Final Results

RNS Number : 2908B

Impellam Group plc

16 February 2011

 



 

Impellam Group plc

REPORT FOR THE 52 WEEKS ENDED 31 DECEMBER 2010

PRELIMINARY RESULTS (UNAUDITED) 

Highlights

§ Turnover increased 6.6% to £1,113.6 million (2009: £1,044.2 million)

§ Fees from permanent placements increased 18.4% to £18.7 million (2009: £15.8 million) 

§ Conversion of gross profit into operating profit improved to 16.8% (2009: 6.0%)

§ Operating profit £30.7 million (2009: £10.0 million)

§ Cash generation from operating activities increased to £57.5 million (2009: £1.3 million)

§ Net debt decreased by £51.8 million to £17.8 million as at 31 December 2010

§ Basic earnings per share of 46.7p (2009: 23.9p)

Cheryl Jones, Chairman, commented:

"I am extremely pleased to announce that Impellam has produced a strong set of results during the first full year of trading under the Company's defined strategic initiatives.

Key components of the Group's strategic focus for 2010 included end-to-end operating efficiency initiatives, further brand rationalisation, controlled growth strategies and service innovation development for each selected market.  As these initiatives developed, their alignment to the overall productivity and efficiency of the business resulted in improved profit and effective cash flow generation. 

During 2010, the Group's turnover increased 6.6% to £1.1 billion, principally driven through the Healthcare Staffing and UK Commercial Staffing sectors.

Importantly, conversion of gross profit into operating profit improved over ten basis-points to 16.8% in 2010 from 6.0% in 2009. This improvement reflects the Group's planned approach towards efficiency measures and revenue quality initiatives across all segments.

Operating profit was £30.7 million in 2010, up from £10.0 million in 2009, with all business segments contributing to this performance.

The overall net cash generated from the Group's operations in 2010 was £57.5 million, which allowed net debt to be reduced to £17.8 million at the year-end.

I am also pleased to report that Impellam has recently extended its primary commercial banking facility through to February 2013, and the Company will repay, in full, its final obligations under the £20.0 million guaranteed secured loan notes on the due date in May 2011. 

Impellam is now well-positioned to take advantage of market opportunities and improving economic conditions."

Business Segment Results:

−    Healthcare Staffing: Turnover increased 13.1% to £202.4 million and gross profit increased by 13.5% to £32.0 million.  Operating profit increased to £11.6 million.

−    UK Staffing - Commercial: Turnover increased 11.3% to £472.9 million and gross profit increased by 9.5% to £73.6 million.  Operating profit increased to £14.9 million.

−    UK Staffing - Professional & Technical: Turnover declined 2.9% to £168.1 million and gross profit declined 1.4% to £28.5 million.  Operating profit increased to £4.3 million.

−    US Staffing: Turnover declined 0.6%* to £164.9 million and gross profit increased by 4.1%* to £34.9 million.  Operating profit increased to £4.0 million.

−    Support Services: Turnover increased 2.0% to £105.3 million and gross profit increased 37.5% to £13.2 million.  Operating profit was £2.4 million compared to a loss in 2009.

The Group generated £57.5 million of cash from operating activities in the year (2009: £1.3 million).

Net debt reduced by £51.8 million to £17.8 million as at 31 December 2010 (31 December 2009: £69.6 million).  In addition, the Group has outstanding letters of credit drawn against its US borrowing facilities amounting to £3.4 million (31 December 2009: £4.9 million).

 

The table below sets out the financial results for the Group by segment for the fifty two weeks to 31 December 2010.

	Revenue			Gross profit			Operating profit
	Unaudited	Audited		Unaudited	Audited		Unaudited	Audited
£'million	2010	2009	% change	2010	2009	% change	2010	2009
Healthcare Staffing	202.4	179.0	13.1	32.0	28.2	13.5	11.6	10.3
UK Staffing - Commercial ^	472.9	424.7	11.3	73.6	67.2	9.5	14.9	8.4
UK Staffing - Professional & Technical	168.1	173.2	(2.9)	28.5	28.9	(1.4)	4.3	3.2
US Staffing	164.9	164.1	(0.6)*	34.9	33.1	4.1*	4.0	0.9
Support Services ^	105.3	103.2	2.0	13.2	9.6	37.5	2.4	(1.1)
	1,113.6	1,044.2	6.6	182.2	167.0	9.1	37.2	21.7
Central costs							(3.9)	(2.5)
Operating profit before amortisation of client relationships and exceptional items							33.3	19.2
Amortisation of client relationships							(2.6)	(3.5)
Exceptional items							-	(5.7)
Operating profit							30.7	10.0

* measured in local currency

^ Certain prior period costs have been reclassified to conform to the current period presentation with no net impact on operating profit.  As part of the on-going review and rationalisation of the Group, certain business activities have been reclassified within the reporting segments.  Prior period comparatives have been restated accordingly.

