Final Results-Replacement

CPL Resources PLC 27 September 2000 The Issuer has made the following amendment to the 'Final Results' announcement issued on 27 September, 2000 at 07.03 under RNS No.5873R. The Profit and Loss Account was missing from the first version but is now included, all other text remains the same. CPL RESOURCES PLC Audited Statement of results for the year ended 30 June 2000 Highlights The year ended 30 June 2000 was a highly successful one for the Group on a number of fronts. Among the highlights of the year were: * An excellent financial performance * Strong organic growth in our core business * The Group's acquisition of Careers Register * Continued strengthening of our team * New business locations opened and trading successfully in Belfast and Cork Results & Financial Position The Group's financial performance was strong across a wide range of business activities. Operating profit increased by 44% to EUR4.6 million and earnings per share rose by 41% to EUR9.3 cents. The Board is recommending a final dividend of EUR0.5cents per share, bringing the total dividend for the year to EUR1 cent per share. The final dividend is subject to Irish dividend withholding tax. Dividends will be due and payable on 20 November 2000 to holders of ordinary shares at close of business on the record date of 20 October 2000. Copies of the Group's Annual Report will be posted to shareholders and will be available at the Group's registered office. The Group's balance sheet remains strong with net assets of EUR8.2 million. The Group had a positive net cash position at year end, despite having made a significant acquisition for cash during the year. The Group's financial performance and financial position are dealt with more fully in the Chief Executive's Review. Acquisition On 4 April 2000, the Group acquired the entire share capital of Careers Register for a consideration comprising an up-front cash payment and a deferred amount payable on the achievement of certain agreed performance criteria. Careers Register is a leading Irish recruitment firm specialising in accountancy and financial sector appointments. Careers Register is a very welcome addition to the CPL family and the benefits to the Group of this acquisition are already becoming apparent. The Group continues to evaluate other promising acquisition opportunities on a selective basis in the Irish and key continental markets. People The Group continues to strengthen its team by attracting high quality recruiters into the business and by placing significant emphasis on the training and development of personnel. The Group is fortunate to have a team of talented and energetic managers who have day to day responsibility for the operations of the business. The Board is very grateful to all managers and staff in the business for their dedication, enthusiasm and commitment throughout the year. Corporate Governance The Board seeks to adhere to the highest standards of corporate governance at all times. Details of compliance are set out in full in the Directors' Report. It is the Board's policy to comply with best practice in this crucial area at all times. Directors In addition to its regular meetings the Board of Directors operates through committees established to deal with matters related to the audit and internal controls of the Group (the Audit Committee) and the remuneration of executive directors (the Remuneration Committee). I would like to thank each of my fellow directors for their continuing commitment to the success of the Group. Outlook Our first year as a quoted company proved to be our most successful to date. The Directors believe that the Group is very well positioned to continue to grow strongly because: * our people continue to use their skills, experience and commitment to deliver significant organic growth in the business * we number among our customers leading international and domestic companies in a variety of sectors * our emphasis on technology and on developing our use of the internet in the recruitment process has kept us at the forefront of our industry in Ireland * continued strong growth is predicted in the Irish economy, and in the key technology and financial sectors in particular * we are ideally placed to make further successful acquisitions if and when sufficiently attractive opportunities arise * our new locations give us comprehensive coverage of the key business centres in Ireland For these reasons the Directors view the future with considerable confidence. John Hennessy Chairman 26 September 2000 Chief Executive's Report Financial Results CPL Resources plc achieved strong results for the year ended 30 June 2000. This was our first full year since flotation in June 1999 on the Developing Companies Market (DCM) and the Alternative Investment Market (AIM). Turnover for the year increased by 25% to EUR26 million and Net Fee Income increased by 58% to EUR11.9 million. Pretax profits increased by 45% to EUR4.5 million. Basic earnings per share increased from EUR6.6 cents to EUR9.3 cents an increase of 41%. The Group's operating margins increased from 15.2% in the year to 30 June 1999 to 17.6% in