6 Sep 2012 07:00
6 September 2012
Cpl Resources plc
Results for the Full Year Ended 30 June 2012
Dublin, 6 September 2012: Cpl Resources plc (the 'Group' or the 'Company'), Ireland's leading employment services group, today announced results for the year ended 30 June 2012.
Full Year Highlights
·; Record revenues of €290 million, up 23% on last year
·; 39% increase in operating profit to €10.0 million
·; Earnings per share increased by 33.33% to 25.6 cent)
·; Total dividend per share of 6.5 cent (2011: 5.0 cent)
·; Return of €20 million to our shareholders
John Hennessy, Chairman commented:
"At the end of a challenging year, I am pleased to report that the Group has responded positively to difficult trading conditions, identified opportunities presented by the changed environments in the markets in which we operate, and has consequently been able to deliver growth and improved profitability across the business.
Cpl has a strong balance sheet, with net free funds at year-end of €28 million. These balances remain after payments to shareholders totalling €21.8 million during the year to 30 June 2012."
Anne Heraty CEO added:
"The Cpl Group is dedicated to providing businesses and individuals with a high-quality, comprehensive and integrated service. Our clients value our commitment to flexibility and appreciate the talents and skills we offer them now more than ever. We are encouraged by the increase in demand for our services.
2012 was a year of significant progress for Cpl. Our revenue was the highest in the company's 22 year history and we have again demonstrated resilience in difficult market conditions. Our focus will continue to be on looking for opportunities in those sectors and geographies that are doing well, while continuing to monitor carefully our cost base."
For Further Information:
Anne Heraty, CEO, CPL Resources: +3531 614 6000
Josephine Tierney, Finance Director: +353 1 614 6000
Ivan Murphy/ Daragh O'Reilly, Davy Corporate Finance: +353 1 679 6363
Conall O Móráin, The Media Group: +353 872 463111
Cpl Resources Plc
Chairman's statement
The year ended 30 June 2012 has been one of strong organic growth for the Group.
Full Year Highlights
Highlights | 2012 | 2011 | % change |
€ 000 | € 000 | ||
Revenue | 290,240 | 235,311 | 23.3% |
Gross profit | 43,538 | 37,041 | 17.5% |
Operating profit | 10,015 | 7,189 | 39.3% |
Profit before tax | 9,754 | 8,132 | 19.9% |
Earnings per share | 25.6 cent | 19.2 cent | 33.3% |
Conversion ratios ** | |||
Operating profit | 23.0% | 19.4% | |
Profit before tax | 22.4% | 22.0% | |
Net funds | 28,030 | 46,324 |
** as % of Gross profit
The economic uncertainty in Ireland and in other markets in which we operate has not abated significantly. As with many businesses, this uncertainty, and its effects on employment and on business confidence generally, have given rise to very challenging trading conditions for the Group.
At the end of a challenging year, I am pleased to report that the Group has responded positively to difficult trading conditions, identified opportunities presented by the changed environments in the markets in which we operate, and has consequently been able to deliver growth and improved profitability across the business.
The global economy is currently faced with an ongoing skills mismatch. There is a general oversupply of available workers, but at the same time there is an undersupply of certain skills that are in demand. During the year to 30 June 2012 the Cpl team worked closely with our clients to understand their specific requirements, and with our candidates in order to match their skills to those client requirements. As a result we have delivered an 18.8% increase in gross profit from permanent placements.
Difficult economic conditions have led to businesses improving their ability to predict workforce needs, and therefore the demand for flexible workforce solutions has grown. We have been alive to these developments and we continue to adapt our service offerings to meet our clients' changing requirements. This has resulted in a 17.0% increase in gross profit from the placement of temporary employees. All of this growth has been achieved organically.
There has been continued pressure on prices and margins throughout the 12 months to June 2012. Consistent with prior years the Group has focused on realigning our costs without affecting the quality of the service we give to our clients. These efforts have resulted in an improvement in our ratio of operating profit to gross profit, which has increased in the year to 30 June 2012 to 23.0%, up from 19.4% in the year to 30 June 2011.
During the year we acquired European Human Resources AB, ("EHRAB"). EHRAB is based in Sweden and is engaged in providing human resource solutions for companies within the Scandinavian market. The acquisition of EHRAB represents a further step in Cpl's strategy of extending the Group's international footprint.
I am pleased to record continued profitable growth in our businesses outside Ireland. We now operate in eight countries and our operations in all of those countries are performing well and continuing to grow.