Consolidated income statement

For the fifty two weeks ended 31 December 2010

		Unaudited 2010	Audited 2009
	Notes	£m	£m
			Restated*
Continuing operations
Revenue	2	1,113.6	1,044.2
Cost of sales		(931.4)	(877.2)
		__________	__________
Gross profit		182.2	167.0
Administrative expenses		(151.5)	(157.0)
		__________	__________
Operating profit	2	30.7	10.0
Operating profit before amortisation of client relationships and exceptional items		33.3	19.2
Amortisation of client relationships		(2.6)	(3.5)
Exceptional items		-	(5.7)
		__________	__________
Operating profit		30.7	10.0
Finance expense		(3.9)	(4.1)
		__________	__________
Profit before taxation		26.8	5.9
Taxation	3	(5.7)	4.9
		__________	__________
Profit for the period		21.1	10.8
		__________	__________

* Certain prior period costs have been reclassified to conform to the current year presentation with no net impact on operating profit.

Earnings per share	4	Pence	Pence
Basic and diluted		46.7	23.9
		__________	__________

Consolidated statement of comprehensive income

For the fifty two weeks ended 31 December 2010

		Unaudited 2010	Audited              2009
		£m	£m
Profit for the period		21.1	10.8
Other comprehensive income:
Gains/(losses) recognised directly in equity
Currency translation differences - net of tax		0.3	(0.4)
		__________	__________
Total comprehensive income for the period		21.4	10.4
		__________	__________

Consolidated balance sheet

		Unaudited 31 December 2010		Audited 31 December 2009
			£m		£m
Non-current assets
Property, plant and equipment			5.9		8.5
Goodwill			60.1		59.9
Other intangible assets			49.4		51.3
Deferred tax asset			6.1		7.5
Financial assets			2.5		3.5
			_________		_________
			124.0		130.7
			_________		_________
Current assets
Trade and other receivables			191.9		189.7
Cash and short-term deposits			13.9		9.2
			_________		_________
			205.8		198.9
			_________		_________
Total assets			329.8		329.6
			_________		_________
Current liabilities
Trade and other payables			163.6		136.8
Taxation liabilities			2.7		1.2
Bank overdrafts and other borrowings			11.7		58.8
Short-term borrowings			20.0		-
Other financial liabilities			-		0.2
Provisions			3.7		4.6
			_________		_________
			201.7		201.6
			_________		_________
Net current assets/(liabilities)			4.1		(2.7)
			_________		_________
Non-current liabilities
Long-term borrowings			-		20.0
Other payables			1.1		0.9
Provisions			7.8		8.4
Deferred tax liability			12.4		13.3
			_________		_________
			21.3		42.6
			_________		_________
Total liabilities			223.0		244.2
			_________		_________
Net assets			106.8		85.4
			_________		_________

Consolidated balance sheet (continued)

			Unaudited 31 December 2010		Audited 31 December 2009
				£m		£m
Equity
Issued share capital				0.4			0.4
Share premium				15.5			15.5
				_________			_________
				15.9			15.9
Other reserves				93.0			92.7
Retained deficit				(2.3)			(23.4)
				_________			_________
Total equity attributable to equity holders of the parent Company				106.6			85.2
Non-controlling interest				0.2			0.2
				_________			_________
Total equity				106.8			85.4
				_________			_________

Consolidated cash flow statement

For the fifty two weeks ended 31 December 2010

			Unaudited 2010	Audited 2009
	Notes		£m	£m
Cash flows from operating activities
Cash generated by operations	5		61.6	0.8
Taxation (paid)/refunded			(4.1)	0.5
			________	________
Net cash generated by operating activities			57.5	1.3
			________	________
Cash flows from investing activities
Cost of acquisition (net of cash acquired)			(0.6)	-
Purchase of property, plant and equipment (PPE)			(2.4)	(3.7)
Purchase of intangible assets			(1.7)	(1.4)
Proceeds from disposal of PPE			1.0	-
Net movement in other financial assets			1.0	0.6
			________	________
Net cash utilised on investing activities			(2.7)	(4.5)
			________	________
Cash flows from financing activities
Movement in long-term borrowings			(0.1)	(1.4)
Movement in short-term borrowings			(44.5)	7.6
Capital element of finance lease payments			(0.2)	(0.2)
Finance expense paid			(3.6)	(3.8)
			________	________
Net cash (outflow)/inflow from financing activities			(48.4)	2.2
			________	________
Net increase/(decrease) in cash and equivalents			6.4	(1.0)
Opening cash and cash equivalents			6.5	8.6
Foreign exchange gains/(losses) on cash and cash equivalents			1.0	(1.1)
			________	________
Closing cash and cash equivalents			13.9	6.5
			________	________
		31 December 2010			31 December 2009
Cash and short term deposits			13.9		9.2
Bank overdrafts			-		(2.7)
			________		________
Cash and cash equivalents			13.9		6.5
			________		________