the year to 30 June 2000. The Board recommends a final dividend of EUR0.5 cents. The Group's net assets at 30 June 2000 amounted to EUR8.2 million. Operations Review We have consolidated our position as the leading Irish specialist recruitment services company. This was achieved by: - * Expanding our specialist teams in Telecoms, E-commerce and Network Services, leading to an increase in net fee income of 73% in these divisions. Demand for staff amongst our client companies is at record levels. * Expansion within the Accounting and Financial sector, through the acquisition of Careers Register in March 2000. This is a strategically important area, and like the technology sector, is a strong growth market with relatively higher margins. In the coming year Careers Register will continue to develop its services in both contract and permanent recruitment and will exploit the significant opportunity for cross marketing of services between CPL and Careers Register. * Opening two new offices - Belfast in October 1999 and Cork in May 2000. We now have regional offices in Belfast, Galway, Limerick and Cork. This year we will expand the range of services we offer to clients in these locations. * Growth in our contract company CPL Solutions. Net fee income grew by 14% on the previous year, despite the temporary slow-down in the market caused by Y2K. We have increased our team of recruiters in CPL Solutions as this sector continues to strengthen. * Establishing our Resource Management division through which we provide outsource programmes to manage our clients' total recruitment needs. Clients using this service do so to consolidate their recruitment efforts and manage the recruitment process more effectively. It is a highly consultative value added service and a number of significant new clients were gained in the past year. Demand for this service is currently very high and we anticipate strong growth in this area in the current financial year. * Expansion and greater efficiency in our IT Infrastructure. Investment in our IT systems and the Internet is on-going as both jobseekers and clients in the specialist sectors in which we operate are regular users of the Internet. CPL has hosted a website since 1997, which has been effective in building brand awareness and enabling us to develop on-line relationships with jobseekers and clients. Our new website will be launched in October 2000 and we believe the user friendly design, along with rich content and value added components for jobseekers and clients, will allow us to bring greater quality, speed and efficiency to the recruitment process. People The development of our consultants and the continued recruitment of talented people are the key factors in achieving our goals. We are committed to training and continually improving the quality and range of our services. Our people have an in-depth knowledge of their specialist markets and it is their skills and experience, which is central to the quality of service delivered to our clients. I would like to sincerely thank all our people for their hard work and dedication. Prospects The profit before tax for the six months to June 2000 shows a 55% increase on the corresponding period of the previous year. The current year has started with strong trading, and sales in all our divisions are well ahead of last year. We will continue our strategy of maximising organic growth, searching for suitable acquisitions and developing new services. The Group now provides recruitment services in the financial and technology sectors - two of the most dynamic markets in the world. These sectors, together with the increasing demand for professional knowledge workers and the growing trend towards project-oriented, flexible contract staffing, ensure we have enormous opportunity to grow both revenue and profitability. We are confident of another year of strong results. Anne Heraty Chief Executive 26 September 2000 For further information please contact: Anne Heraty 00 353 1 6146015 CPL Resources plc Conall O'Morain 00 353 1 6614055 Slattery PR CPL Resources Plc Consolidated Profit and Loss Account For the Year Ended 30 June 2000 2000 1999 EUR'000 EUR'000 Turnover 26,004 20,761 Cost of sales (14,008) (13,184) ---------------------- Gross Profit 11,996 7,577 Administrative expenses (6,132) (3,755) Distribution expenses (1,255) (621) ---------------------- Operating Profit 4,609 3,201 Interest payable and similar charges (41) (48) ---------------------- Profit on Ordinary Activities before Taxation 4,568 3,153 Taxation on profit on ordinary activities (1,211) (968) ---------------------- Profit for the Financial Year 3,357 2,185 Dividends paid and proposed (364) - ---------------------- Retained profit for the year 2,993 2,185 Profit and Loss Account, start of year 3,248 1,063 ---------------------- Profit and Loss Account, end of year 6,241 3,248 ====================== Earnings per ordinary share 9.3 cents 6.6 cents ====================== Fully diluted earnings per ordinary share 9.0 cents 6.6 cents ====================== There are no recognised gains or losses other than the profit for the financial year. CPL Resources