People
During the year we have recruited a number of new professionals into the business across various key roles, and they are most welcome to the team.
Our business is all about ensuring that our clients have the right people when they need them, and we can only do this by having the best people ourselves. I am very proud of the Cpl team. They continue to demonstrate their skills, talents and abilities daily, for the benefit of our clients and our candidates, and I thank them for their ongoing hard work and commitment to the Group.
Tender Offer
During the year to 30 June 2012 we announced a Tender Offer to return up to €20 million in surplus capital to shareholders by acquiring some of their shares in Cpl. The Board was pleased to note that the Tender Offer was fully taken up. The Group purchased 6,666,666 shares at €3.00 per share. All shares acquired have been cancelled, and this has given rise to a positive effect on the Group's earnings per share.
In the year to 30 June 2011, the Group reported progress against all financial and operating measures. A strong operating cash flow performance within the period increased the Group's net cash balance from €43.4 million to €46.3 million.
Throughout 2011, the Board considered a range of strategic and financial options to enhance Shareholder value. The Board, in consultation with its advisors, reviewed a number of factors including:
·; the Group's expected capital requirements relative to the strength of its Balance Sheet together with its ongoing cash flow generation;
·; the interest income generated by the Group's cash balance; and
·; acquisition and investment opportunities
Following this review, and having regard to the views of certain institutional shareholders that had made unsolicited approaches relating to a potential return of capital to shareholders, the Board (with the exception of Anne Heraty and Paul Carroll, who absented themselves from deliberations relating to the proposed Tender Offer) unanimously determined that a return of surplus capital was in the best interests of Shareholders as a whole. The Board believed that a return of capital in the amount proposed represented the most effective use of those shareholder funds and that the continued strength of the Group's balance sheet, and its cash flow generation after the return of those funds, would be sufficient to pursue the Group's stated growth objectives.
An independent committee of the Board, comprised of independent non-executive directors Breffni Byrne and Oliver Tattan, was formed to consider and settle the terms and conditions of the Tender Offer, including the Tender Price.
Earnings per Share
The Group has delivered a 33.3% increase in earnings per share in the twelve months to June 2012, to 25.6 cent. This increase reflects the increase in profits and the positive impact following the repurchase of shares in November 2011.
Dividend & Dividend Policy
The Board's current priorities for our free cash flow are to maintain the strength of our balance sheet, to allow the Group to optimise opportunities to drive organic growth and fund Group development through appropriate acquisitions, and to support a sustainable dividend policy. The Group has a progressive dividend policy which reflects underlying earnings growth and the continued strength of the Group's balance sheet.
The Board is recommending a final dividend of 3.5 cent per share. This will bring the total dividend for the year to 6.5 cent per share. The dividend, if approved by the shareholders, will be payable on 5 November 2012 to shareholders on the company's register at the close of business on the record date of 12 October 2012.
Balance sheet
The Group is cash generative and, despite increased working capital requirements during the year, the Group generated net cash from operating activities of €4.3 million for the full year. Cpl has a strong balance sheet, with net free funds at year-end of €28.0 million. These balances remain after payments to shareholders totalling €21.8 million during the year to 30 June 2012.
Governance
Mr Oliver Tattan, an independent non-executive Director, has been appointed to the Audit Committee with effect from 27 October 2011. He joins Mr Breffni Byrne, our Audit Committee Chairman and Senior Independent Director, and myself on the committee.
Outlook
Over the years the Group, through the vision, versatility and commitment to hard work of all of its people, has demonstrated an ability to overcome challenges posed by economic conditions, and to emerge stronger. The current economic downturn has been the most severe in recent history. Nevertheless, the Group continues to grow profitably through a combination of innovative service offerings, expansion organically and by acquisition, the delivery of high quality service to clients and candidates, and careful management of costs. Although accurate forecasting is very difficult in current conditions, and the markets in which we operate remain challenging, we expect the continued application of these strategies to deliver some further profitable growth in the months ahead.
John Hennessy
Chairman
6 September, 2012
Cpl Resources Plc
Chief Executive's review
I am pleased to report a strong performance for the Group in the year to 30 June 2012. Against a backdrop of continued uncertainty in the economic and legislative environment, we have delivered record sales of €290.2 million. Our operating profit of €10.0 million is an increase of 39.3% on the previous year. We have a cash balance at 30 June 2012 of €28.0 million after returning €20.0 million to our shareholders by way of a Tender Offer and an additional €1.8m by way of dividends. Our earnings per share is 25.6 cent, a 33.3% increase on the prior year. Our conversion ratio of gross profit to operating profit is 23.0%.
