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hu 22 November 2012 15:56 A A A InterQuest has warned that trading during the summer, traditionally its strongest period, has been sluggish. As a result underlying earnings before interest, tax, depreciation and amortisation (EBITDA) will be in the region of 2.2m pounds. This does not include an exceptional credit of about 0.85m pounds to its income statement from the settlement of it warranty claim against the vendors of CCL.
Weatherly International: Canaccord Genuity raises target price from 12p to 13p, buy recommendation maintained.
CONT Some of our markets, particularly financial services, remain sluggish and visibility is poor however we expect to achieve low single digit growth in NFI in 2012 compared to prior year and several of our niche businesses continue to demonstrate encouraging growth. Correspondingly we have not seen the level of growth that we anticipated, particularly in permanent fees, in the period since late summer which is traditionally our strongest trading period. As a result, the Board expects that the underlying EBITDA for the year will be in the region of £2.2m (adjusted to remove the impact of charges related to share based payments). This does not include an exceptional credit to our income statement arising from the settlement of our warranty claim against the vendors of CCL which is expected to make a positive impact of £1.0m to the profitability of the Group with a positive cash impact this year of approximately £0.85m after paying costs associated with the claim. Our balance sheet and cash collection remain strong and year end group net debt is expected to be similar to, or slightly less than 31 December 2011. Despite current headwinds the Board remains firmly committed to its strategy and to building a strong platform for long term organic growth. We have made significant investment into the business and remain confident that our strategy will see us emerge as a much stronger IT recruitment business that is better positioned with our clients and better able to capture opportunities for growth. For further information please contact:
Trading Update InterQuest Group plc (AIM: ITQ), the specialist technology recruitment group, provides an update on trading. As we noted earlier in the year we have continued the restructuring of our business to align our strategy towards sectors of the market we believe will provide us with increased opportunities for future growth. We have made deliberate and targeted investments in several areas including our first overseas office in Singapore, consolidating our Financial Services businesses onto a single operating platform in a new office in Canary Wharf, investment in new fee earners and migration of all of our candidate-centric recruitment business into a single, separate practice aimed at placing niche candidates into niche roles rather than just filling vacancies. We have made these investments for the medium/long term at the expense of short term 2012 profit and are confident that we are building a platform for increased organic growth in the future.
InterQuest Group plc ("InterQuest", "the Company" or "the Group") Directors' Dealings IT staffing specialist, InterQuest Group plc (AIM: ITQ.L), was notified on 13 November 2012 that on the same day Gary Ashworth, Executive Chairman, bought 10,000 Ordinary Shares of 1 pence each in the share capital of the Company ("Ordinary Shares"), at a price of 45.75 pence per Ordinary Share. Furthermore, on 13 November 2012, 573,120 Ordinary Shares were transferred from a nominee account to Mr Ashworth having been previously transferred from Mr Ashworth to the nominee account on 22 December 2009. Mr Ashworth was previously and remains beneficial owner of these shares. Following these transactions Gary Ashworth now holds 12,754,912 Ordinary Shares which represents 38.47% of the Company's total voting rights.
Specialist IT recruitment company InterQuest is to receive £1m as an out of court settlement from the vendors of CCL and should receive the money by December 7th 2012. As a result of the settlement InterQuest has discontinued its warranty claim. The settlement was reached on the basis that the vendors of CCL made no admission of liability or of wrongdoing in any respect relating to the subject matters of the claim. Background InterQuest purchased the entire share capital of CCL on June 21st 2011 for a consideration of £4m. On August 12th 2011, a major client of CCL terminated its contract with CCL. On December 23rd 2011, Interquest announced that it had issued formal notice against the vendors of CCL that it would be pursuing a warranty claim for a repayment of consideration of around £3.8m.
