27 Jan 2011 07:00
Cpl RESOURCES plc
Results for the Half Year Ended 31 December 2010
Cpl Resources plc, Ireland's leading employment services group, today announced results for the half year ended 31st December 2010.
Chairman's Statement
Half Year ended | Half Year ended | |
31-Dec-10 | 31-Dec-09 | |
Operating highlights | €'000 | €'000 |
( Unaudited) | ( Unaudited) | |
Revenue | 111,896 | 91,378 |
Gross profit | 17,116 | 12,958 |
Profit before tax | 3,885 | 2,374 |
Conversion Ratio before Interest | 20% | 13% |
Conversion Ratio after Interest | 23% | 18% |
EPS | 9.1 cent | 5.5 cent |
Permanent fees | 31% | 26% |
Temporary fees | 69% | 74% |
I am pleased to inform our shareholders that tight cost control coupled with strong top line growth has resulted in a significant increase in our profits in the 6 months to 31 December 2010. Our sales increased by 22% year on year and by 14% over the preceding 6 months. Our profit before tax of €3.9 million represents 33% sequential growth when compared to the six months to June 2010. The PBIT achieved in the 6 months ended 31 December 2010 is double the PBIT for the same period last year.
Permanent fees continued to improve in the six months to December 2010. The fees in the six months to December 2010 were 57% higher than the same period last year and 22% higher than the six months to June 2010. While companies are looking to recruit again, their decision making process is much longer than it used to be. Certain specialist areas showed the biggest pick-up in recruiting activity in the 6 months period to December 2010.
Our revenues in H1 2011 from our temporary business were 21% higher than the same period last year and 13% higher than the 6 months to June 2010. The gross profit earned in our temporary business in the period to December 2010 was 23% higher year on year. While our temporary staff numbers and rostered hours are increasing, we are still experiencing significant price pressure with continued margin erosion. However, our temporary fees in the six months to December 2010 were 8% higher than the six months to June 2010. We have grown the fees, despite the pressure on our price, by delivering new services to our clients, by focusing on delivering efficient and innovative solutions and by managing our costs.
The Group had cash balances of €42.4 million at 31 December 2010. The business generated €3.7 million from operating activities in the six months to December 2010. The Group paid dividends of €930,000 while €735,000 was spent on acquisitions in the same period. We continue to manage our debtor book actively and carefully, and we have not experienced any significant increase in bad debts. However given the growth in revenue our working capital needs increased in the first six months.
In November 2010 Cpl Resources plc acquired PHC Care Management Limited, "PHC". PHC provides high quality, person-centred care and support to individuals in their own homes, enabling them to continue to live independently. The acquisition of PHC represents a further step in Cpl's strategy of extending the Group's footprint in the healthcare sector, and will enhance our position as the leading provider of healthcare professionals in the market. We anticipate significant benefits for our patients, their families and the communities within which we operate, from the strong infrastructure and support of the combined companies.
I would like to take this opportunity to thank our clients. It has been a difficult time for businesses in Ireland and we value their continued support and look forward to delivering more services in the coming year. I would also like to thank all our staff for their loyalty, enthusiasm and commitment to our clients and candidates. Finally I would like to thank our candidates for continuing to let us work with them to develop their future.
The marketplace remains uncertain and highly competitive, and we continue to experience pressure on our margins. These challenges are being offset by growth in certain specialist areas. As a consequence, the Group is unlikely to experience significant changes in profitability in the near term.
The Board is recommending an interim dividend of 2.5 cent per share. The dividend will be payable on 4th March 2010 to shareholders on the company's register at the close of business on the record date of 4 th February 2010.