Economic activity continued to decline in Ireland during the year to 30 June 2012, marking the forth successive year of contraction. The Irish labour market has been hit particularly hard by the recession and unemployment figures remained high throughout the year. The seasonally adjusted unemployment rate was 14.8% in the first quarter of 2012. Further analysis of the figures indicates that the unemployed are finding it difficult to re-enter the market, with a rising number moving into long-term unemployment. At Cpl we believe it is critically important that those that are unemployed are kept aware of opportunities in the market. This increases their opportunity to get back to work so that the valuable skills that exist on the live register are not lost through periods of extended unemployment. In recognition of this need, Cpl staff and management across Ireland ran a National Jobseekers Roadshow during the year to help unemployed individuals identify and build the skills they need to access the opportunities that do exist across the labour market.
On a positive note the demand for skills in certain sectors continues to improve. Key highlights were the technology, digital services and business/shared services sectors where Ireland continues to compete very successfully. This demonstrates Ireland's ability toattract high value and high-tech industries which bring with it a broad range of job opportunities.
During the year to 30 June 2012, Cpl placed over 5,500 people in permanent jobs and over 20,000 people in temporary and long term assignments. Despite the challenging labour market conditions, we finished the year with 7,853 people working on behalf of Cpl on client projects, an increase of 1,928 in the twelve months. The most important ingredient to our success is our talented and hardworking team. They care about our candidates and are committed to getting people back to work along with developing innovative solutions for our clients to meet their changing needs.
The relevant EU legislation on the protection of temporary agency workers has come into law. Despite the short term operational challenges this has presented for the Group, I believe it has also provided us with the opportunity to work closely with our clients and candidates to ensure full compliance with the legislation. Ultimately this will present us with opportunities to deliver innovative workforce solutions.
The Cpl Group is dedicated to providing businesses and individuals with a high-quality, comprehensive and integrated service. Our clients value our commitment to flexibility and appreciate the talents and skills we offer them now more than ever. We are encouraged by the increase in demand for our services. However, we remain cognisant of the investment in working capital required to drive the organic growth in temporary fees and the impact of margin pressures. We are acutely aware of the uncertainty arising from the on-going volatility in the current economic environment, and the impact that this has on job creation. We continue to focus on the quality and flexibility of the services we provide to our clients.
Financial Highlights
The Cpl Group increased its revenue by 23.3% to €290.2 million in the year to 30 June 2012 (2011: €235.3 million). Gross profit increased by 17.5% to €43.5 million (2011: €37.0 million). The Group's gross margin declined by 0.7% to 15.0% (2011: 15.7%). Our operating profit increased by 39.3% to €10.0 million (2011: €7.2 million). Profit before tax was up 19.9% at €9.8 million (2011: €8.1 million). Our earnings per share was 25.6 cent (2011: 19.2 cent).
Our operating expenses were €33.5 million, 12.3% higher than last year. As our performance improved throughout the year we invested in hiring skilled people, staff training and our IT systems. We continue to balance cost management with the need to invest in the future.
As at 30 June 2012 we had a net cash balance of €28.0 million (2011: €46.3 million). During the year we returned €20.0 million to our shareholders by way of a Tender Offer. We also returned €1.8 million by way of dividends. During this period, we paid our shareholders an interim dividend of 3.0 cent per share. The Board is recommending a final dividend of 3.5 cent per share for the year to 30 June 2012. The total dividend per share for the year is 6.5 cent.
€5.6 million cash was generated from operations in the full year to 30 June 2012. Our revenues grew by €54.9 million, resulting in an increased investment in working capital. Trade debtors grew to €35.5 million at 30 June 2012 from €29.6 million at 30 June 2011. We continue to actively manage our debtors and have not experienced any increase in the level of bad debts during the year. Despite our strong cash conversion, our interest income declined by 48.2%. This was due to lower cash balances following the tender offer.
Operations Review
Cpl is a successful Group with a strong balance sheet which has grown over the last twenty two years, both organically and through acquisition. The Cpl Group offers a flexible portfolio of recruitment, outsourcing and HR solutions to the public and private sectors.