Consolidated statement of changes in equity

For the fifty two weeks ended 31 December 2010

	Unaudited
	Total share capital and share premium	Other reserves	Retained deficit	Non-controlling interest	Total equity
	£m	£m	£m	£m	£m
1 January 2010	15.9	92.7	(23.4)	0.2	85.4
	______	______	______	______	______
Other comprehensive income	-	0.3	-	-	0.3
Profit for the period	-	-	21.1	-	21.1
	______	______	______	______	______
31 December 2010	15.9	93.0	(2.3)	0.2	106.8
	______	______	______	______	______

Notes to the financial statements

1          Basis of preparation

I.            Statement of compliance

The financial statements presented in this financial report have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union that will be applicable to the consolidated financial statements for the year ended 31 December 2010.

II.           Financial information

The financial information, which is unaudited, for the fifty two weeks to 31 December 2010 does not constitute the statutory accounts of the Group for the relevant period within the meaning of section 434 of the Companies Act 2006. Such statutory accounts will be completed in due course and delivered to the Registrar of Companies.

III.          Accounting policies, new IFRS and interpretations

The accounting policies used in this report are consistent with those applied at December 2009 with the exception of the following new or revised IFRS publications that have been adopted in the period:

International Accounting Standards (IAS / IFRS)	Effective date
IFRS 3 - Business combinations	1 July 2009

No other new and/or revised IFRS and IFRIC publications that came into force in the period have any impact on the Group.

2          Segmental information

As part of the on-going review and rationalisation of the Group, certain business activities have been reclassified within the reporting segments.  Prior period comparatives have been restated accordingly.

Fifty two weeks ended 31 December 2010 - Unaudited

Continuing operations	Healthcare Staffing	UK Staffing - Commercial	UK Staffing -Professional & Technical	US Staffing	Support Services	Group total
	£m	£m	£m	£m	£m	£m
Segment revenue	202.4	472.9	168.1	164.9	105.3	1,113.6
	_______	_______	_______	_______	_______	_______
Segment EBIT	11.6	14.9	4.3	4.0	2.4	37.2
	_______	_______	_______	_______	_______
Unallocated - Corporate cost						(3.9)
						_______
Operating profit before amortisation of client relationships and exceptional items						33.3
Amortisation of client relationships						(2.6)
Exceptional items						-
						_______
Operating profit before finance costs and taxation						30.7
Finance expense						(3.9)
						_______
Profit before taxation						26.8
Taxation charge						(5.7)
						_______
Profit for the period						21.1
						_______

Twelve months ended 31 December 2009 - Audited

Continuing operations	Healthcare Staffing	UK Staffing - Commercial	UK Staffing -Professional & Technical	US Staffing	Support Services	Group total
	£m	£m	£m	£m	£m	£m
Segment revenue	179.0	424.7	173.2	164.1	103.2	1,044.2
	_______	_______	_______	_______	_______	_______
Segment EBIT	10.3	8.4	3.2	0.9	(1.1)	21.7
	_______	_______	_______	_______	_______
Unallocated - Corporate cost						(2.5)
						_______
Operating profit before amortisation of client relationships and exceptional items						19.2
Amortisation of client relationships						(3.5)
Exceptional items						(5.7)
						_______
Operating profit before finance costs and taxation						10.0
Finance expense						(4.1)
						_______
Profit before taxation						5.9
Taxation credit						4.9
						_______
Profit for the period						10.8
						_______

3        Taxation

	Unaudited 2010	Audited 2009
	£m	£m
Current income tax
UK corporation tax on results for the period	6.9	0.4
Adjustments in respect of previous periods	(1.4)	(0.9)
	________	________
	5.5	(0.5)
Foreign tax in the period	0.3	0.6
	________	________
Total current income tax	5.8	0.1
Deferred tax credit	(0.1)	(5.0)
	________	________
Total tax charge/(credit) in the income statement	5.7	(4.9)
	________	________

4        Earnings per share

Basic earnings per share amounts are calculated by dividing the profit for the period attributable to the equity holders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated on the same basis, but after adjusting the denominator for the effects of dilutive options. The only potentially dilutive shares arise from the share options issued by the Group under its share-based compensation plans. There are 83,165 options outstanding as at the balance sheet date (2009: 158,998).