John Hennessy
27th January 2011
Group income statement |
for the period ended 31 December 2010 |
Half Year ended | Half Year ended | Year ended | |
31 Dec 2010 | 31 Dec 2009 | 30 Jun 2010 | |
€'000 | €'000 | €'000 | |
( Unaudited) | ( Unaudited) | (Audited) | |
Revenue | 111,896 | 91,378 | 189,856 |
Cost of sales | (94,780) | (78,420) | (161,640) |
Gross profit | 17,116 | 12,958 | 28,216 |
Distribution expenses | (1,052) | (762) | (1,677) |
Administrative expenses | (12,721) | (10,514) | (22,574) |
Operating profit | 3,343 | 1,682 | 3,965 |
Financial income | 546 | 694 | 1,335 |
Financial expenses | (4) | (2) | (9) |
Profit before tax | 3,885 | 2,374 | 5,291 |
Income tax expense | (505) | (309) | (793) |
Profit for the Financial Year | 3,380 | 2,065 | 4,498 |
Attributable to: | |||
Equity Shareholders | 3,376 | 2,054 | 4,525 |
Non-controlling interest | 4 | 11 | (27) |
3,380 | 2,065 | 4,498 | |
Basic earnings per share | 9.1 cent | 5.5 cent | 12.2 cent |
Diluted earnings per share | 9.1 cent | 5.5 cent | 12.2 cent |
Group Balance Sheet | |||
At 31 December 2010 | |||
31 Dec 2010 | 31 Dec 2009 | 30 Jun 2010 | |
€'000 | €'000 | €'000 | |
( Unaudited) | ( Unaudited) | ( Audited) | |
Assets | |||
Non-current assets | |||
Property, plant and equipment | 1,254 | 1,426 | 1,424 |
Goodwill and Intangible assets | 12,594 | 10,668 | 11,293 |
Deferred tax asset | 325 | 229 | 325 |
Total non-current assets | 14,173 | 12,323 | 13,042 |
Current assets | |||
Trade and other receivables | 40,028 | 29,666 | 33,703 |
Cash and cash equivalents | 42,358 | 16,531 | 43,461 |
Short-term bank deposits | - | 25,535 | - |
Corporation tax refundable | - | 135 | 322 |
Assets classified as held for sale | - | - | 150 |
Total current assets | 82,386 | 71,867 | 77,636 |
Total assets | 96,559 | 84,190 | 90,678 |
Equity | |||
Share capital | 3,720 | 3,720 | 3,720 |
Share premium | 1,705 | 1,705 | 1,705 |
Other reserves | (3,300) | (3,300) | (3,300) |
Retained earnings | 63,315 | 58,956 | 60,869 |
65,440 | 61,081 | 62,994 | |
Non-controlling interest | 75 | 109 | 71 |
Total equity | 65,515 | 61,190 | 63,065 |
Liabilities | |||
Non-current liabilities | |||
Financial liabilities | 100 | 68 | 158 |
Provisions | 529 | - | 700 |
Total non-current liabilities | 629 | 68 | 858 |
Current liabilities | |||
Financial liabilities | 105 | 32 | 126 |
Trade and other payables | 29,302 | 22,870 | 26,620 |
Corporation tax payable | 158 | - | - |
Provisions | 850 | 30 | 9 |
Total current liabilities | 30,415 | 22,932 | 26,755 |
Total liabilities | 31,044 | 23,000 | 27,613 |
Total equity and liabilities | 96,559 | 84,190 | 90,678 |
Group Cash Flow statement | Half Year ended | Half Year ended | Year ended |
for the period ended 31 December 2010 | 31 Dec 2010 | 31 Dec 2009 | 30 Jun 2010 |
€'000 | €'000 | €'000 | |
( Unaudited) | ( Unaudited) | ( Audited) | |
Cash flows from operating activities | |||
Profit for the financial year | 3,380 | 2,066 | 4,498 |
Adjustments for: | |||
Depreciation on property, plant and equipment | 301 | 287 | 463 |
Amortisation of Intangible assets | 35 | 83 | 594 |
Deferred Consideration write back | - | (317) | (317) |
Financial income | (546) | (694) | (1,335) |
Financial expense | 4 | 2 | 9 |
Loss on disposal of property plant and equipment | - | - | 7 |
Income tax expense | 505 | 309 | 793 |
Operating profit before changes in working | |||
capital and provisions | 3,679 | 1,736 | 4,712 |
Decrease/(Increase) in trade and | |||
other receivables | (6,458) | 483 | (1,685) |
(Decrease)/Increase in trade and other payables and provisions | 2,547 | (979) | 924 |
