Final Results

RNS Number : 4488F

RTC Group PLC

26 April 2011

 



RTC Group Plc ("RTC", "the Company" or "the Group")

Preliminary results for the year ended 31 December 2010

RTC Group Plc, a support services group, which provides recruitment and conferencing services, is pleased to announce its unaudited preliminary results for the year ended 31 December 2010.

HIGHLIGHTS

Group operating loss from continuing operations before exceptional items of £490,000 (2009: £1,153,000).

Group pre-tax loss before taxation of £450,000 (2009: loss £1,832,000).

Loss per share of 10.62p (2009: 25.99p).

Dividends the Board believes that it would not be prudent to use financial resources to pay a final dividend at this time (2009: nil).

Recruitment made an operating profit of £212,000 (2009: loss £460,000).

Conferencing made an operating loss of £277,000 (2009: loss £372,000).

Commenting on the results Bill Douie, Chairman, said:

"We believe that given the prolonged nature of the recessionary impact across the recruitment industry per se, we acquitted ourselves very well in 2010 especially given the scale of some of the challenges we faced. Although we could no longer justify continuing to trade in Railway Training, an area of declining opportunity and increasing costs, the termination of our exposure to training removed the main threat to the future health of RTC Group and this has enabled an increasing focus on recruitment where we believe an upward trend will continue to provide opportunities for the Group."

ENQUIRIES:

RTC Group Plc                                                                             Tel: [phone]

Bill Douie, Executive Chairman

Andy Pendlebury, Chief Executive

Evolution Securities Limited                                                     Tel: [phone]

Jeremy Ellis / Chris Clarke                                                           

Chairman's Statement

GROUP

Following the appointment of Andy Pendlebury as Chief Executive Officer of the Group in October 2007 a full review of the composition of the Group was conducted and the process of focusing Group activities on recruitment was completed during 2010 with the disposal, outlined in my Interim Statement, of our training subsidiary, Catalis limited.  Although it did not prove possible to find a buyer for the company, the business has continued to trade under new owners who are now a significant tenant of our Derby Conference Centre at London Road, Derby.

TRADING

The Recruitment division performed well in 2010.  In particular contract recruitment has continued to expand across all areas of our business and this has been significantly accelerated by our second large contract to supply long term support staff to NATO bases in Afghanistan, now expected to reach over 700 personnel during the current year.  Although the business environment is still tough and impacting on our branch network, vertical markets, operating from Derby and led by Rail and Energy, have grown strongly.  In addition to the permanent recruitment activities we provide to a broad range of European clients we now have recruitment activity in Germany and to support this have established a formal European presence.

Growth has also continued in our labour supply company, Ganymede Solutions Limited, again led by Rail, with opportunities in other industry sectors broadening the portfolio.

The Catalis training business was placed into administration in June and is treated as discontinued in the accounts.

Whilst The Derby Conference Centre made major advances in cost control and gross margin enhancements during 2010 the business continued to experience difficult trading as customers continued to conduct conferencing activities in-house.

Although there can be no room for over-optimism, overall Group trading performance, built on a profitable recruitment division, closely approached breakeven in the second half and consequently had stabilised by the year end.

CAPITAL INVESTMENT

During the year, although only essential repairs and maintenance expenditure was incurred, it was possible to continue the upgrade of the Derby Conference Centre premises as further space was brought back into use.

DIVIDENDS

Your directors do not feel able to recommend any dividends for 2010.

MANAGEMENT

Building on the achievements of 2009, we continued the expansion of senior management for our operating subsidiaries during 2010. Our management team led by our Chief Executive continues to grow from strength to strength and has successfully captured growth opportunities as they emerged during 2010.

OUTLOOK

We believe that given the prolonged nature of the recessionary impact across the recruitment industry per se, we acquitted ourselves very well in 2010 especially given the scale of some of the challenges we faced. Although we could no longer justify continuing to trade in Railway Training, an area of declining opportunity and increasing costs, the termination of our exposure to training removed the main threat to the future health of RTC Group and this has enabled an increasing focus on recruitment where we believe an upward trend will continue to provide opportunities for the Group.

Although there will undoubtedly be continuing worldwide global economic challenges, trading in the first quarter of 2011 has been satisfactorily ahead of expectations and the general outlook remains encouraging.

Since the year end, having succeeded in securing the second contract with our client in Afghanistan, which will serve to accelerate revenue growth rates, we have also concluded arrangements to establish an office in India to service that business and to pursue opportunities in that fast growing part of the world. 

We have also negotiated new five year arrangements with the owners of our premises at London Road, Derby, which, coupled with a five year sublet to a substantial support services company, has markedly improved the outlook for the Derby Conference Centre.

STAFF

We continue to enjoy the benefits of a loyal and conscientious team of management and staff.  They have my admiration and thanks and I feel privileged to work with them.

