The Rethink Group announce trading update & contract win
Following a turn-around year in 2013 when the Group returned to profitability, Rethink continues to build on this platform with earnings to 30 June 2014 expected to be in line with expectations. Net Fee Income ("NFI") from continuing operations increased by 4% and Group PBT is expected to be ahead of the same period in 2013.
The Group continues to invest in its growing Talent Management division and a number of experienced sales and management executives joined the team during the period. Personnel investments, together with the cost of the recent move into a new flagship head office in London, are estimated to amount to £0.4m in H1 2014. As anticipated, underlying EBITDA from continuing operations is marginally lower than the same period in 2013 (excluding 2013 exceptional items), due to the combined investments.
In July Rethink was delighted to secure a three year talent management contract renewal with M&S. More recently the Group also signed a new three year contract with a UK listed multi-channel marketing and communications business.
Net debt as at 30 June 2014 is expected to reduce by 20% to £9.3m (£11.7m at 31 December 2013). The Group's debt is wholly attributable to its revolving invoice discounting facility.
Steve Wright, CEO of Rethink, commented: "We are pleased to report that progress continues to be made with the implementation of our stated strategy to reposition Rethink as a Talent Management led service group, with a strong core recruitment division. Securing new and renewed Talent Management contracts from major blue chip clients such as M&S underlines our value proposition as a trusted partner, and endorses the Group's strategy as we build further investment in this division. To achieve this, whilst maintaining NFI growth and earnings in line with expectations, is encouraging. We look forward to providing a further update at the time of the Group's interim results in September."