Cant see the market liking any of this today
Outlook Trading conditions have deteriorated since the start of the year, both in the UK and Far East, particularly in the second quarter and particularly in the banking and finance sectors from which we derive 25% of our net fee income. Consequently, we now expect that it will take a little longer than originally anticipated for all our new investments to reach profitability. However, as a direct result of our expertise and concentrated effort in specialist markets, we have seen improvements in revenue growth and margin in key sectors such as ERP, ESM (Enterprise Systems Management), Analytics, Digital and Retail. Our balance sheet remains healthy and we have significant headroom within our banking facilities. The Company therefore retains the ability to buy back its own shares in the market should the Board consider this in the long term interest of shareholders and is committed to maintaining its dividend. Despite current headwinds, the Board remains firmly committed to its strategy and to building a strong platform for long term organic growth. We have made significant investment into the business and remain confident that our strategy will see us emerge as a much stronger IT recruitment business that is better positioned with our clients and better able to capture opportunities for growth.
Gary Ashworth, Chairman of InterQuest, commented "The first half of 2012 has been a period of significant change for the Group,the fruits of which will begin to be borne out in the second half of this financial year and beyond. We have restructured and rebranded our niche focused core businesses and established a separate candidate-centric business plus an International desk in London, to complement our Singapore office that opened in late 2011. We have made these investments for the medium/long term at the expense of short term 2012 profitability and, while such investment is not made lightly, we are confident that InterQuest is building a platform for improved organic growth in the future."
Operational highlights § First overseas office opened in Singapore in Q4, 2011 which now has 13 fee earners; § In February, our Financial Services businesses moved onto a single operating platform under one business leader in a new office in Canary Wharf; § In March, we established a new international business from scratch based in our London office; § In March, we migrated all of our candidate-centric recruitment business into a single, separate practice aimed at placing niche candidates into niche roles rather than just filling vacancies; § Gary Goldsmith joined us as Chief Operating Officer on 17 February; and § We have increased the number of fee earners in the Group from 169 in December 2011 to 194 currently.
Interim Results InterQuest Group plc (AIM: ITQ), the specialist IT Recruitment Group, is pleased to announce its unaudited interim results for the six months ended 30 June 2012. Financial highlights § Revenue down 6% to £55,809k (2011: £59,055k) § Net Fee Income ("NFI") up 6% to £8,289k (2011: £7,812k) § Gross margin % improved from 13.2% to 14.9% § Permanent recruitment fees 20% higher at £2,748k (2011: £2,283k) § Improvement in contract recruitment margins from 10.5% in the first half of 2011 to 11.5% in the first half of 2012. § Adjusted EBITA down 39% to £1,072k (2011: £1,760k) § Adjusted PBT of £932k (2011: £1,665k) § Diluted adjusted earnings per share 2.2 pence (2011: 3.8 pence) § Basic earnings per share 1.2 pence (2011: Loss of (5.6) pence) § Net cash used in operating activities £0.2m (2011: Net cash generated of £2.5m) § Net debt £6.4m (2011: £5.4m) § Interim dividend of 0.5 pence to be paid on 26 October 2012
http://www.investegate.co.uk/Article.aspx?id=201209120700080444M
SPOT - SP is currently around 39 so it has made up the bulk of Tuesdays drop - not sure if she will hold that. I could not buy on Tuesday but I will be watching for any dips from here. As you say - one to have when economies are back on track
I'm wondering if one of the larger groups might see the weakness in the SP as a chance to launch a bid. Yesterday's warning was more about timing than any fundamental problem, and there is clearly scope for significant improvement when the economy finally picks up - which it will eventually, even if we don't know exactly when! Bigger players already trade on much higher ratings than the likes of ITQ so an acquisition like this could easily be earnings enhancing. Maybe the uncertainly over the claim against CCL might be a negative factor, but otherwise I'd say it is vulnerable at present levels.
down 10p. 31 - 32
Does not look like being a good day
Outlook Trading conditions have deteriorated since the start of the year, both in the UK and Far East, particularly in the second quarter and particularly in the banking and finance sectors from which we derive 27% of our net fee income. Consequently, we now expect that it will take a little longer than originally anticipated for all our new investments to reach profitability. However, as a direct result of our expertise and concentrated effort in specialist markets, we have seen improvements in revenue growth and margin in key sectors such as ERP, ESM (Enterprise Systems Management), Analytics, Digital and Retail . Our balance sheet remains healthy and we have significant headroom within our banking facilities. The Company therefore retains the ability to buy back its own shares in the market should the Board consider this in the long term interest of shareholders and is committed to maintaining its dividend. Despite current headwinds the Board remains firmly committed to its strategy and to building a strong platform for long term organic growth. We have made significant investment into the business and remain confident that our strategy will see us emerge as a much stronger IT recruitment business that is better positioned with our clients and better able to capture opportunities for growth.