Cpl offers a diverse range of services to over 1,500 clients each year. These services can be broadly categorised as temporary staffing, permanent recruitment, managed services and outsourcing. Our principal activities cover many sectors including: Technology, Sales, Marketing, Science, Engineering, Supply Chain, Healthcare, Pharmaceuticals, Retail, Human Resources, Multilingual, Industrial and Customer Services.
We provide these services to local customers and multinationals through a network of 24 offices in Ireland, England, Spain, Poland, Slovakia, Czech Republic, Sweden and Hungary. Our business is based on matching the capabilities of our candidates and employees with the need of our clients to get work done. We achieve this by:
·; Placing candidates in jobs with our clients
·; Staffing client projects with our agency employees and contractors
·; Employing staff in our service centres to work on a subcontract basis
Some of our key performance indicators are outlined below.
Key Performance Indicators
2012 | 2011 | |
Gross margin | 15.0% | 15.7% |
Operating margin | 3.4% | 3.1% |
Conversion Ratio | ||
Operating profit as % of gross profit | 23.0% | 19.4% |
Profit before tax as % of gross profit | 22.4% | 22.0% |
Permanent fees as % of the total gross profit | 31.2% | 30.8% |
Temporary fees as % of the total gross profit | 68.8% | 69.2% |
Contractor and temporary staff headcount at the year end | 7,853 | 5,925 |
Number of recruitment consultants at the year end | 314 | 307 |
We grew our revenue from temporary business to €276.7 million, an increase of 23.6%. However, as highlighted previously, there have been continued demands from clients for cost reductions and lower margins. This has had a negative impact on our average margin earned on temporary revenues. Our gross margin fell by 0.7% to 15.0% in the year to 30 June 2012. Permanent revenue increased by 18.8% to €13.6 million. Gross profit from permanent placement accounts for 31.2% of the total gross profit.
One of our stated objectives last year was to improve our operational leverage. We achieved this in the year to 30 June 2012 by converting 23.0% of our gross profit to operating profit (2011: 19.4%).
On the back of strong revenue growth we achieved an improvement in our operating margin to 3.4% in the year to 30 June 2012, up from 3.1% in the year to 30 June 2011.
Permanent Placement
In recent years, firms have placed a greater focus on productivity in an effort to win market share. However, there comes a point at which increasing volume of activity necessitates greater levels of employment. Employment is expected to rise moderately in 2012-2013 and this increase, allied to the shortage of skills in certain sectors, should continue to drive demand for permanent placement. In our permanent business we focus on hiring talent for clients predominantly in financial services, technology, retail, pharma/healthcare, and support services.
In the year to 30 June 2012 permanent fees increased by 18.8% to €13.6 million (2011: €11.4 million). Permanent fees generated in offices outside Ireland grew by 18.0%.
Temporary Staffing
Economic slowdown and uncertainty results in fluctuating demand for products and services. We are seeing companies hire "just in time", adjusting talent as they would any other resource. Companies are relying on innovative temporary solutions that allow them to recruit personnel based on the variable demands of the business. Our clients wish to remain versatile and this leads to greater demand for a flexible workforce.
In the year to 30 June 2012 Cpl has continued to develop our competence in the provision of fully outsourced services that are complex and difficult to replicate, which usually require a combination of a European language and a technical skill. These include regulated activities in insurance and banking call centres and sales activities that are focused on successful outcomes.
Fees generated from temporary assignments continued to grow in the year to 30 June 2012. Temporary revenue was €276.7 million (2011: €223.9 million) representing 23.6% growth. We generated €30 million gross profit, 17.2% higher than the year to 30 June 2011. The temporary staffing market is highly competitive. Against this backdrop we are very pleased to have increased the number of people placed with our clients, on behalf of Cpl Group, by 32.5%.
Overseas business
We had a successful year in our international divisions in the year to 30 June 2012. We continue to expand our client base and service offerings overseas and have become firmly established as a provider of managed service solutions outside Ireland. The numbers employed in our international locations have increased by 550 in the year. 37.0% of our permanent fees and 7.0% of our temporary fees now come from outside of Ireland. We are focused on organic growth in Central and Eastern Europe as we believe many of these markets are still in the early stage of growth. We have made our first investment in Scandinavia and plan to build scale in the coming years.
Legal environment
The EU Directive on Temporary Agency Work has been enacted. Cpl is well positioned to protect our clients and candidates by ensuring we are compliant with the legislation.
Acquisitions
During the year Cpl acquired European Human Resources AB, ("EHRAB"). EHRAB is engaged in providing human resource solutions for companies within the Scandinavian market. We plan to use this as a platform and drive organic growth within the Scandinavian market.