Plc Consolidated Balance Sheet - 30 June 2000 2000 1999 EUR'000 EUR'000 Fixed Assets Tangible assets 1,418 1,040 Intangible assets 4,618 - ----------------------------- 6,036 1,040 ----------------------------- Current Assets Work in progress 500 137 Debtors 8,617 6,947 Cash at bank and in hand 2,594 4,534 ----------------------------- 11,711 11,618 Creditors : amounts falling due within one year (7,116) (6,744) ----------------------------- Net Current Assets 4,595 4,874 ----------------------------- Total Assets less Current Liabilities 10,631 5,914 Creditors: amounts falling due after more than one year (2,354) (506) Provisions for Liabilities and Charges - deferred taxation (60) (60) ----------------------------- Net Assets 8,217 5,348 ============================= Capital and Reserves Called up share capital 3,620 3,620 Capital conversion reserve fund 57 57 Share premium 1,656 1,780 Merger reserve (3,357) (3,357) Profit and loss account 6,241 3,248 ----------------------------- Shareholders' Funds - all Equity 8,217 5,348 ============================= CPL Resources Plc Consolidated Cash Flow Statement For the Year Ended - 30 June 2000 Notes 2000 1999 EUR'000 EUR'000 Net Cash Inflow (Outflow) from Operating Activities 20 (a) 4,081 (328) Returns on Investments and Servicing of Finance 20 (b) (41) (48) Taxation (1,020) (410) Capital Expenditure and Financial Investment 20 (c) (505) (223) Acquisitions, net of Cash acquired 20 (d) (2,640) - Equity Dividends paid (182) - ----------------------- Cash Outflow before Financing (307) (1,009) Financing 20 (e) 1,153 2,215 Amounts (paid) due to shareholders (2,264) (2,264 ----------------------- (Decrease) Increase in cash (1,418) 3,470 Reconciliation of Net Cash Flow to Movement in Net Debt 20 (f) (Decrease) Increase in cash in the year (1,418) 3,470 Cash inflow from increase in debt and lease financing (1,463) (114) ----------------------- Movement in Net Debt in the Year (2,881) 3,356 Net Funds (Debt), beginning of year 3,254 (102) ----------------------- Net Funds, end of year 373 3,254 ====================== CPL Resources Plc Notes to the Financial Statements For the Year Ended 30 June 2000 1. Operations and Turnover The Group's subsidiary companies (Note 12) are involved in the provision of recruitment consultancy services, as follows: * Computer Placement Limited - recruitment and placement of technology staff * CPL Solutions Limited - sourcing and placement of temporary technology staff * Careers Register - recruitment and placement of permanent and temporary financial staff All turnover arises from the provision of these services in Ireland. 2. Acquisition of Careers Register With effect from 29 February 2000, the Group acquired all of the share capital of Careers Register, a financial recruitment specialist involved in the recruitment of both permanent and temporary staff, for a maximum consideration of EUR5.3 million. No significant adjustments were made to the carrying values of the assets and liabilities in arriving at their fair values. These fair values, together with the goodwill arising thereon, were as follows: EUR'000 Tangible fixed assets 64 Debtors 572 Cash 603 Creditors (536) Bank Overdraft (51) ------- Net assets acquired at fair value 652 Goodwill 4,675 ------- Consideration 5,327 ==== The consideration was discharged as follows: Cash paid 3,028 Deferred consideration - cash (Note 14 (a)) 2,135 Directly attributable acquisition costs 164 ------- 5,327 ==== 2. Acquisition of Careers Register (Cont'd) The summarised results for Careers Register up to the date of aquisition are as follows: 14 month period from 1 January 1999 to 29 February 2000 EUR'000 Turnover 2,923 ==== Operating profit 156 === Profit before taxation 208 === Profit after taxation 146 === The results of Careers Register since its date of acquisition has been included in the consolidated profit and loss account and can be summarised as follows: Total EUR'000 Turnover 919 Cost of sales (349) - ------ Gross Profit 570 Operating expenses (369) ------ Operating Profit, being profit before tax 201 Taxation (61) ------ Profit after tax 140 === 3. Employees The average number of employees employed during the year, including executive directors, was as follows: 2000 1999 Recruitment consultants 76 50 Temporary contractors 170 111 Management and administration 19 15 ------------------ 265 176 ================== Their remuneration was as follows: 2000 1999 EUR'000 EUR'000 Wages and salaries 6,811 4,390 Social welfare costs 678 382 Pension contributions 124 104 --------------------- 7,613 4,876 =================== In addition to the temporary contractors above, the Group had, on average, 157 self-employed contractors on its books during the year ended 30 June 2000. 