1 Dec 2016 07:00
For release at 07:00am on 1 December 2016
Nakama Group plc (AIM: NAK)
("Nakama" or "the Group")
"The AIM quoted recruitment consultancy working across UK, Europe, Asia and Australia providing staff for the Web, Interactive, Digital media, IT and Business Change sectors
announces its interim results for the six months ended 30 September 2016"
INTERIM RESULTS
Highlights
· Loss before tax £63,000 (2015: profit £169,000).
· Net fee income (NFI) of £2.9 million (2015: £3.0 million).
· Contractor revenue increased by 4.3 per cent to £9.3 million (2015: £8.9 million).
· Revenue across the APAC region increased by 14.7 per cent.
Rob Sheffield, CEO of Nakama, commented:
"The results are in line with our expectations for the first six months after a period of change and development."
"We see a stronger second half of the year from the Group as a whole this year compared to a softer second half last year. The outcome for the period reflects the Group's commitment to strengthen existing business lines whilst supporting new ones."
"We continue to recruit new heads into those markets where there is potential for NFI and profit growth. The Group strategy for growth in all regions is a key focus aligning all offices and enabling the business to grow globally."
Enquiries:
Nakama Group plc Rob Sheffield, CEO Angus Watson, CFO | www.nakamaglobal.com Tel: 0061 498 127 326 Tel: 01883 341 144 |
WH Ireland Limited Paul Shackleton (NOMAD) David Kilbourn (Broking) |
Tel: 0207 220 1666 |
Peckwater PR Tarquin Edwards | Tel: 07879 458 364 tarquin.edwards@peckwaterpr.co.uk |
NOTES TO EDITORS
About Nakama Group plc
Nakama Group plc is a recruitment group of two branded solutions placing people into specialist and management positions;
· Nakama operates in the digital, creative, media, marketing and technology sectors all over the world from offices in the UK, Asia and Australia and North America.
· The Highams brand specialises in the Financial Services sector, specifically Business Change and IT in Insurance and Wealth Management currently in the UK and Europe.
Nakama Group plc was created in October 2011 through the acquisition of Nakama Ltd UK and its subsidiaries in Hong Kong, Sydney and Melbourne by AIM listed Highams Systems Services Group plc.
Since forming in 2011, the Group has opened offices in Singapore and New York for Digital, Creative, Media and Marketing.
Our aim is to offer all our services from both our brands in all our locations.
CHIEF EXECUTIVE OFFICER'S STATEMENT
I present the unaudited results of Nakama Group plc for the first six months of the financial year. The first half year showed a small increase in revenue across the Group, but a loss before tax of £63,000 (2015: profit £169,000), reflecting the investments made both in the UK, the USA and to Group infrastructure in the latter part of the last financial year.
Financial results
The Group revenue of £10.9 million (2015: £10.6 million) shows a small increase of 2 per cent for the period.
Segmental analysis shows that we have increased our revenue in the APAC region by £552,000 (14.7 per cent). UK revenues decreased slightly due to softer trading conditions.
Net Fee Income ("NFI") in the period for the Group was £2.9m (2015: £3.0m), which was a decrease of 4 per cent on last year. The first half of the financial year showed strong NFI performances in our Hong Kong and Sydney business units.
Administrative costs for the Group increased from £2.8m last year to £2.9m in the first half of this financial year driven by investment in infrastructure and systems.
Our markets
Market conditions in the period became softer for our UK businesses, which has since been addressed by a refocusing on service lines within both UK entities and a strengthening of the management teams in both businesses. Elsewhere, our businesses in Hong Kong and Australia performed strongly. We have seen a softer market in Singapore and South East Asia within our core markets and the business has moved to address this.
We are in line with our internal budgets for the first six months after a period of change and development. We have reasonable expectations that the UK businesses will perform better in the second half of the year after a strengthening of the management teams. In APAC, we expect a similar performance to the first six months from our businesses in Hong Kong and Sydney and an improved performance from our Singapore business in the second half, with increased opportunities for growth in the medium and long term.
The current focus for the Group is to maximize the returns from our investment in all our businesses following on from the strategic review last September and to increase the productivity of the business.
We see a stronger second half of the year from the Group as a whole compared to a softer second half last year. The outcome for the period reflects the Group's commitment to extend its international footprint and to strengthen existing business lines whilst supporting new ones.
Outlook
We continue to recruit new heads into those markets where there is potential for NFI and profit growth.
The Group strategy for growth in all regions is a key focus aligning all offices and enabling the business to grow globally.
