Operating profit down slightly at year-end 2018 for Prime People
Prime People Plc has released its audited results for the year ended 31st March 2018.
The company closed the year with revenue of £22.92m (2017: £24.21m) and NFI of £13.15m. This is a 0.38% increase on last year (2017: £13.10m). NFI in the second half of the year of £7.00m was 13.83% higher than the first half of 2018.
There were number of good performances within the UK permanent property business and, in particular, real estate banking and investment generated improved NFI as did its special projects team.
Increased staff costs across the group, including hiring and establishments costs of a new Hong Kong insights team, together with an investment to maintain and improve its customer relationship management systems impacted on operating profit, which was £1.19m, (2017: £1.9m).
The conversion rate, which compares operating profit to NFI, was 9.08% (2017:14.54%) primarily because of the increased costs mentioned above.
During the year, a final dividend of 3.25p per share was paid (2016:0.00p) and an interim dividend of 1.75p per share (2017: 1.75p) was paid to shareholders. The board will be recommending a final dividend of 3.25p (2017: 3.25p) per share. This will result in a total dividend payment of 5.00p for the 2018 financial year (2017: 5.00p).
During the year, the company also acquired 60% of the equity of Command Recruitment Group (HK) Limited (CMD) a recruitment group focussed in the architecture, design, construction and engineering sectors. The new business has allowed the company to continue to advance its international strategy by extending its reach and capability both in Asia and the Middle East. CMD is trading in line with its expectations.
Peter Moore, managing director of Prime People, said, "We closed the year with slightly reduced gross fee income but with net fee income much in line with the previous year.
“As announced in our trading update on 4th May 2018, operating profit for the year was £1.19m, down on £1.9m in 2017, reflecting £102k of acquisition costs relating to Command Recruitment Group, increases in staff costs particularly in Hong Kong where we have established a new Insights Team together with an exceptional investment to maintain and improve our Customer Relationship Management systems. In the UK our permanent business performed well in contrast to our international business which fell below the performance levels that we were hoping for at the beginning of the year.
“In October 2017 we were pleased to announce the acquisition of 60% of the equity of Command Recruitment Group (HK) Limited (CMD) a recruitment group focussed in the architecture, design, construction and engineering sectors. The new business has allowed the company to continue to advance its international strategy by extending its reach and capability both in Asia and the Middle East. CMD is trading in line with our expectations.
“We have maintained a strong cash position and propose a final dividend of 3.25p, which combined with the interim dividend of 1.75p per share, will result in a total dividend of 5.00p for the 2018 financial year. (2017: 5.00p).
“As we start the new accounting year, like many other recruitment businesses, we are required under IFRS 15 to change how we account for Net Fee Income. Currently this is recognised when a placement is made. With effect from 1 April 2018 the changed Standard requires us to account by invoice date. As at this date, the Board does not expect any material adjustment to reportable profits for the current year as a result of transition to IFRS 15.
“Current activity is encouraging across the group and we are confident the business is well positioned to exploit opportunities as they arise."
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