The weighted average number of shares has been calculated for the period from 1 January 2010 to 31 December 2010. The number of shares so calculated is 45,029,014 (December 2009: 44,979,041) excluding the shares owned by The Corporate Services Group Employee Share Trust.

5        Reconciliation of profit before tax to cash generated by operations

	2010	2009
	£m	£m
Profit before taxation	26.8	5.9
Adjustments for:
Finance expense	3.9	4.1
Depreciation and amortisation	8.3	8.6
Other items	0.1	0.1
	__________	__________
	39.1	18.7
Increase in trade and other receivables	(1.2)	(8.0)
Increase/(decrease) in trade and other payables	25.6	(8.5)
Decrease in provisions for liabilities and charges	(1.9)	(1.4)
	__________	__________
Cash generated by operations	61.6	0.8
	__________	__________

6        Additional cash flow information

	1 January 2010	Cash flow	Foreign exchange	Other non-cash changes	31 December 2010
	£m	£m	£m	£m	£m
Cash at bank and in hand	9.2	3.7	1.0	-	13.9
Overdrafts	(2.7)	2.7	-	-	-
	__________	__________	_________	__________	__________
	6.5	6.4	1.0	-	13.9
	__________	__________	_________	__________	__________
Guaranteed secured loan note	(19.9)	-	-	(0.1)	(20.0)
Finance leases	(0.3)	0.2	-	-	(0.1)
Revolving credit	(55.9)	44.6	(0.3)	-	(11.6)
	_________	__________	_________	__________	__________
	(76.1)	44.8	(0.3)	(0.1)	(31.7)
	__________	__________	_________	__________	__________
	(69.6)	51.2	0.7	(0.1)	(17.8)
	__________	__________	_________	__________	__________

Enquiries:  For further information please contact the appropriate individual below.

Impellam Group plc
Cheryl Jones, Chairman	Tel: [phone]
Andrew Burchall, Group Finance Director	Tel: [phone]
Cenkos Securities plc (Nominated Advisor and Broker to Impellam)
Nicholas Wells Elizabeth Bowman	Tel: [phone] Tel: [phone]
Threadneedle Communications
John Coles	Tel: [phone]

Notes:

Impellam Group plc, traded on AIM (Symbol: IPEL), conducts business primarily in the United Kingdom and the United States, with smaller operations in Australia, Ireland, New Zealand and Continental Europe.  The Group employs more than 5,600 people, including 2,400 managers and consultants and more than 3,200 support services workers, across a network of 240 branch and regional offices. The Group operates more than 20 specialty brands across a broad range of staffing sectors which are complemented by businesses in the outsourced support services sector.  Impellam Group was formed in May 2008 through the merger of The Corporate Services Group plc and Carlisle Group Limited and is ranked 15^th on Staffing Industry Analysts' 2010 Top Global Staffing Companies List.

Business Segment	Staffing Sectors/Brands
Healthcare Staffing	The Group's Healthcare staffing segment comprises Medacs Healthcare (locum doctors, nursing, international recruitment and managed healthcare services) and Chrysalis Homecare (domiciliary care).
UK Staffing - Commercial	The Group's UK Commercial staffing segment primarily includes those brands that operate in the traditional clerical, administrative, industrial/trades and hospitality staffing markets. These principal brands include ABC Contract Services (construction and telecoms), Blue Arrow (catering, managed services, office and industrial), Carlisle Managed Solutions (managed services), Comensura (vendor neutral staffing & recruitment procurement), and Tate (office).
UK Staffing - Professional & Technical	The Group's UK Professional & Technical staffing segment comprises the following principal brands: Austin Benn (sales and marketing), Celsian Education (teachers and school support staff), Chadwick Nott (legal), Hewitson Walker (accounting), IRC (multi-sector staffing in Ireland), S∙COM (technical) and SRG (scientific).
US Staffing	The Group's US staffing segment operates across a wide spectrum of staffing sectors.   The principal brands and their specialties include CORESTAFF Services and Leafstone (Call centre/customer care, engineering, IT, light industrial, office/clerical, professional, skilled trade and technical), Guidant Group (managed services), InfoCurrent (information/records management and library services), S∙COM (technical and telecom) and SRG Woolf (clinical research).
Support Services	The Group's Support services segment consists of several brands providing a wide range of outsourced services to clients throughout the UK.  These brands include Carlisle Cleaning & Support Services (contract cleaning and facility support services), Carlisle Security (security guarding and CCTV public space surveillance), and the Recruit (retail merchandising and events).

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