4. Interest Payable and Similar Charges 2000 1999 EUR'000 EUR'000 On bank loans and overdrafts repayable within 5 years 13 17 On bank loans payable after 5 years 14 17 Finance lease charges 14 14 ------------------ 41 48 ================== 5. Statutory and other information 2000 1999 EUR'000 EUR'000 Directors' remuneration Executive Directors - salaries and other emoluments 384 356 - performance related bonus 145 - - pensions (Note 21) 100 100 ------------------ 629 456 ------------------ Non-executive Directors - fees 69 - ------------------ Total Directors' remuneration 698 456 ------------------ Auditors' remuneration 20 20 ================== Operating lease rentals, principally in respect of premises 250 171 ================== 6. Taxation on Ordinary Activities 2000 1999 EUR'000 EUR'000 Corporation tax @ 26% (1999 - 30%) 1,211 968 =================== The Group had no unprovided deferred taxation at 30 June 2000 (1999 - Nil). 7. Profit for the Financial Year As permitted by Section 3 (2) of the Companies (Amendment) Act, 1986, the profit and loss account of the Company is not presented in these financial statements. The profit for the year retained by the Company amounted to EURNil (1999: EURNil). 8. Dividends paid and proposed 2000 1999 EUR'000 EUR'000 Dividend paid of EUR0.5 cents (1999 - Nil) per Ordinary Share 182 - Dividend proposed of EUR0.5 cents (1999 - Nil) per Ordinary Share 182 - ------------------ 364 - ================== 9. Earnings Per Share The basic profit per ordinary share is calculated on the basis that the weighted average number of shares in issue for the year ended 30 June 2000 is 36,196,825 (30 June 1999 - 33,213,263). The diluted earnings per share is calculated on the basis that the diluted weighted average number of shares in issue for the year ended 30 June 2000 is 37,126,444 (1999 - 33,288,094). The weighted average number of shares in issue is diluted for the effects of the conversion of options (Note 16). 10. Tangible Fixed Assets Fixtures Motor Buildings Equipment Fittings & Vehicles Total EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 Cost Balance, 30 June 1999 552 351 200 31 1,234 Additions - 452 104 84 640 Disposals - (12) - (71) (83) ------------------------------------------------- Balance, 30 June 2000 552 791 304 144 1,791 ================================================ Accumulated Depreciation Balance, 30 June 1999 10 94 35 55 194 Charge for the year 11 88 52 40 191 Disposals - (3) - (9) (12) ------------------------------------------------- Balance, 30 June 2000 21 179 87 86 373 ================================================= Net Book Value At 30 June 1999 542 257 165 76 1,040 ============================================== At 30 June 2000 531 612 217 58 1,418 =============================================== 10. Tangible Fixed Assets (Cont'd) Depreciation relating to leased assets, comprising motor vehicles and equipment, amounted to EUR56,000 in the year ended 30 June 2000 (1999 - EUR43,000). The net book value of leased assets at 30 June 2000 is motor vehicles - EUR29,000 (1999 - EUR34,000) and equipment - EUR27,000 (1999 - EUR9,000). 11. Intangible Assets - Goodwill EUR'000 Cost Balance 30 June 1999 - Arising on acquisition during the year (Note 2) 4,675 ------- Balance 30 June 2000 4,675 ==== Amortisation Balance 30 June 1999 - Amortised during the year 57 -------- Balance 30 June 2000 57 ==== Net Book Amount at 30 June 2000 4,618 ==== 12. Financial Fixed Assets At 30 June 2000 the Company had the following subsidiaries: Name Principal Activity Computer Placement Limited Recruitment and placement of permanent technology staff CPL Solutions Limited Recruitment and placement of temporary technology staff Elisette Limited (trading Recruitment and placement of as Careers Register) permanent and temporary financial staff Careers Register Limited Dormant Tallas Limited Dormant All subsidiaries are wholly-owned and have their registered office at 83 Merrion Square, Dublin 2. 13. Debtors: Amounts due within one year 2000 1999 EUR'000 EUR'000 Trade debtors 8,501 6,884 Prepayments and other debtors 116 63 Amounts due from subsidiary undertakings - - -------------------- 8,617 6,947 ===== ===== 14. Creditors: Amounts falling due in less than one year 2000 1999 EUR'000 EUR'000 Bank overdraft 175 697 Bank loans (Note 15) 527 - Finance lease obligations 75 77 Trade creditors and accruals 3,051 2,373 Deferred purchase consideration (a) 1,225 - Corporation tax 1,171 978 Value added tax 438 245 PAYE/PRSI 272 110 Amounts due to shareholders - 2,264 Amounts due to subsidiary undertakings - - Dividends payable 182 - ------------------------ 7,116 6,744 ======================== (a) Deferred purchase consideration arises in respect of the acquisition of Careers Register, and comprises deferred cash consideration and earn out obligations. Deferred cash consideration becomes payable in April 2001 if each of the two principal vendors is an employee of the Group in April 2001. Earn out obligations are payable in cash in April 2002 and are based on the operating results of Careers Register in the period from its acquisition to that date. The amount included in respect of earn out obligations is the maximum payable under the agreement, and represents the Directors' current best estimate of the final amount that will ultimately become payable. Deferred purchase consideration is discounted at a loan interest rate. 15. Creditors: Amounts falling due after more than one year Group bank loans at 30 June 2000 are as follows: EUR'000 - loan to finance