Strategy
We continued to focus on delivering our strategy. Key elements of that strategy outlined in last year's report include developing a balanced business mix and therefore avoiding overdependence on any one service, sector, or geography. Our focus has been mainly on organic expansion, while using selective acquisitions to build platforms in new sectors or markets with good long term potential. To deliver our strategy, one of our goals is to build on our organisation capacity by attracting and retaining key skills and talent, building world class business processes underpinned by effective IT systems and increasing our productivity. To meet this goal we are building a strong culture that is underpinned with a clear set of values that guide how the business operates. Our values guide how we behave and make decisions which affect our clients, our candidates, our colleagues and our shareholders. We believe our culture has a strong impact on performance. In January 2012 we committed to 'Raising the Bar' and re-engaging with our values. Our five values underpin everything that we do in the Cpl Group and are representative of where we want to be as a business both now and in the future.
Customer Focus - Excellence in everything we do for our clients & internal customers, including a commitment to innovation.
Accountability - It is not just about your part of the job or task, it is about seeing the whole job through to the end, "It is not done until it is all done".
Respect - Integrity, fairness, listening, co-operation, responsiveness and perceptiveness.Effective Communication - Clarity in communication, openness and willingness to listen ensures understanding of the request.
Empowerment - Enabling and supporting people to maximise their potential. An entrepreneurial spirit and passion for the work we do.
People
Our results are a team effort and I would like to thank our clients, colleagues and our Board for their continued commitment and support. As we continue to grow our business we are committed to enhancing the work environment for all Cpl employees through living our values and investing in their ongoing training and development.
Outlook
2012 was a year of significant progress for Cpl. Our revenue was the highest in the company's 22 year history and we have again demonstrated resilience in difficult market conditions. Our focus will continue to be on looking for opportunities in those sectors and geographies that are doing well, while continuing to carefully monitor our cost base. We are mindful of the economic environment and its impact on our business. However, we believe that by giving our clients a competitive edge through delivery of efficient and flexible staffing solutions we will continue to grow our market share.
Anne Heraty
Chief Executive
6 September, 2012
Cpl Resources Plc
Group Statement of Comprehensive Income
for the year ended 30 June 2012
2012 | 2011 | ||
€'000 | €'000 | ||
Revenue | 290,240 | 235,311 | |
Cost of sales | (246,702) | (198,270) | |
Gross profit | 43,538 | 37,041 | |
Distribution expenses | (2,555) | (2,354) | |
Administrative expenses | (30,968) | (27,498) | |
Operating profit | 10,015 | 7,189 | |
Financial income | 501 | 967 | |
Financial expenses | (762) | (24) | |
Profit before tax | 9,754 | 8,132 | |
Income tax expense | (1,364) | (973) | |
Profit for the financial year- all attributable to equity | |||
shareholders | 8,390 | 7,159 | |
Other comprehensive income | |||
Foreign currency translation differences - foreign operations | 49 | 28 | |
Total comprehensive income for the year - all | |||
attributable to equity shareholders | 8,439 | 7,187 | |
Basic earnings per share | 25.6 cent | 19.2 cent | |
Diluted earnings per share | 25.6 cent | 19.2 cent |
Cpl Resources Plc
Group Statement of Changes in Equity
for the year ended 30 June 2012 |
Capital | Capital | ||||||||
redemption | conversion | Currency | Share | Non- | ||||||
Share | Share | reserve | reserve | Merger | translation | Retained | Holders | controlling | Total | |
capital | premium | fund | fund | reserve | reserve | earnings | Equity | interest | equity | |
€'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