Rob Sheffield
Chief Executive Officer
1 December 2016
Consolidated statement of comprehensive income | ||||
for the six months to 30 September 2016 | 6 Months to | 6 Months to | 12 Months to | |
30 Sep 2016 | 30 Sep 2015 | 31/3/2016 | ||
Unaudited | Unaudited | Audited | ||
Note | £'000 | £'000 | £'000 | |
Total Revenue | 3 | 10,864 | 10,649 | 21,043 |
Cost of sales | (7,968) | (7,636) | (15,304) | |
Net Fee Income | 2,896 | 3,013 | 5,739 | |
Administrative costs | (2,930) | (2,827) | (5,702) | |
Operating profit /(loss) | (34) | 186 | 37 | |
Finance costs | (29) | (17) | (37) | |
(Loss)/profit on ordinary activities before taxation | 3 | (63) | 169 | 0 |
Tax expense/credit | 0 | (0) | (70) | |
(Loss)/profit for the period attributable to equity shareholders | (63) | 169 | (70) | |
Basic (loss)/profit per share | (0.05) | (0.14)p | (0.13)p | |
Diluted (loss)/profit per share | (0.05) | (0.13)p | (0.06)p | |
Consolidated statement of recognised income and | ||||
expense | 6 Months to | 6 Months to | 12 Months to | |
for the 6 months ended 31 September 2016 | 30 Sep 2015 | 30 Sep 2015 | 30 Mar 2016 | |
£'000 | £'000 | £'000 | ||
(Loss)/Profit for the period | (63) | 169 | (70) | |
Exchange gains/(losses) arising on translation of foreign operations | (87) | 10 | (9) | |
Total recognised income and expense for the period attributable to equity shareholders | (151) | 179 | (79) |
Statement of changes in equity
At 30 September 2016
Share capital | Share premium | Merger reserve | Employee share benefit reserve | Currency Reserve | Retained earnings | Total equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 April 2015 | 1,602 | 2,580 | 90 | (61) | 65 | (2,401) | 1,875 |
Comprehensive income for the year | |||||||
Income for the Year | - | - | - | - | - | (70) | (70) |
Other Comprehensive Income | - | - | - | - | (9) | - | (9) |
Total Comprehensive profit for the year | - | - | - | 56 | 244 | 216 | |
Share based payment credit | - | - | - | - | - | 7 | 7 |
At 1 April 2016 | 1,602 | 2,580 | 90 | (61) | 56 | (2,471) | 1,796 |
Income for the year | - | - | - | - | - | (63) | (63) |
Other comprehensive income | - | - | - | - | (87) | - | (97) |
Total Comprehensive income for the year | 1,602 | 2,580 | 90 | (61) | (87) | (63) | (160) |
Share based payment credit | - | - | - | - | - | - | - |
At 30 September 2016 | 1,602 | 2,580 | 90 | (61) | (31) | (2,534) | 1,646 |
Consolidated statement of financial position as at 30 September 2016 | 6 months to | 6 months to | 12 months to |
30 Sep 2016 | 30 Sep 2015 | 31 March 2016 | |
Unaudited | Unaudited | Audited | |
£'000 | £'000 | £'000 | |
Assets | |||
Non-current Assets | |||
Intangible assets | 114 | 274 | 193 |
Property, plant and equipment | 100 | 70 | 106 |
Investments | 0 | 0 | 0 |
Goodwill | 487 | 487 | 487 |
Deferred Tax asset | 108 | 178 | 108 |
Total | 809 | 1,009 | 894 |
Current assets | |||
Trade and other receivables | 3,917 | 4,281 | 3,415 |
Cash and cash equivalents | 383 | 498 | 582 |
Total | 4,300 | 4,779 | 3,997 |
Total assets | 5,109 | 5,788 | 4,891 |
Liabilities | |||
Current Liabilities | |||
Trade and other payables | (2,170) | (2,137) | (1,848) |
Borrowings | (1,293) | (1,597) | (1,247) |
Total | (3,463) | (3,734) | (3,095) |
Net assets/(liabilities) | 1,646 | 2,054 | 1,796 |
Equity | |||
Ordinary shares | 1,602 | 1,602 | 1,602 |
Share premium | 2,580 | 2,580 | 2,580 |
Merger reserve | 90 | 90 | 90 |
Employee share benefit trust reserve | (61) | (61) | (61) |
Currency reserve | (31) | 75 | 56 |
Retained earnings | (2,534) | (2,232) | (2,471) |
Total equity | 1,646 | 2,054 | 1,796 |
Consolidated statement of cash flows | |||||||||
to 30 September 2016 | 6 months to | 6 Months to | 12 months to | ||||||
31 Sep 2016 | 30 Sep 2015 | 31 March 2016 | |||||||
Unaudited | Unaudited | Audited | |||||||
£'000 | £'000 | £'000 | |||||||
Cash flows from operating activities | |||||||||
Profit before taxation | (63) | 169 | 0 | ||||||
Depreciation of property, plant and equipment | 16 | 27 | 51 | ||||||
Amortisation of intangible assets | 79 | 88 | 169 | ||||||
Net finance costs | 29 | 17 | 37 | ||||||
Tax paid | -- | - | - | ||||||
Changes in trade and other receivables | (503) | (767) | 71 | ||||||
Change in trade and other payables | 322 | 37 | 111 | ||||||
Net cash generated in operating activities | (120) | (429) | 439 | ||||||
Cash flows from investing activities | |||||||||
Acquisition of subsidiary cash | - | - | - | ||||||
Purchase of property plant and equipment | (9) | (30) | (91) | ||||||
