CPS.L Regulatory News (CPS)

5th September 2013

Cpl Resources Plc

Results for the Full Year Ended 30 June 2013

Dublin, 5 September 2013: Cpl Resources Plc ('Cpl', the 'Group' or the 'Company'), Ireland's leading employment services group, today announced results for the year ended 30 June 2013.

Full Year Highlights:

- Revenue increase to €330.8 million, up 14% on last year

- 17% increase in Operating Profit to €11.7 million

- Profit Before Tax up 26% to €12.3 million

- Earnings per share increased to 35.0 cent from 25.6 cent

- Total dividend per share of 8.5 cent (2012: 6.5 cent)

John Hennessy, Chairman commented:

"I am pleased to report that the year ended 30 June 2013 has been one of further profitable growth for Cpl. Profit before tax increased by 26% to €12.3 million, on revenues that are 14% higher than last year. This performance reflects increasing demand for our services and the continued hard work, dedication, talent and efficiency of our team. Our results for the year reflect growth across all our major business areas and locations, and this has been achieved in challenging and highly competitive markets and in the face of continuing economic uncertainty.

There are some signs of economic recovery in certain markets in which we operate. It is too early to predict whether these signs indicate a sustained recovery. However, we do expect to achieve further profitable growth in the months ahead."

Anne Heraty CEO added:

 "Cpl made solid progress in the year to June 2013. We finished the year with 8,223 people working on behalf of Cpl on client projects. Demand for our services particularly in Technology, Healthcare and Finance continued to improve during the year. We increased our permanent placement business by 16%. In addition, we expanded our international footprint and established a successful new training businesss, Cpl Learning and Development"

For Further Information:

Anne Heraty, CEO, CPL Resources Plc: +353 1 614 6000

Mark Buckley, CFO, CPL Resources Plc: +353 1 614 6000

Ivan Murphy/ Daragh O'Reilly, Davy Corporate Finance: +353 1 679 6363

Cpl Resources Plc

Chairman's statement

I am pleased to report that the year ended 30 June 2013 has been one of further profitable growth for Cpl.

Highlights of the Group's performance include:

· Record Revenues of €330.8 million up 14% on prior year

· 17% increase in operating profit to €11.7 million

· Earnings per share of 35.0 cent (2012: 25.6 cent)

· Total dividend per share of 8.5 cent (2012: 6.5 cent)

Full Year Highlights

The Group's results for the year to 30 June 2013 reflect growth across all our major business areas and locations. This has been achieved in challenging and highly competitive markets and in the face of continuing economic uncertainty in these markets.

Despite this uncertainty, gaps remain between the supply of skills and the emerging demand for people in several sectors in which we operate. We continue to work with our clients and candidates to fill these gaps and to provide appropriate solutions where skills are in short supply.

During the year we experienced growth in demand for both flexible, temporary solutions and for permanent appointments. Fees from permanent placements grew by 16.3% year-on-year. Despite continuing downward pressure on margins, gross profits from temporary placements grew by 10.6% over the prior year.

We continue to manage our costs closely, and this is reflected in an improved operating profit ratio of 24% (23% in the prior year).

Cpl continues to have a strong balance sheet, with net assets in excess of €63 million at 30 June 2013 and net free funds at that date of €28 million.

People

The Group's strong performance in difficult trading conditions in the year ended 30 June 2013 reflects the continued commitment, talent and dedication of our people. We continue to recruit new talent into the Group and to invest in training and developing our people so that they can meet the changing needs of our clients.

Cpl has a strong culture, supported by clear and practical core principles that are espoused by our people. We aim to deliver to all our clients and candidates a special and personal experience that is consistently excellent across all our locations and business sectors. I am grateful to all the staff of Cpl for the outstanding service they provide through their dedication, their creativity and their adherence to our culture and core principles.

Earnings per Share, Dividend & Dividend Policy

The Group has delivered a 37% increase in earnings per share in the twelve months to June 2013, to 35.0 cent.

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 4.5 cent per share. This will bring the total dividend for the year to 8.5 cent per share. The dividend, if approved by the shareholders, will be payable on 4th November 2013 to shareholders on the Company's register at the close of business on the record date of 11th October 2013.

Outlook

Forecasting remains a challenge in the current economic environment. There are some signs of economic recovery in certain of the markets in which we operate, giving rise to small increases in demand for skills in certain sectors and locations. It is too early to predict whether these signs indicate a sustained recovery. However, on an overall basis we do expect to achieve further profitable growth in the months ahead.

John Hennessy

Chairman

5 September 2013

Cpl Resources Plc

Chief Executive's review

The year to June 2013 was one of solid progress for Cpl. Performance across the Group was strong resulting in a €40.5 million increase in Revenue to €330.8 million, up 14% and a €2.5 million increase in profit before tax to €12.3 million, up 26%. We have strengthened our position within our established sectors and markets. At the same time we have expanded our international footprint and established a successful new business called Cpl Learning and Development.

