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NFI up 2% YoY in H1 for InterQuest

InterQuest Group plc has announced its unaudited interim results for the six months ended 30th June 2017.

Revenue was down 6% to £69.1m (2016: £73.8m) while net fee income ("NFI") increased 2% to £11.2m (2016: £11.0m). NFI from permanent placements increased 34% to £5.1m (2016: £3.8m) and NFI from temporary contract placements decreased 15% to £6.0m (2016: £7.1m).

Adjusted PBT was down 23% to £1.0m (2016: £1.3m). Like for like PBT, excluding Rees Draper Wright, was down 62% to £0.5m (2016: £1.3m).

The company reported net profit of £0.2m (2016 after goodwill impairment of £3.2m: £2.4m loss).

Diluted adjusted earnings per share were 2.2 pence (2016: 3.0 pence) and basic earnings per share of 0.5 pence (2016: 6.7 pence loss).

Net cash generated in operating activities was £3.0m (2016: net cash used £2.9m). Net debt, consisting of its working capital facility net of cash balances held, decreased during the period to £3.3m (2016: £9.9m).

No interim dividend paid (2016: 0.5 pence)

The average permanent fee per placement, excluding the higher value fees earned from the executive search division, has increased by 7% to £7.3k (2016: £6.8k) through emphasising the development and placement of senior relationships and roles.

The Group has added a further significant client in the Solutions division. Net fee income earned through Solutions clients increased by 14% to £1.9m (2016: £1.6m).

The Group increased its bank facility to £24m (2016: £20m) and reduced banking costs with a new banking arrangement agreed through HSBC.

Chris Eldridge, chief executive officer, said, "The Group has generated profit before tax, share based payments and non-recurring costs of £1m, a reduction from £1.3m in the same period in 2016.  Like for like profit before tax, share based payments and non-recurring costs, excluding Rees Draper Wright acquired in August 2016, amounted to £0.5m a reduction of 62%.  The Group continues its transformation programme at ECOM which has seen the division's profits grow marginally in the period following a non-cash impairment charge of £3.2m in the prior year due to a significant reduction in profitability. The financial services, analytics, networks and public sector have seen a decline in demand compared to the prior period which has impacted our results for the year.  We have added a further client to our Solutions business and we continue to develop our business geographically focusing on higher margin opportunities as evidenced by the fact that our contract recruitment margins and average permanent placement fees have increased during the period. 

Gary Ashworth, chairman, commented, "The Group's results for the first half of 2017 continue to reflect the challenging nature of the UK staffing business during the ongoing Brexit uncertainty and are below our expectations.  Rees Draper Wright has given the Group a platform to expand into the US market and we have invested in that market by expanding the InterQuest offering into our New York office.  A structural change in the senior management at the end of 2016 and early 2017 has meant further restructuring of certain divisions which will take some time to develop but which we estimate will contribute to profits in the medium and long term.

"On behalf of the Board I would like to thank all of my colleagues across the Group for their contribution to the transformation and for their commitment to the future success of the Group."

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