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Another Successful year for Networkers International

Another Successful year for Networkers International

The Board of Networkers International Plc, the AIM-listed international recruitment company, is pleased to announce final results for the year ended 31 December 2012.

Financial Highlights

• Net fee income (gross profit) increased by 1.6% to &pound30.79m (2011: &pound30.31m)

• Adjusted* pre-tax profits for the year increased by 6.2% to &pound7.03m (2011: &pound6.62m)

• Pre-tax profits of &pound5.68m (2011: &pound6.60m)

• Adjusted* EPS (basic earnings per share) increased by 11.4% to 4.70p (2011: 4.22p)

• Conversion ratio improved to 23.7% (2011: 22.8%)

• Permanent net fee income has shown growth of 19.5% for the year, more than offsetting the modest reduction of 2.8% in contract net fee income. Permanent placements represent 20.9% (2011: 17.6%) of net fee income

• Favourable change in sales mix has resulted in gross profit margins increasing to 18.0% (2011: 16.0%)

• Operating cash inflow of &pound6.0m for the year

• Net debt relating entirely to drawdown on invoice discounting for working capital purposes has been reduced to &pound6.9m (2011: &pound9.1m), after making payments for own share purchases and dividend payments totalling &pound3.0m

• Strong balance sheet and good liquidity with net assets of &pound19.7m and net current assets of &pound14.2m and

• A recommended final dividend of 0.65p per share giving a total of 1.25p per share for the year (2011: 1.00p per share) being a 25% increase on prior year.

Operational Highlights

• Share of net fee income derived from markets outside of the UK totalled 71%

• Successful expansion of specialist IT and Energy & Engineering divisions into the Group's International offices

• Group headcount totalled 371 (2011: 367) as at year end with employees located in overseas offices now representing 45% (2011: 40%) of Group total headcount and

• Offices operational in UK, South Africa, UAE, China, Malaysia, Mexico, Brazil, USA and Canada

Commenting on today's results, Spencer Manuel, CEO, said "Overall, 2012 has been another successful year for the Group with growth achieved in net fee income and underlying earnings. This is especially pleasing given the backdrop of a challenging global economic environment."

In the Group's mobile telecoms division which represents 56% of net fee income we did experience a softening in market conditions going into the second half of the year. Market conditions did stabilise during the last quarter of 2012 and this has continued into 2013.

2012 was clearly a challenging year for the staffing industry as a whole. Despite this, the Group has successfully continued its international expansion strategy within IT and Energy & Engineering sectors, to complement our existing offerings within mobile telecoms.

We have started 2013 in line with management expectations whilst overall market conditions are broadly unchanged from Q4 2012. There remain a number of opportunities for growth within our existing business and we are very well placed to benefit from any improvements in market conditions and from the global investment expected for the upgrade in mobile networks to accommodate 4G networks."

* adjusted for the add back of amortisation of intangible assets, litigation costs and share based payments and, for 2011 only, the deduction of unrealised profits arising on business combinations. For the adjusted EPS calculation, the year end number of shares of 83,535,269 2011: 89,053,953) have been used.


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