Cash generated from operations | (232) | 1,240 | 3,951 |
Interest paid | (4) | (2) | (9) |
Income tax refund / ( paid) | - | - | (800) |
Interest received | 873 | 495 | 1,078 |
Net cash from operating activities | 637 | 1,733 | 4,220 |
Cash flows from investing activities | |||
Acquisition of business, net of cash acquired | (735) | (1,198) | (1,628) |
Deferred consideration paid | (10) | (127) | (162) |
Purchase of property, plant and equipment | (131) | (199) | (236) |
Sale of property , plant and equipment | 150 | - | - |
Purchase of intangible assets | (5) | (70) | (87) |
Transfer from/(to) short term deposits | - | (5,540) | 19,995 |
Net cash used in investing activities | (731) | (7,134) | 17,882 |
Cash flows from financing activities | |||
Repayment of borrowings | (79) | (15) | - |
Decrease in finance leases | - | - | (30) |
Dividends paid | (930) | (558) | (1,116) |
Net cash used in financing activities | (1,009) | (573) | (1,146) |
Net /( decrease) increase in cash and cash equivalents | (1,103) | (5,974) | 20,956 |
Cash and cash equivalents at beginning of period / year | 43,461 | 22,505 | 22,505 |
Cash and cash equivalents end of period / year | 42,358 | 16,531 | 43,461 |
Notes supporting interim financial statements
1. Basis of preparation
The consolidated financial information of the Group has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS), including interpretations issued by the International Accounting Standards Board ("IASB") and its committees and adopted by the EU.
The figures for the half year ended 31 December 2010 are unaudited. The comparative figures for the half year ended 31 December 2009 are also unaudited. The amounts for the year ended 30 June 2010 represent an abbreviated version of the Group's full financial statements for the year on which the auditors issued an unqualified audit report.
The preparation of financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.
2. Dividends to equity shareholders
Half Year ended | Half Year ended | Year ended | |
31 Dec 2010 | 31 Dec 2009 | 30 June 2010 | |
€'000 | €'000 | €'000 | |
Ordinary dividends: | |||
Interim dividends paid | - | - | 558 |
Final dividend paid | 930 | 558 | 558 |
930 | 558 | 1,116 |
3. Earnings per ordinary share
The earnings per ordinary share is calculated on the basis that the weighted average number of shares in issue for the half year ended 31 December 2010 is 37,211,825 (period ended 31 December 2009 - 37,211,825; year ended 30 June 2010 - 37,211,825). It has been calculated based on the profit for the financial period ended 31 December 2010 of €3,376,000 (period ended 31 December 2009 - €2,054,000; year ended 30 June 2010 - €4,525,000).
4. Acquisition of business undertakings
In November 2010, the Group acquired PHC Care Management Ltd. The carrying value of the assets which were acquired, determined in accordance with IFRS at the acquisition dates was €85,000. Total consideration amounted to €1 million.
The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis in respect of the above business combination. Any amendments to these fair values within the twelve month timeframe from the date of acquisition will be disclosable in the 2011 Annual Report as stipulated by IFRS 3, Business Combinations.
5. Provisions
Deferred and contingent consideration | Group |
€'000 | |
Balance at 30 June 2010 | 709 |
Amount recognised during the year (note 4) | 680 |
Paid during the year | (10) |
Balance at 31 December 2010 | 1,379 |
Current | 850 |
Non-current | 529 |
1,379 |
For Further Information:
Anne Heraty, CEO , CPL Resources, 01 6146000
Josephine Tierney, Finance Director, 01 6146000
Ends