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The Rethink Group plc Increase in revenues and return to profitability

The Rethink Group plc Increase in revenues and return to profitability 

The Rethink Group (AIM: RTG), one of the UK's leading Recruitment, Talent Management and Technology Services companies, is pleased to announce its interim results for the six month period ended 30 June 2013.

H1 2013 Financial Highlights

&sect Revenue increased 27.4% to &pound56.2m (H1 2012: &pound44.1m)
&sect Gross Profit (Net Fee Income or "NFI") remained relatively consistent at &pound10.5m (H1 2012: &pound10.4m)

&sect Recruitment NFI increased by 5.5% to &pound7.7m (H1 2012: &pound7.3m)

&sect Operating costs reduced to &pound9.8m (H1 2012:&pound10.0m), and include non-recurring costs of &pound0.3m

&sect Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") before non-recurring items of &pound1.12m (H1 2012: &pound0.59m) 

&sect Profit Before Tax ("PBT") of &pound0.53m (H1 2012: &pound0.30m) 

&sect Invoice discounting liability less cash of &pound13.3m (FY 2012: &pound12.0m, H1 2012: &pound8.3m)

&sect Basic earnings per share 0.3744 pence (H1 2012: 0.2407 pence)

 Divisional Review

&sect Talent Management

-    Revenues increased 21% to &pound17.4m (H1 2012: &pound14.4m) and NFI fell by 10% to &pound1.8m (H1 2012: &pound2.0m) reflecting a one-off permanent project in 2012  

&sect Recruitment

-    Revenues increased 34% to &pound36.6m (H1 2012: &pound27.4m) and NFI increased by 6% to &pound7.7m (H1 2012: &pound7.3m) due to a change in the business mix in favour of contract business

&sect Careful performance management lead to a headcount reduction from 260 at 30 June 2012 to 210 at 30 June 2013 with a corresponding reduction in operating costs. All other discretionary costs were also reviewed and managed appropriately.

&sect Technology Services

-    Revenues fell by 4% to &pound2.16m (2012: &pound2.25m) and NFI reduced to &pound0.88m (2012: &pound1.1m)

Steve Wright, Chief Executive Officer of Rethink, commented: "After the challenges experienced by the Group during the second half of 2012, I am delighted to report that Rethink has moved back into profit. This rise in profitability is attributable to an increase in Net Fee Income alongside the managed reduction in operating costs."

"The Board is now focussed on progressing the implementation of the revised Group strategy of growth driven by the Talent Management division, underpinned by the Recruitment division."

"Trading has continued to improve over the summer months, and the Board is confident that the building blocks are in place to enable the Group to pursue its strategy through a combination of sustained organic growth and selective acquisitions."


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