W.J.C. Douie, Chairman                                                                                                                     26^th April 2011   

Consolidated Statement of Comprehensive Income (unaudited)

Year ended 31 December 2010

		2010		2009
		£'000	£'000	£'000	£'000
Revenue		19,959		16,479
Cost of sales		(17,001)		(14,291)
Gross Profit			2,958		2,188
Administrative expenses - normal		(3,448)			(3,341)
Operating (loss) before exceptional items			(490)		(1,153)
Administrative income/(expenses) - exceptional			58		(674)
Operating (loss) after exceptional items			(432)		(1,827)
Financing expense			(18)		(5)
(Loss) before tax			(450)		(1,832)
Income tax refund			18		40
Net loss on continuing operations Loss from discontinued operations			(432)           (526)		(1,792)           (553)
Loss for the year and total comprehensive expense for the year attributable to equity holders of the parent			(958)		(2,345)
Loss per share - continuing operations (pence)			(4.79)		(19.86)
Loss per share - discontinued operations (pence)			(5.83)		(6.13)
Loss per share - continuing and discounted operations (pence)			(10.62)		(25.99)

There is no dilutive impact of share options

Consolidated Statement of Changes in Equity (unaudited)

Year ended 31 December 2010

	Share capital	Share premium account	Capital redemption reserve	Share based payment reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2010	90	2,117	50	38	(480)	1,815
Total comprehensive expense for the year	-	-	-	-	(958)	(958)
Share based payment reserve	-	-	-	(8)	-	(8)
Dividends	-	-	-	-	-	-
At 31 December 2010	90	2,117	50	30	(1,438)	849

Year ended 31 December 2009

	Share capital	Share premium account	Capital redemption reserve	Share based payment reserve	Retained earnings	Total Equity
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2009	90	2,117	50	33	1,865	4,155
Total comprehensive expense for the year	-	-	-	-	(2,345)	(2,345)
Share based payment reserve	-	-	-	5	-	5
At 31 December 2009	90	2,117	50	38	(480)	1,815

The share based payment reserve comprises of the cumulative share option charge under IFRS 2 less the value of any share options that have been exercised or have lapsed.

Consolidated Statement of Financial Position (unaudited)

Year ended 31 December 2010			2010			2009
Assets		£'000	£'000	£'000	£'000
Non current assets
Property, plant and equipment		279		691
Deferred tax asset		70		55
			349		746
Current assets
Inventories		10		9
Trade and other receivables		4,787		2,919
Cash and cash equivalents		-		505
			4,797		3,433
Total assets			5,146		4,179
Liabilities
Current liabilities
Trade and other payables		(2,066)		(1,711)
Current borrowings		(2,231)		(653)
Total current liabilities			(4,297)		(2,364)
Net assets			849		1,815
Equity attributable to equity holders of the parent
Share capital			90		90
Share premium			2,117		2,117
Capital redemption reserve			50		50
Share based payment reserve			30		38
Retained earnings			(1,438)		(480)
Total equity			849		1,815

Consolidated Statement of Cash Flows (unaudited)

Year ended 31 December 2010

		2010	2009
		£'000	£'000
Cash flows from operating activities
Operating result from continuing operations		(432)	(1,827)
Adjustments for:
Employee equity settled share options		(8)	5
Depreciation		153	203
Impairment of goodwill		-	674
Loss on sale of property, plant and equipment		-	4
Change in inventories		1	1
Change in trade and other receivables		(2,400)	2,266
Change in trade and other payables		652	(941)
Cash generated from operations		(2,034)	385
Interest paid		(18)	(5)
Income tax received		97	(109)
Net cash from/(used in) operating activities		(1,955)	271
Cash flows from investing activities
Purchases of property, plant and equipment		(24)	(226)
Proceeds from sale of property, plant and equipment		40	4
Net cash from/(used in) investing activities		16	(222)
Cash from/(used) before financing		(1,939)	49
Net (decrease)/increase in cash and cash equivalents from continuing operation		(1,939)	49
Cash movement from discontinued operations Operating Activities		(130)	(277)
Cash movements from discontinued operations investing  activities		(14)	(28)
Net (decrease)/increase in cash and cash equivalents from discontinued operations		(144)	(305)
Total net (decrease) in cash and cash equivalents		(2,083)	(256)
Cash and cash equivalents at the beginning of the year		(148)	108
Cash and cash equivalents at the end of the year		(2,231)	(148)

Notes

1.     CORPORATE INFORMATION

       The preliminary statement of annual results of the Group for the year ended 31 December 2010 were authorised for        issue in accordance with a resolution of the directors on 26 April 2011. RTC Group Plc is a public limited company incorporated and domiciled in England whose shares are publicly traded. The principal activities of the Group are described in note 5.

       The financial information included in the preliminary results has been compiled in accordance with International Financial Reporting Standards ("IFRS"), including International Accounting Standards ("IAS") and interpretations issued by the International Accounting Standards Board ("IASB") and its committees, and as adopted by the EU. The preliminary results do not however contain sufficient information to comply with IFRS.