Balance at 30 June 2010 | 3,720 | 1,705 | - | 57 | (3,357) | - | 60,869 | 62,994 | 71 | 63,065 |
Total comprehensive income for the year | ||||||||||
Profit for the financial year | - | - | - | - | - | - | 7,159 | 7,159 | - | 7,159 |
Foreign currency translation effects | - | - | - | - | - | 28 | - | 28 | - | 28 |
Transactions with owners | ||||||||||
Dividends paid | - | - | - | - | - | - | (1,860) | (1,860) | - | (1,860) |
Purchase of non-controlling interest | - | - | - | - | - | - | 11 | 11 | (71) | (60) |
Balance at 30 June 2011 | 3,720 | 1,705 | - | 57 | (3,357) | 28 | 66,179 | 68,332 | - | 68,332 |
Balance at 1 July 2011 | 3,720 | 1,705 | - | 57 | (3,357) | 28 | 66,179 | 68,332 | - | 68,332 |
Total comprehensive income for the year | ||||||||||
Profit for the financial year | - | - | - | - | - | - | 8,390 | 8,390 | - | 8,390 |
Foreign currency translation effects | - | - | - | - | - | 49 | - | 49 | - | 49 |
Transactions with owners | ||||||||||
Capital redemption | (667) | - | 667 | - | - | - | (20,000) | (20,000) | - | (20,000) |
Dividends paid | - | - | - | - | - | - | (1,847) | (1,847) | - | (1,847) |
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Balance at 30 June 2012 | 3,053 | 1,705 | 667 | 57 | (3,357) | 77 | 52,722 | 54,924 | - | 54,924 |
Cpl Resources Plc
Company Statement of Change in Equity
for the year ended 30 June 2012
Capital | Capital | |||||
redemption | conversion | |||||
Share | Share | reserve | reserve | Retained | Total | |
capital | premium | fund | fund | earnings | equity | |
€'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
Balance at 1 July 2010 | 3,720 | 1,705 | - | 57 | 4,603 | 10,085 |
Total comprehensive income | ||||||
for the year | ||||||
Profit for the financial year | - | - | - | - | 21,030 | 21,030 |
Transactions with shareholders | ||||||
Dividends paid | - | - | - | - | (1,860) | (1,860) |
Balance at 30 June 2011 | 3,720 | 1,705 | - | 57 | 23,773 | 29,255 |
Balance at 1 July 2011 | 3,720 | 1,705 | - | 57 | 23,773 | 29,255 |
Total comprehensive income | ||||||
for the year | ||||||
Profit for the financial year | - | - | - | - | 2,397 | 2,397 |
Transactions with shareholders | ||||||
Capital redemption | (667) | - | 667 | - | (20,000) | (20,000) |
Dividends paid | - | - | - | (1,847) | (1,847) | |
Balance at 30 June 2012 | 3,053 | 1,705 | 667 | 57 | 4,323 | 9,805 |
Cpl Resources Plc
Group and Company Balance Sheets
as at 30 June 2012
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Cpl Resources Plc
Group and Company Balance Sheets (continued)
as at 30 June 2012
Group | Company | ||||
2012 | 2011 | 2012 | 2011 | ||
€'000 | €'000 | €'000 | €'000 | ||
Liabilities | |||||
Non-current liabilities | |||||
Financial liabilities | 25 | 45 | - | - | |
Provisions | 1,740 | 625 | 1,740 | 625 | |
Total non-current liabilities | 1,765 | 670 | 1,740 | 625 | |
Current liabilities | |||||
Bank overdraft | 17 | 48 | - | - | |
Financial liabilities | 8 | 79 | - | - | |
Trade and other payables | 37,181 | 31,235 | 68,624 | 60,161 | |
Current tax payable | 521 | 121 | - | 1 | |
Provisions | 830 | 405 | 830 | 405 | |
Total current liabilities | 38,557 | 31,888 | 69,454 | 60,567 | |
Total liabilities | 40,322 | 32,558 | 71,194 | 61,192 | |
Total equity and liabilities | 95,246 | 100,890 | 80,999 | 90,447 | |
Cpl Resources Plc
Group and Company Cash Flow Statements
for the year ended 30 June 2012
Group | Company | ||||
2,012 | 2,011 | 2,012 | 2,011 | ||
€'000 | €'000 | €'000 | €'000 | ||
Cash flows from operating activities | |||||
Profit for the financial year | 8,390 | 7,159 | (1,623) | 21,030 | |
Adjustments for: | |||||
Depreciation on property, plant and | |||||
equipment | 330 | 467 | 37 | 35 | |
Amortisation of intangible assets | 255 | 874 | 35 | 32 | |
Financial income | (501) | (967) | (620) | (998) | |
Financial expense | 762 | 24 | 750 | - | |
Income tax expense | 1,364 | 973 | - | 47 | |
Operating cashflows before changes in | |||||
working capital and provisions | 10,600 | 8,530 | (1,421) | 20,146 | |
(Increase) in trade and other receivables | (10,655) | (6,945) | (6,280) | (16,124) | |
Increase/(decrease) in trade and other | |||||