Purchase of intangible assets | - | - | - | ||||||
Proceeds from the sale of assets | - | - | - | ||||||
Net cash generated in investing activities | (9) | (30) | (91) | ||||||
Financing activities | |||||||||
increase/(decrease) in borrowings | 46 | 526 | 176 | ||||||
Finance cost paid | (29) | (17) | (37) | ||||||
Net cash from financing activities | 17 | 509 | 139 | ||||||
Net changes in cash and cash equivalents | (112) | 51 | 487 | ||||||
Cash and cash equivalents, beginning of year | 582 | 95 | 95 | ||||||
Exchange losses on cash and cash equivalent | (87) | 8 | - | ||||||
Cash and cash equivalents at end of period | 383 | 154 | 582 | ||||||
Cash and cash equivalents for the purposes of the Statement of cash flows comprise: | |||||||||
Cash and cash equivalents | 383 | 498 | 582 | ||||||
Bank overdrafts | 0 | (344) | 0 | ||||||
383 | 154 | 582 | |||||||
Notes to the Interim Report
1. Basis of Preparation
This unaudited consolidated interim financial information has been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements ("FRS100") and Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101"). The Group adopted IFRS 101 in the financial year to March 2016 having previously applied UK accounting standards. Other than the adoption of reduced disclosures there was no material effect of applying IFRS 101 for the first time. September 2016 is unreviewed and unaudited and does not constitute the Group's statutory financial statements for those periods. The comparative financial information for the full year ended 31 March 2016 has, however, been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-498(3) of the Companies Act 2006.
The financial information in the Interim Report is presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.
2. Earnings per share
6 months to 30 Sep 2016 Unaudited | 6 months to 30 Sep 2015 Unaudited | 12 Months to 31 March 2016 Audited | |||||||
Weighted | Weighted | Weighted | |||||||
average | average | average | |||||||
number of | Loss | number of | Profit | number of | Loss | ||||
Loss | shares | per share | Profit | shares | per share | Loss | shares | per share | |
£'000 | '000 | p | £'000 | '000 | p | £'000 | '000 | p | |
Basic earnings per share | (63) | 117,791 | (0.05) | 169 | 117,791 | 0.14 | (70) | 117,791 | (0.13) |
Diluted earnings per share | (63) | 126,469 | (0.05) | 169 | 126,469 | 0.13 | (70) | 126,571 | (0.06) |
3. Segmental Analysis
The Group has three main reportable segments based on the location revenue is derived from: | ||||||||
Asia Pacific - This segment includes Australia, Hong Kong and Singapore. | ||||||||
UK -The UK Segment includes candidates placed in the UK and Europe. USA -This consist of the New York operation opened late last year. | ||||||||
These segments are monitored by the board of directors. | ||||||||
Factors that management used to identify the Group's reportable segments | ||||||||
The Group's reportable segments are strategic business units that although supplying the same product offerings, operate in distinct markets and are therefore managed on a day to day basis by separate teams. | ||||||||
Measurement of operating segment profit or loss, assets and liabilities | ||||||||
The Group evaluates performance on the basis of profit or loss from operations before tax not including overhead costs incurred by the head office such as plc AIM related costs not recharged, exceptional items, amortisation and share based payments. | ||||||||
The Board does not review assets and liabilities by segment.
Asia Pacific | UK | USA | Total | |
30 Sep 16 | 30 Sep 16 | 30 Sep 16 | 30 Sep16 | |
£'000 | £'000 | £'000 | £'000 | |
Revenue from external customers | 4,297 | 6,533 | 34 | 10,864 |
Segment profit before tax | 139 | (12) | (54) | 73 |
Asia Pacific | UK | USA | Total | |
30 Sept 15 | 30 Sept 15 | 30 Sept 15 | 30 Sept 15 | |
£'000 | £'000 | £'000 | £'000 | |
Revenue from external customers | 3,745 | 6,904 | 0 | 10,649 |
Segment profit before tax | 241 | 84 | 0 | 325 |
Reconciliation of reportable segment profit to the Group's corresponding amounts: | |||||
| |||||
30 Sept 16 | 30 Sept 15 | ||||
Profit or loss after income tax expense | £'000 | £'000 | |||
Total profit or loss for reportable segments | 73 | 325 | |||
PLC costs not cross charged (restated) | (30) | (68) | |||
Amortisation of intangibles | (106) | (88) | |||
Share based payments | - | - | |||
Profit before income tax expense | (63) | 169 | |||
Corporation taxes | - | - | |||
Profit after income tax expense | (63) | 169 | |||