Energy & engineering best performing sector for Networkers International
· Permanent placements represent 28% (2013: 26%) of net fee income and contract placements 72% (2013: 74%)
· Change in contract sales mix has resulted in gross profit margins reducing to 17.0% (2013: 18.5%)
· Strong balance sheet with net assets of £20.1m and net current assets of £13.0m
· Net cash inflow from operating activities of £0.8m (2013: £2.7m)
· Net debt relating entirely to drawdown on invoice discounting for working capital purposes, increased to £5.7m from £3.0m at the start of the year (June 2013: £5.9m). This is after making minority interest share purchases totalling £1.0m, a bolt on acquisition for £1.2m and dividend payments of £0.84m and
· The Group maintains its progressive dividend policy with an increase of 14.3% in the interim dividend resulting in an interim dividend of 0.80p per share totalling £0.67m (2013: 0.70p per share totalling £0.58m).
· Share of net fee income derived from markets outside of the UK marginally reduced to 68% (2013: 70%)
· Overall group headcount has increased by approximately 5% since the start of the year to coincide with improving market conditions within the Group's Telecoms division which has seen month on month growth from the January 2014 low point
· Once again, a stand out performance in the Energy & Engineering division both within the UK and the Middle East resulting in its net fee income increasing to 16% (2013: 11%) of the Group's total, following net fee income growth of 33% for the period (45% growth on a constant currency basis) and
· Bolt on acquisition made just prior to the period end to provide a platform to accelerate our growth in the oil and gas sector.
Commenting on today's results, Spencer Manuel, CEO, said, "As expected, during the first half of 2014 we traded in line with prior period on a constant currency basis. The reported results have been impacted by adverse currency movements for the Group, with much of the Group's international business being conducted in currencies other than sterling which has strengthened by 9% compared with the corresponding period last year.
"Whilst during the first quarter of the year, the telecoms contract market remained subdued and below the levels of the previous year, the Group has seen an improvement in performance since the start of Q2 with the telecoms contract division showing month on month growth this calendar year from the low point in January 14. This, coupled with more positive sentiment in terms of future investment expectations from our key telecoms clients, gives us more confidence that the current growth momentum can be maintained in this division.
"Our IT division has traded in line with the corresponding period last year with weakness in our Banking team holding back growth in our IT Specialist Markets division.
"I am pleased to report another strong performance from our Energy & Engineering division which has grown net fee income by 33% compared to last year and now represents 16% of our net fee income up from 6% just two years ago.
"Trading in all three sectors has shown growth in recent weeks and the business as a whole is up on last year over the past three months, even after taking into account the adverse currency effect. If this recent performance is sustained throughout the year we will be able to close some of the deficit caused by currencies compared to prior year and set us up well for strong growth in 2015 and beyond."