payables and provisions | 5,622 | 3,978 | 9,863 | (5,491) | |
Cash generated from operations | 5,567 | 5,563 | 2,162 | (1,469) | |
Interest (paid) | (12) | (24) | - | - | |
Income tax (paid) | (1,724) | (697) | (10) | (2) | |
Interest received | 465 | 1,470 | 440 | 1,501 | |
Net cash from operating activities | 4,296 | 6,312 | 2,592 | 30 | |
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Cash flows from investing activities | |||||
Acquisition of business, net of cash | |||||
acquired | (204) | (1,215) | (300) | (1,199) | |
Deferred consideration paid | (100) | (9) | (100) | - | |
Purchase of property, plant and | |||||
equipment | (334) | (264) | (58) | (134) | |
Purchase of intangible assets | (14) | (31) | - | (36) | |
Transfer from/(to) short term deposits | 3,824 | (8,000) | 3,824 | (8,000) | |
Proceeds from sale of land previously | |||||
classified as held for sale | - | 150 | - | - | |
Net cash from /(used in) investing activities | 3,172 | (9,369) | 3,366 | (9,369) | |
Cpl Resources Plc
Group and Company Cash Flow Statements (continued)
for the year ended 30 June 2012
Group | Company | |||||
2012 | 2011 | 2012 | 2011 | |||
€'000 | €'000 | €'000 | €'000 | |||
Cash flows used in financing activities | ||||||
Decrease in finance leases | (91) | (160) | - | - | ||
Dividends paid | (1,847) | (1,860) | (1,847) | (1,860) | ||
Acquisition of non-controlling interests | - | (60) | - | - | ||
Repurchase of own shares | (20,000) | - | (20,000) | - | ||
Net cash (used in) financing activities | (21,938) | (2,080) | (21,847) | (1,860) | ||
Net (decrease) in cash and cash | ||||||
equivalents | (14,470) | (5,137) | (15,889) | (11,199) | ||
Cash and cash equivalents at beginning | ||||||
of year | 38,324 | 43,461 | 30,863 | 42,062 | ||
Cash and cash equivalents at | ||||||
end of year | 23,854 | 38,324 | 14,974 | 30,863 | ||
1. Financial income and expenses
2012 | 2011 | |
€'000 | €'000 | |
Interest (income) on cash deposits | (501) | (967) |
Interest expense | ||
Interest expense on interest bearing borrowings | - | 11 |
Finance lease interest | 12 | 13 |
12 | 24 | |
Other finance expense | ||
Change in fair value of financial liabilities | 750 | - |
762 | 24 |
2. Income tax expense
| 2012 | 2011 |
€'000 | €'000 | |
Recognised in the income statement: | ||
Current tax expense | ||
Current year | 1,377 | 1,185 |
Adjustments in relation to prior years | 40 | (45) |
1,417 | 1,140 | |
Current tax expense | ||
Deferred tax | ||
Origination and reversal of temporary differences (note 13) | (53) | (167) |
Total tax in the income statement | 1,364 | 973 |
Reconciliation of effective tax rate | ||
€'000 | €'000 | |
Profit before tax | 9,754 | 8,132 |
Tax based on Irish corporation tax rate of 12.5% | 1,219 | 1,017 |
Non-deductible items | 158 | 31 |
Income taxed at higher rate | 94 | 183 |
Loss relief | (94) | (183) |
Foreign income taxed at higher rate | 14 | (5) |
Effect of change in tax rate | 10 | - |
(Over) / under provision in prior year | 40 | (45) |
Recognition of deferred tax on assets held in prior year | (77) | (25) |
|
| |
Total tax in income statement | 1,364 | 973 |
3. Dividends to equity shareholders
Interim dividends to equity shareholders in Cpl Resources Plc are recognised when the interim dividend is paid by the Company. The final dividend in respect of each financial year is recognised when the dividend has been approved by the Company's shareholders. During the financial year, the following dividends were recognised:
2012 | 2011 | |
€'000 | €'000 | |
Final dividend paid in respect of previous financial year | ||
of 2.5 cent (2011: 2.5 cent) per ordinary share | 930 | 930 |
Interim dividend paid in respect of current financial year | ||
of 3.0 cent (2011: 2.5 cent) per ordinary share | 917 | 930 |
1,847 | 1,860 |
The directors have proposed a final dividend in respect of the 2012 financial year of 3.5 cent per ordinary share. This dividend has not been provided for in the Company or Group balance sheet as there was no present obligation to pay the dividend at the year end. The final dividend is subject to approval by the Company's shareholders at the Annual General Meeting.
