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Norman Broadbent restructuring herlads record start

- Results reflect start-up losses in emerging businesses and the exceptional costs associated with regaining control of the Norman Broadbent brand worldwide

- Group revenue from continuing operations increased by 11% to &pound7.6m (2013: &pound6.8m)

- Gross profit from continuing operations increased by 6% to &pound7.1m (2013: &pound6.7m)

- UK executive search operating profit increased by 273% to &pound525,000 (2013: &pound141,000)

- Revenue from our new subsidiary businesses, AGP, NBIM and SMS increased to &pound1.8m (2013: &pound0.6m)

- Group operating loss from continuing operations decreased to &pound932,000 (2013: loss of &pound1,156,000) reflecting the continued investment in the new subsidiary businesses

- The Group raised &pound500,000 in November 2014 through a share subscription

- Year end cash of &pound506,000 (2013: &pound579,000)

- Net assets &pound1,690,000 (2013: &pound2,800,000)

- Group successfully restructured in 2014

- Group returned to profitability in Q1 2015


Group revenue from continued operations increased by 11% to &pound7.6m (2013: &pound6.8m), with gross profit increasing by 6% when compared to 2013. Group operating losses from continued operations were &pound0.9m (2013: &pound1.2m) reflecting continued investment in the start-up businesses AGP, NBIM and SMS. The loss after tax, pre-exceptional items and minority interests, was &pound1.1m (2013: &pound1.2m) including &pound0.9m of losses attributable to the start-up businesses.

Executive search revenue of &pound5.2m (2013: &pound5.6m) reflects a fall of 8% in UK executive search revenues to &pound5.0m from &pound5.4m in 2013 and an increase of 59% in overseas executive search revenues to &pound0.3m from &pound0.2m in 2013. The UK executive search revenue decline was offset by a decrease in operating

costs resulting in a considerable improvement in profit before tax to &pound0.5m from &pound0.1m in the previous year.

Assessment, coaching and talent management revenues declined by 59% to &pound0.5m (2013: &pound1.1m) reflecting the sale of our Belgium subsidiary Norman Broadbent SPRL in May 2014. The UK business, Norman Broadbent Leadership Consulting ("NBLC"), has been restructured and is now further integrated with UK executive search and continues to have a high quality product range and is attracting exciting new clients.

AGP, SMS and NBIM, the three subsidiary businesses established in early 2013, late 2012 and mid 2014 respectively, have between them generated &pound1.8m in revenue (2013: &pound0.6m). Despite the promising revenue growth, the start-up losses in AGP and SMS were greater than anticipated and resulted in the re-modelling of certain aspects of the contingent offering within AGP and SMS in late 2014.

Revenue from overseas royalties totalled &pound0.1m (2013: &pound0.2m), a decline of 64% as a result of the licenses with Italy, Middle East and Spain being terminated due to the Board's decision to regain complete control of the Norman Broadbent brand worldwide. This has allowed your Company to streamline its international operations, refocussing on our core UK businesses. Further, your Board has taken the decision to cease its operations in Singapore and, since year end, also in the USA due to de-minimis contributions to Group revenues.


As part of the Board's decision to regain complete control of the Norman Broadbent brand worldwide, in 2014 the Group disposed of Norman Broadbent SPRL (which had a minority 49% shareholder) and its 20 per cent stake in NBS Norman Broadbent SA for &pound120,000 and &pound92,000 respectively. These disposals resulted in a non-recurring exceptional item, shown as a decrease in

goodwill of &pound559,000 in the Consolidated Statement of Financial Position, and a loss on disposal of &pound36,000 in the Company Statement of Financial Position.


In November 2014, the Group raised &pound500,000 (&pound487,500 net of expenses) through the issue, principally to existing institutional investors, of 2,617,801 new ordinary shares in the capital of the Company at a price of 19.1 pence per share (the "November Subscription"). The net proceeds of the

November Subscription have been used to fund the recent re-modelling of certain aspects of the contingent offering within AGP, NBLC and SMS, and for working capital purposes generally.


As at 31st December 2014, consolidated net assets were &pound1,690,000, compared to &pound2,800,000 as at 31 December 2013. Group net current assets decreased to &pound278,000 (2013: &pound762,000). Group cash amounted to &pound506,000 (2013: &pound579,000).

Net cash outflow from operations in 2014 was &pound453,000 (2013: &pound732,000). The start-up losses arising from the development of AGP, NBIM and SMS resulted in a cash outflow of &pound869,000. Net cash inflow from financing activities amounted to &pound358,000 (2013: &pound521,000) relating primarily to the net

funds received from the November Subscription.

At 31st December 2014, the only exposure to borrowings was the Group's revolving invoice discounting facility, and funds drawn down against this facility decreased by 16% to &pound673,000 (2013: &pound802,000) against UK trade receivables of &pound999,000 (2013: &pound1,255,000).


James Webber, Group CFO and COO, joined the plc Board in September 2014. James joined the business in March 2014, and his experience working within the COO office at EY has proved invaluable to the Company. The Group now comprises just under 80 people in the UK and your Board would like

to express its thanks to all our management teams and staff, particularly in view of the diversification programme taking place through our new complementary subsidiaries.


In light of the successful re-modelling which has taken place since the November Subscription, I have taken the view that after five years as Chairman the time is now opportune to retire from the business as it is now refinanced, refocused and returned to profitability in the first quarter' of

2015. It is my intention to retire from the Board as Chairman and director on 30 June 2015.

In view of my wide industry experience, the Board is pleased to note that I have offered to nominate through my private investment office a Non-Executive Director to the Board to assure staff, shareholders and clients of my continuing interest, and to represent my substantial shareholding.

In order to achieve a seamless handover on my retirement the Board and I have been in discussion for some time with the Chairman elect, Scanes Bentley. Scanes, who is being co-opted to the Board with immediate effect, is a Non-Executive Chairman, Non-Executive Director and strategic advisor to a number of businesses and most recently was a partner for 12 years at Accenture where in the last five years he was responsible for running Financial Services and TMT consulting practices in London.

Further, Bruce Lakefield retired as a Non-Executive Director of the Company on 10 March 2015. Bruce, who is aged 71 and resident in the United States is reducing his overseas activities. Finally, Jan Cameron, who in addition to her role on the Board headed the Group's internal HR function,

left the business in April 2015 to pursue her portfolio career. The Board wishes to express its gratitude to both Bruce and Jan for their considerable contributions to the business. As a result, the Board has taken the opportunity to streamline its reporting structure and has appointed a new HR

executive to take account of our changing requirements who reports to James Webber as the Group COO.


I am pleased to report that in the first quarter of 2015, both revenue and profitability has exceeded management's expectations. The Board is encouraged and looks to the future with some confidence.


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