Specifically, we have made deliberate and targeted investments in several areas: · We opened our first overseas office in Singapore in Q4, 2011 which now has 13 fee earners; · In February we moved all our Financial Services businesses onto a single operating platform under one business leader in a new office in Canary Wharf; · In March we established a new international business from scratch based in our London office; · In March, we migrated all of our candidate-centric recruitment business into a single, separate practice aimed at placing niche candidates into niche roles rather than just filling vacancies; · Gary Goldsmith joined us as Chief Operating Officer on 17 February; and · We have increased the number of fee earners in the Group from 169 in December 2011 to 198 currently. We have made these investments for the medium/long term at the expense of short term 2012 profit and are confident that we are building a platform for increased organic growth in the future. The combined impact on profitability of the investments and restructuring is expected to be in the region of £1.6 million for the year to 31 December 2012. We also continue to pursue our warranty claim against the vendors of CCL with vigour.
Trading Update InterQuest Group plc (AIM: ITQ), the specialist IT Recruitment Group, today provides an update on trading for the six months ended 30 June 2012 ahead of the release of its interim results on 12 September 2012. Set against a difficult market backdrop, particularly in the banking and finance sectors, the business as a whole has performed robustly growing both net fee income and gross margins over our first half performance last year. In particular the performance of the non banking and finance sectors particularly Analytics, Digital, ERP and ESM (Enterprise Systems Management) has been encouraging and the group continues to benefit from having a healthy balance of both permanent and contractor based revenue streams which mitigate volatility. However, particularly tough trading conditions in the banking and finance sector have impacted performance. For the six months ended 30 June 2012: · our net fee income is approximately 6% higher than the first half of 2011 (£7,812,000); · we have seen net fee income growth of 17% in non banking sectors compared to the first half of 2011; · our gross margin % has improved from 13.2% in the first half of 2011 to 14.9% in the first half of 2012; · EBITDA in the first half is expected to be in the region of £1.15m (2011: £1.86m) · we have seen 20% growth in permanent recruitment fees versus the first half of 2011; and · we have seen improvement in contract recruitment margins from 10.5% in the first half of 2011 to 11.5% in the first half of 2012. As noted in the announcement of our 2011 results on 6 March 2012, during the first half of 2012 we have continued the restructuring of our business to align our strategy towards sectors of the market we believe will provide us with increased opportunities for future growth.
http://www.investegate.co.uk/Article.aspx?id=201208070700074274J
Termination of Contract within CCL InterQuest Group plc (AIM: ITQ.L) announces that due to apparent impropriety and alleged fraud within a major client of the recently acquired Contract Connections Limited ("CCL"), the client has terminated its contract with CCL ("the Termination"). The client has withheld, pending an ongoing investigation, £0.6 million owed to CCL which has arisen during the normal course of business. In the opinion of the Board and its legal advisors, the Termination represents a breach of the contract between CCL and the client. The Board therefore believes that there will be a path to seeking restitution and potentially damages in due course. However, in light of these circumstances, the Board believes it would be appropriate to impair both the receivable (£0.6 million) and the related goodwill arising on the business combination (£2.0 million), totalling approximately £2.6 million. As such, while the Group as a whole continues to trade well and the Board continues to explore expansion opportunities, the Group's results for the year ending 31 December 2011 will be adversely impacted. The Termination is not considered material in relation to the prospects of the Group in future financial periods as it will reduce the number of contractors currently on assignment by approximately 40 out of a total in excess of 1200 across the Group. Outside of CCL, the Group continues to trade in-line with the Board's expectations, delivering revenue growth and increasing levels of profitability. The Board will update investors on this issue as and when appropriate and, as previously notified, will announce results for the half year ended 30 June 2011 on 13 September 2011.
http://www.investegate.co.uk/Article.aspx?id=201108120700102471M
http://www.investegate.co.uk/Article.aspx?id=201105270700093951H