4. Earnings per share
2012 | 2011 | |
€'000 | €'000 | |
Numerator for basic and diluted earnings per share: | ||
Profit for the financial year attributable to equity | ||
shareholders | 8,390 | 7,159 |
Denominator for basic earnings per share: | ||
Weighted average number of shares in issue | ||
for the year | 32,767,381 | 37,211,825 |
Effect of dilutive potential ordinary shares | - | - |
|
| |
Denominator for diluted earnings per share: | 32,767,381 | 37,211,825 |
Basic earnings per share | 25.6 cent | 19.2 cent |
Diluted earnings per share | 25.6 cent | 19.2 cent |
5. Trade and other receivables
Group | Company | |||
2012 | 2011 | 2012 | 2011 | |
€'000 | €'000 | €'000 | €'000 | |
Trade receivables | 35,489 | 29,577 | - | - |
Accrued income | 14,605 | 9,850 | - | - |
Prepayments and other debtors | 1,918 | 1,679 | 896 | 795 |
Amounts due from subsidiary | ||||
undertakings | - | - | 45,680 | 38,000 |
VAT recoverable | - | - | 100 | 61 |
52,012 | 41,106 | 46,676 | 38,856 | |
Amounts due from subsidiary undertakings are repayable on demand.
6. Net funds
Group | Company | |||
2012 | 2011 | 2012 | 2011 | |
€'000 | €'000 | €'000 | €'000 | |
Cash and cash equivalents | 23,871 | 38,372 | 14,974 | 30,863 |
Bank overdraft | (17) | (48) | - | - |
|
|
|
| |
Cash and cash equivalents in | ||||
the cash flow statement | 23,854 | 38,324 | 14,974 | 30,863 |
Short term bank deposits | 4,176 | 8,000 | 4,176 | 8,000 |
Net funds | 28,030 | 46,324 | 19,150 | 38,863 |
7. Share capital, share premium, and other reserves
2012 | 2011 | |
€'000 | €'000 | |
Authorised | ||
50,000,000 ordinary shares at €0.10 each | 5,000 | 5,000 |
€'000 | €'000 | |
Allotted, called up and fully paid | ||
30,545,159 (2011: 37,211,825) ordinary shares at € 0.10 each | 3,053 | 3,720 |
During the year, no shares (2011: nil) were issued but 6,666,666 were repurchased and cancelled in November 2011.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Share premium at 30 June 2012 amounted to €1,705,000 (2011: €1,705,000).
Other reserves comprise a capital redemption reserve fund of €666,666 (2011: €nil) a capital conversion reserve of €57,000 (2011: €57,000), a merger reserve of €3,357,000 negative (2011: €3,357,000 negative) and a currency translation reserve of €77,000 (2011: €28,000). The merger reserve arose in 1998 when the Company acquired by way of a share for share exchange the share capital of two group companies formerly under common ownership, management, and control. As permitted by Irish GAAP and Company Law, the distributable reserves of those companies were deemed to be distributable by the Company. The translation reserve comprises all foreign exchange differences from 1 July 2011 arising from the translation of the net assets of the Group's non-euro denominated operations including the translation of the profits of such operations from the average exchange rate for the year to the exchange rate at the balance sheet date.
8. Trade and other payables
Amounts falling due in less than one year:
Group | Company | |||
2012 | 2011 | 2012 | 2011 | |
€'000 | €'000 | €'000 | €'000 | |
Trade creditors | 1,877 | 1,035 | 309 | 304 |
Accruals and deferred income | 25,590 | 23,468 | 1,156 | 912 |
VAT | 4,675 | 3,129 | - | - |
PAYE/PRSI | 5,039 | 3,603 | - | - |
Amounts due to subsidiary undertakings | - | - | 67,159 | 58,945 |
Other creditors | - | - | - | - |
37,181 | 31,235 | 68,624 | 60,161 | |
Amounts due to subsidiary undertakings are repayable on demand.
9. Basis of preparation
The financial information included in this preliminary result statement has been extracted from the Group's financial statements for the year ended 30 June 2012 and is prepared based on the accounting policies set out therein. As permitted by EU law and in accordance with AIM / ESM rules, the Group financial statements have been prepared in accordance with International Financial Reporting Standards and their interpretations issued by the International Accounting Standards Board as adopted by the EU. The Group Financial Statements have been approved by the directors on 5 September 2012 and will be filed with the Irish Registrar of Companies and circulated to shareholders in due course.
END