Our revenues are focused on some of the areas in greatest demand in the economy today. Sectors and occupations such as ICT, Healthcare and Engineering are experiencing serious skills shortages across Europe. Labour market forecasts suggest a Europe wide shortfall of 700,000 ICT professionals by 2015 and a shortfall of 500,000 Engineers by 2020. Qualified immigration to the EU is being called for as part of the solution. The demand for healthcare professionals has also been constantly increasing. By 2020, almost 1.6 million healthcare professionals will be required, mostly to replace existing people who leave or retire from the workforce. (Source: Cedefop 2012)

Cpl's largest recruitment divisions are ICT, Engineering and Healthcare. We are working with clients to bridge the gap by sourcing people with specialist skills all over the world. In addition, the need for investment in education and training/re-skilling is clear so that the skills of people will better match the jobs that are available. Cpl Learning and Development offers opportunities for people to train and re-skill to where skills are most in demand.

Indicators for the Irish labour market have recently shown some improvement. Annual employment growth is now at its highest level since Q4 2007 and unemployment is down to 13.7%. We are seeing the emergence of a two speed labour market in Ireland with 'white collar' and services occupations having an unemployment rate of 6% or less while the highest unemployment rates are among people previously employed in construction and people with low education attainment. These are also the areas where people are more at risk of long term unemployment i.e. out of work for over 12 months. In June 2013, 45% of those unemployed had been on the Live Register for longer than one year. This proportion is up from 44% in June 2012 and 41% in June 2011. The government's focus and many of the initiatives in the Action Plan for jobs is on the long term unemployed. Cpl Learning and Development were delighted to work with the Momentum Project under the Department of Education and Skills which aimed to up-skill 6,500 job seekers to re-enter the workforce. 620 people were in training at the year end with Cpl and work placements are already identified for over 80% of these people, mainly in the healthcare and food industries. Our experience in Cpl tells us that it is critically important that those who are unemployed are kept close to the labour market and constantly updated on where opportunities exist and how to re-skill for these opportunities. Our combination of accredited training and access to a wide range of employers, positions Cpl Learning and Development to best help unemployed individuals identify and build the skills to access the opportunities that are available.

We finished the year with 8,223 people working on behalf of Cpl on client projects, an increase of 5% 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.

Financial Highlights

The Group increased its revenue by 14% to €330.8 million in the year to June 2013 (2012: €290.2 million). Gross profit increased by 12% to €48.8 million (2012: €43.5 million). The Group's gross margin was 14.8% (2012: 15.0%). Our Operating Profit increased by 17.0% to €11.7 million (2012: €10.0 million). Profit before tax was up 26% at €12.3 million (2012: €9.8 million). Our earnings per share was 35.0 cent (2012: 25.6 cent) an increase of 37% which includes the impact of the share buyback in the prior year.

Our operating expenses were €37.1 million, 10.7% higher than last year. The majority of our cost base circa 71% is staff costs. At year end we had increased our internal staff numbers by 64 from the previous year. We have invested in building both our recruitment teams and support teams to take advantage of any upturn in the market. The other main components of our cost base are property and information technology costs. We continued to invest in our technology infrastructure, upgrading our financial systems and our internet presence. Continued investment in our technology infrastructure is essential in order to increase our operational efficiency and provide excellent service to our clients.

At 30 June 2013 our net cash balance was €28 million, broadly unchanged on the previous year. During this period, we paid our shareholders an interim dividend of 4.0 cent per share. The Board is recommending a final dividend of 4.5 cent per share for the year to June 2013. The total dividend per share for the year is 8.5 cent.

Our revenues grew by €40.5 million, resulting in an increased investment in working capital. Trade and other receivables grew to €61.9 million in June 2013 from €52.0 million in June 2012. We continue to actively manage our debtors and have not experienced any increase in the level of bad debts during the year.

Our gross margin decreased slightly by 0.2% to 14.8% in the year to June 2013. We are still experiencing margin pressure in our temporary business although pricing has improved in our permanent placement business. The permanent revenue increased by 16.3% to €15.8 million. Gross profit from permanent placement accounts for 32.1% of the total gross profit.

Our conversion rate of gross profit to Operating Profit is one of our key performance metrics in the Group. We improved our conversion rate to 24.0% from 23.0% in 2012.

Operational Review

Cpl provide recruitment, workforce solutions and people based services in each of the markets in which we operate. We continue to build on our deeply rooted long term customer relationships and our ability to attract and retain the best people for our business. Cpl offers a diverse range of services to over 1,500 clients each year. These services broadly comprise of temporary staffing, permanent recruitment, managed services and outsourcing. The majority of our gross profit (67.9%) is derived from temporary staffing/managed services. Permanent placement accounts for 32.1%. Our recruitment business further breaks down into professional/specialist recruitment and generalist recruitment.

