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Cpl revenues up 6% YoY in H1 2016

Cpl Resources Plc has released its results for the six months ended 31st December 2016.

During the six months ended 31st December 2016, Cpl experienced further improvements in trading conditions in certain markets. Revenues for the six months to 31st December 2016 increased by 6% to €228.7m. The company’s gross profit increased by 6% against the same period last year to €36.2m. The Group's adjusted operating profit, which excludes non-cash foreign exchange and LTIP charges, was €9.0m for the six months to 31st December 2016, a 6% increase on the same period last year.  Its conversion rate of gross profit to operating profit (excluding LTIP & foreign exchange) was 24.8% in the period.

The foreign exchange charge of €0.5m in the period was mainly due to the accounting translation of sterling into euro, as a result of fluctuations in the sterling exchange rate following the Brexit vote. The foreign exchange charge was €0.1m for the period to 31st December 2015. The non-cash LTIP charge was €0.4m in the six months to 31st December 2016 and €0.9m in the six months to 31st December 2015. The LTIP charge for the six months to 31 December 2016 reflects current expectations in relation to the achievement of performance targets included in the LTIP awards.

The Group delivered a 9% increase in earnings per share to 23.0 cent for the six months to 31st December 2016.

The Group says it continues to work with clients to understand their specific requirements and with its candidates in order to match their skills to those client requirements. The proportion of its net fee income that is made up of permanent fees has reduced from 40% in the same period last year to 37%, mainly as a result of longer lead times in appointing nursing staff in the UK following regulatory changes.  The temporary staffing market remains highly competitive but Cpl has seen some margin improvement.

The company continues to grow and develop its people within the Group and on behalf of the Board.

The strength of its Balance Sheet reflects the positive cash-generating capability of Cpl. The Group has a cash balance of €35.2m as at 31st December 2016 (December 2015: €27.6m). In the six months to 31st December 2016 €9.0m was generated in cash flow from operating activities before tax and changes in working capital. Although Cpl’s business requires significant investment in working capital, it recorded a net cash inflow of €2.2m in the period.

The Board proposes to pay an interim dividend of 5.75 cent per share, an increase of 10% on last year's interim dividend, reflecting the Group's strong performance in the period.  The interim dividend will be payable on 3rd March 2017 to shareholders on the register at the close of business on the record date of 3rd February 2017.

In the six month period to 31st December 2016 Cpl has seen continued organic growth across many of its key business sectors. Political and economic events globally during the period to 31st December 2016 have had limited impact on its key sectors, except for foreign exchange translations. During calendar year 2017 Cpl expects the outcome of these events to become clearer, and consequent opportunities and challenges to present themselves.

Cpl remains confident in the outlook for the business and expect to deliver continued profitable growth for the remainder of the financial year.

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