acquisition of Limerick premises (i) 393 - loan to finance acquisition of Careers Register (ii) 1,520 --------- 1,913 ========= (i) A bank loan was drawn down in the year ended 30 June 1998 to finance the purchase of the Group's Limerick premises. It is repayable over 20 years to 2018, and is secured by way of a fixed charge over the property and personal guarantees from two of the directors, Anne Heraty and Paul Carroll. (ii) A bank loan was drawn down in the year ended 30 June 2000 to finance the purchase of Careers Register. This loan is repayable over three years and is secured by a floating charge over the assets of the Company. Group bank loans are repayable as follows: EUR'000 * within one year 527 ------- * between one and two years 428 * between two and five years 756 * after five years 202 ------- * due after one year 1,386 ------- 1,913 ======= ==== 16. Called Up Share Capital 2000 1999 EUR'000 EUR'000 Authorised: 50,000,000 ordinary shares at EUR0.10 each 5,000 5,000 ======================= Issued, Called Up and Fully Paid 36,196,825 ordinary shares at EUR0.10 each 3,620 3,620 ======================= Under the terms of a share option scheme established on 3 June 1999, at 30 June 2000, 1,032,000 options over ordinary shares had been granted to employees of the Company (1999 - 1,032,000). These options are exercisable at EUR0.10 per share on or after 25 June 2002. 17. Share Premium 2000 1999 EUR'000 EUR'000 Balance, start of year 1,780 - Arising on shares issued during the year - 2,010 Share issue expenses (124) (230) ----------------------- Balance, end of year 1,656 1,780 ======================= 18. Merger Reserve The merger reserve, which arises on the combination of the Company and its subsidiaries as described in the statement of accounting policies, represents the difference between the share capital of the holding company and the share capital of the other combining entities. 19. Reconciliation of Movement on Shareholders' Funds 2000 1999 EUR'000 EUR'000 Balance, start of year 5,348 1,063 Profit retained for the year 3,357 2,185 Dividends paid and proposed (364) - Issue of ordinary share capital - 5,687 Expenses in connection with share issue (124) (230) Merger reserve - (3,357) ----------------------- Balance, end of year 8,217 5,348 ======================= 20. Notes to the Consolidated Cash Flow Statement 2000 1999 EUR'000 EUR'000 (a) Reconciliation of operating profit to net operating cash flows Operating profit 4,609 3,201 Depreciation 191 99 Amortisation of Goodwill 57 - Movement in work in progress (363) (85) Movement in debtors (1,099) (3,759) Movement in creditors 686 216 ----------------------- Net Cash Inflows (Outflows) from Operating Activities 4,081 (328) ======================= (b) Returns on investments and servicing of finance Interest paid (27) (34) Interest element of finance lease payments (14) (14) ----------------------- Net cash outflow from returns on investments and servicing of finance (41) (48) ======================= (c) Capital expenditure and financial investment Payments to acquire tangible fixed assets (576) (223) Disposals of tangible fixed assets 71 - ----------------------- (505) (223) ======================= (d) Acquisitions, net of cash acquired Acquisition of Careers Register (Note 2) (2,640) - ======================= (e) Financing Issue of ordinary share capital - 2,324 Expenses paid in connection with share issue (310) (44) Loan drawn down 1,520 - Loan repayments (15) (14) Finance lease payments (42) (51) ----------------------- Net cash inflow from financing 1,153 2,215 ======================= (f) Analysis of net funds Cash at bank Bank Bank Finance Net and in hand overdraft loans leases funds EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 At 30 June 1999 4,534 (697) (408) (175) 3,254 Cash flow (1,940) 522 15 42 (1,361) New loans - - (1,520) - (1,520) ---------------------------------------------------- At 30 June 2000 2,594 (175) (1,913) (133) 373 ==================================================== 21. Pension Arrangements The Group contributes to defined contribution pension schemes for certain senior executives by way of contributions to unit linked funds. The Group's annual contributions are charged to the Profit and Loss account in the period to which they relate. See Note 3 for details of contributions made during the year. 22. Commitments and Related Party Transactions (a) The Group has an annual commitment of EUR122,000 in respect of its offices at 83 Merrion Square, Dublin 2, which are leased by the Group, at a rate determined by an independent property advisor, from Anne Heraty and Paul Carroll. The lease expires in 2017 and is subject to rent reviews every 3 years. (b) The Group also has annual commitments of EUR184,000 in respect of offices in Dublin, Belfast and Galway. These commitments expire between 2000 and 2003. (c) The Group has the following obligations under finance leases at 30 June 2000: EUR'000 Amounts payable: * within one year 75 * within two to five years 58 ------ 133 ====== (d) The Group has no capital commitments at 30 June 2000.

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