Our professional/specialist recruitment is a significant part of the Cpl Business and operates under a number of different services and business lines. These are broadly Information Technology (IT), Finance and Accounting, Engineering & Science, Sales & Marketing, Contact Centre, Human Resources (HR) and Healthcare. These business lines have the potential for better margins particularly in sectors where there are skills shortages. Recent data indicates that unemployment among 'white collar workers' is 6% and we believe it is less than this in some of our key sectors e.g. ICT and healthcare. Our generalist business is a lower margin business and cost is often a major factor in successful tenders.

Our managed services and outsourcing business is the platform for delivering a wide range of services that help client's source staff and manage their workforce in an efficient and flexible manner. Some of the services provided by these divisions are Recruitment Process Outsourcing (RPO), Managed Staffing, Contact Centre Outsourcing, Business Process Outsourcing, Career Transition and Training. This platform will be a key driver of growth for Cpl as clients look for greater efficiencies and cost savings combined with flexibility.

Permanent Placement

There was a welcome improvement in the Irish labour market in the past year, with a decline in the unemployment rate and an increase in the number of people employed. Foreign direct investment into Ireland remained strong with some notable gains in technology, pharma and financial services sectors. These are all areas in which Cpl has a strong presence. We also noted some increase in demand in the second half of the year from indigenous companies.

In the year to June 2013 permanent fees increased by 16.3% to €15.8 million (2012: €13.6 million). Permanent fees generated in offices outside Ireland grew by 31%. We experienced growth across our entire business, with international healthcare, financial and ICT showing particular strength.

Temporary Staffing

We continue to see strong demand from our clients for flexible workforce solutions such as temporary staffing and outsourcing. Revenues generated from temporary assignments in the year to June 2013 were €315.0 million (2012: €276.7 million) representing 13.8% growth. We generated €33.2 million gross profit, 10.6% higher than the year to June 2012. Against this backdrop we are very pleased to have increased the number of people working on client sites by 5% over the course of the year.

Overseas business

We had a successful year in our international divisions in the year to June 2013. We continue to expand our client base and service offerings. We now have 32 offices in 9 countries. During the year we expanded into Tunisia and opened an office in Canada. We have now firmly established Cpl as a provider of managed service solutions outside Ireland. We have increased our net fee income from

outside Ireland by 35%. 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.

Disposal

We disposed of the Swedish business European Human Resources AB, ("ERHAB"). As the bulk of the consideration for the 2012 transaction was to be payable through an earn-out, there is no material financial impact on the Group.

Strategy

Cpl is a robust and well developed business with a solid earnings history and good earnings potential. The Group has many strengths including our reputation, our client base and the quality of our candidate and client relationships. The management team are committed to building on these strengths and driving the business forward to deliver our long term strategy. This includes building a profitable, cash generative business with good predictability in earnings, improving our infrastructure and building a balanced portfolio of service lines and customers.

In the year to June 2013 we invested in our online capability and presence. We made it easier and faster for candidates and clients to access us online. Our website www.cpl.ie is the only recruitment agency in the top 10 Irish job boards. We also launched the first mobile job app in Ireland. Our clients have benefited from these initiatives because we are able to present candidates with the right skills to them more quickly. This is crucial in a skills scarce market.

People

I would like to thank all our employees for delivering for our candidates and clients. Their talent, skills and ability are fundamental to our ability to deliver value to our clients. I would also like to extend my appreciation to our customers for their continued loyalty and support.

Outlook

Cpl made solid progress on many fronts last year. We grew our revenues, broadened our services offerings and client base and expanded geographically. We have demonstrated resilience in difficult market conditions over the last 5 years and we intend to move forward from a position of strength. The nature of our business, particularly permanent placement, is such that we have limited visibility on demand for our services. However, our goals are clear: continue to deepen our customer relationships, expand our service lines and drive profitable growth. Our strategic advantages are our client base and the quality of our client and candidate relationships.

Anne Heraty

Chief Executive

5 September, 2013

Cpl Resources Plc

Company Statement of Changes in Equity

for the year ended 30 June 2013

Cpl Resources Plc

Group and Company Balance Sheets

as at 30 June 2013

Cpl Resources Plc

Group and Company Balance Sheets (continued)

as at 30 June 2013

Cpl Resources Plc

Notes

1 Financial income and expenses

2 Income tax expense

2 Income tax expense (continued)

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:

The directors have proposed a final dividend in respect of the 2013 financial year of 4.5 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

5 Trade and other receivables

Amounts due from subsidiary undertakings are repayable on demand.

6 Net funds

7 Share capital, share premium, and other reserves

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 2013 amounted to €1,705,000 (2012: €1,705,000).

Other reserves comprise a capital redemption reserve fund of €666,666 (2012: €666,666), a capital conversion reserve of €57,000 (2012: €57,000), a merger reserve of €3,357,000 negative (2012: €3,357,000 negative) and a currency translation reserve of €10,000 (2012: €77,000). 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 2012 arising from the translation of the net assets of the Group's non-euro denominated operations including the translation of the results 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:

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 2013 and is prepared based on 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 4 September 2013 and will be filed with the Irish Registrar of Companies and circulated to shareholders in due course.

END