The accounting policies adopted are consistent with those described in the annual financial statements for the year ended 31 December 2009.  There have been no significant changes in the basis upon which estimates have been determined, compared to those applied at 31 December 2009 and no change in estimate has had a material effect on the current period.

2.     DIVIDENDS

        The Board do not recommend the payment of a final dividend for the year.

3.     LOSS PER SHARE

The calculation of earnings per share for continuing and discontinued operations is based on a loss after tax expense of £958,000 (2009: loss £2,345,000) and a weighted average of 9,022,564 (2009: 9,022,564) shares in issue. 

The outstanding share options were not considered to be dilutive in 2010 nor 2009.

4.       DISCONTINUED OPERATIONS

On 25 June 2010, the Board decided to discontinue the Group's Training Division and accordingly placed its 100% subsidiary Catalis Limited into Administration. The loss for the discontinued operation is stated after charging:

	2010	2009
	£'000	£'000
Revenue	1,138	2,694
Cost of sales	(763)	(1,881)
Gross Profit	375	813
Administrative expenses - normal	(657)	(1,400)
Operating loss	(282)	(587)
Financing income/(expense)	-	-
Loss on ordinary activities before taxation	(282)	(587)
Attributable income tax expense	-	34
Loss on disposal of discontinued operations	(244)	-
Net loss attributable to discontinued operations	(526)	(553)

Details of net assets disposed as a result of the administration of Catalis Limited and the associated loss for the period resulting from this are as follows:

	£'000
Property plant and equipment	202
Current assets	321
Current liabilities	(279)
Net assets disposed of	244
Consideration	-
Loss on disposal	(244)

5.      SEGMENTAL ANALYSIS

The Group is a provider of Recruitment and Conferencing Services and operates a division for each, made up from a number of legal entities Segmental information is provided below in respect of Recruitment and Conferencing operations.. The Group manages its divisions, the trading performance and working capital by monitoring operating profit before exceptional items and centrally manages Group taxation, capital structure and spend, including net equity and net debt.

Each of the divisions are primarily conducted in the United Kingdom although there is a growing international element within the Recruitment division.

Revenues are generated from permanent and temporary recruitment in the Recruitment division and from the provision of a conferencing, hotel and letting office facilities in Derby for the Conferencing division. 

All revenues have been invoiced to external customers.  Revenues of £2.2m (2009: Nil) were derived from a single external customer.  These revenues are attributable to the Recruitment division.

        The segmental analysis of revenue, gross margin, operating profit before exceptional goodwill write off and net assets is as follows: -

			2010	2009
			£'000	£'000
	Revenue
	Recruitment		18,664	15,343
	Conferencing		1,295	1,136
			19,959	16,479
	Gross Margin
	Recruitment		2,395	1,713
	Conferencing		563	475
			2,958	2,188
	Operating profit/(loss) from continuing operations before exceptional items
	Recruitment		212	(460)
	Conferencing		(277)	(372)
	Group costs		(425)	(321)
			(490)	(1,153)

	2010	2010	2010	2009	2009	2009
	£'000	£'000	£'000	£'000	£'000	£'000
	Assets	Liabilities	Net	Assets	Liabilities	Net
Recruitment	4,548	(3,977)	571	2,790	(1,562)	1,228
Conferencing	403	(212)	191	472	(152)	320
Non-trading/Group	195	(108)	87	258	(230)	28
Continuing	5,146	(4,297)	849	3,520	(1,944)	1,576
Discontinued: Training	-	-	-	659	(420)	239
Total	5,146	(4,297)	849	4,179	(2,364)	1,815

        All assets and liabilities are held in the United Kingdom.

6.     INCOME TAX EXPENSE

						2010	2009
						£'000	£'000
	Analysis of tax :-
	Current Tax
	UK corporation tax					-	-
	Adjustment in respect of previous periods					(3)	(92)
						(3)	(92)
	Deferred Tax
	Origination and reversal of temporary differences					-	18
	Adjustment in respect of previous periods					(15)
	Tax					(18)	(74)

    Continuing operations                                                                                                               (18)                  (40)

    Discontinued operations                                                                                                                 -                  (34)

(18)

(74)

7.     EXCEPTIONAL ADMINISTRATIVE COSTS

						2010	2009
						£'000	£'000
	Profit on disposal of property plant and equipment					(121)	-
	Reorganisation costs					63	-
	Impairment of goodwill					-	674
						(58)	674

Report & Accounts

The above financial information does not constitute the Company's statutory accounts for the years ended 31 December 2010 or 2009 but is derived from those accounts.  The statutory accounts for 2009 have been filed with the Registrar of Companies, received an unqualified audit report and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. 

The statutory accounts for the year ended 31 December 2010 have not been approved or issued and the auditors have not expressed an opinion on the statutory accounts.  Full audited accounts of RTC Group plc for the year ended 31 December 2010 will be dispatched to shareholders, made available on the Company's website at www.rtcgroupplc.co.uk and will be available from the Company's registered office:- The Derby Conference Centre, London Road, Derby, DE24 8UX in advance of the AGM.

 

END

 

 

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