the operational progress achieved clearly demonstrates the quality of the Rethink offering. Over expansion during the first half of the year resulted in the Group having to quickly undertake remedial steps to restore it to expected levels of profitability. A revised strategy is being implemented to develop and expand the Managed Service offerings to reflect a rapidly growing market opportunity and better position the Group to optimise medium to long term growth."

"The Board has now undertaken an extensive review of the Group's operations and processes and as a result I am confident we now have a strong platform, with an excellent and loyal client base, to support our growth plans."

"I am pleased to report that Rethink is trading profitably in the new financial year, with results from the first quarter in line with management expectations."


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