NAK.L Regulatory News (NAK)

7 Nov 2008 07:00

7 November 2008

Highams Systems Services Group plc (HSS/L)

("Highams" or "the Group")

The AIM-quoted IT recruitment consultancy and a leading niche provider of technology talent to the financial services industry announces its interim results 

for the six months ended 30 September 2008

INTERIM RESULTS

For the six months ended 30 September 2008

Highlights

Revenue of £5.66m (2007: £7.06m) 

Gross margin improved by 22% from 14.5% to 17.7%

Losses before tax continued to narrow to £260,000 (2007: loss £495,000) partly reflecting some of the changes announced in the Group's year end results. 

New Chairman Ken Ford in situ with effect from 24 October 2008

New Managing Director and new Chief Operating Officer both promoted from within the Group. 

Renewed sales drive targeting chosen niche markets, along with rigorous cost cutting initiatives, to deliver better quality earnings

Balance sheet stabilised in October following successful placing of new shares to raise £650,000 (before associated costs).

Ken Ford, Chairman of Highams, commented:

"As announced at the time of our preliminary results, we have received an investment of £650,000 generated through the placing of new shares. The Board changes that we announced concurrently have had a significant impact on the costs of the business during this financial year and we should begin to see the positive effect of these savings in the second half of this year". 

Enquiries:

CHAIRMAN'S STATEMENT

Interim results for the six months ended 30 September 2008

Introduction

As announced at the time of our preliminary results, we have received an investment of cash generated through the placing of new shares, raising £650,000 (before associated costs). The Board changes along with other cost savings made, have had a significant impact on the business this financial year and we should begin to see the financial benefits of these savings in the second half of this year. These savings, along with the placing of new shares, have resulted in the balance sheet being stabilised from October.

Included in our preliminary results released on 30 September 2008, we also announced a number of Board changes, details of the Placing of 37,142,857 new ordinary shares at 1.75 pence per share and a Capital Reorganisation. A copy of the Circular to shareholders can be found on our website www.highamsrecruitment.com.

Financials

With Group turnover of £5.66 million (2007: £7.06 million), and with gross profit slightly down at £1.004 million (2007: £1.025 million), we did see however a pleasing rise in our gross margin, which improved to 17.73% of turnover (2007: 14.51%). The operating loss before interest and tax narrowed to £227,000 (2007: loss £455,000) and this progress reflects some of the changes we have made, as announced in the Group's year end results. The exceptional item of £37,000 related to the cost of the Board restructuring.

The Company will not be declaring an interim dividend.

Outlook and Summary

During the period, we have executed significant cost reductions across the group and we are starting to see some of the measures we have introduced begin to bear fruit. Post period end, we are mindful that there is still much hard work needed as far as our sales performance is concerned and we fully recognise the need to focus on sales and delivery, whilst continuing to rigorously monitor all costs. 

Whilst the economic climate continues to be unstable, we do remain cautiously confident in our ability to turnaround our business. We continue to focus our efforts on providing a high quality service and look forward to updating our shareholders on continued progress as we go forward. 

Ken Ford

Chairman

7 November 2008

Note: The effect of the placing of new shares on 24 October 2008 is not reflected in the balance sheet at 30 September 2008.  

Notes to the Interim Report

1. Basis of Preparation

This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union collectively EU IFRSs). The principal accounting policies used in preparing the interim results are those it expects to apply in its financial statement for the year ended 31 March 2009 and are unchanged from those disclosed in the group's Annual Report for the year ended 31 March 2008. 

The financial information for the six months ended 30 September 2008 and 30 September 2007 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 2008 has, however, been derived from the audited statutory financial statement 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 237(2)-(3) of the Companies Act 1985. 

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. Loss per share

3. Reconciliation of movements in equity

Note: 

The following changes in share capital took place on 24 October 2008

Each of the issued ordinary shares of 5p each in the capital of the Company were sub-divided and re-designated into one ordinary share of 0.01p each and one deferred share of 4.99p each. 

Each of the authorised but unissued ordinary shares of 5p each in the capital of the Company were sub-divided into 500 New Ordinary Shares.

The company issued 37,142,857 ordinary shares of 0.01p each for cash. The premium arising on each share was 1.74p.

The Deferred Shares do not carry any voting rights and do not entitle the holders to receive any dividend or other distribution.

A copy of this announcement will be available to download from the investor relations section of the Company's website www.highamsrecruitment.com