21 Sep 2020 07:00
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR")
21 September 2020
Nakama Group plc
("Nakama" or the "Group")
Update on trading and current financial position
Extension of reporting deadline for publication of audited accounts for year ended 31 March 2020
Nakama (AIM: NAK), the AIM quoted recruitment consultancy working across the UK and Asia providing recruitment and related services for the web, interactive, digital media, IT and business change sectors, today updates shareholders on its current trading and current financial position.
As with most businesses, 2020 has been a challenging and unprecedented period for Nakama. Since March 2020 the focus of the business has been to ensure the health and safety of all its employees and that the Group continues to operate to the best of its abilities for all its clients and stakeholders. The Nakama board would like to thank all the Group's staff for their exceptional commitment and hard work over this period.
Trading update
The impact of the COVID-19 pandemic had an immediate and significant impact on the Group's trading activities since the start of 2020. Revenues in all the Group's businesses have declined on the comparable period for 2019 and this has had a material impact on the Group's cash and financial position. For the year ended 31 March 2020, the Nakama board currently anticipates that the Group will announce revenues of £9.72 million, a 28% decrease on the year ended 31 March 2019 (£13.41 million). During the financial year 2019/20, the Group saw significant management changes resulting in the departure of the managing directors of Nakama London and the Hong Kong and Singapore businesses. Replacements were quickly found for all three positions, resulting in a relatively smooth transition.
Since 31 March 2020, each of the Group's four businesses have continued to face trading challenges but they have continued to operate and take on assignments. The UK businesses of Highams and Nakama have seen business volumes reduce due to the initial, albeit revised, changes to IR35 and then the onset of COVID-19. Both business units continue to operate in difficult market conditions but are well placed to take advantage of any market upturn. The trading environment in both Hong Kong and Singapore has been broadly similar to the UK due to COVID-19. However, with local management in place and a strategy of broadening our international reach, trading has been maintained, albeit at reduced levels.
Nakama continues to focus on digital, technology and transformation recruitment which means we are well positioned with our clients and candidates as these roles are becoming increasingly critical to corporate strategy. The Nakama board remains confident that the business is ready to take advantage of any market improvement in the future.
Financial position
The Group has utilised a number of government initiatives in the UK (including the Coronavirus Jobs Retention Scheme), Hong Kong and Singapore to ensure the Group's businesses preserve their cash and retain their ability to continue to trade. All of the Group's businesses responded quickly and intelligently to remote working and this transition has been relatively seamless and undisruptive. As a consequence, the Group's cash position is currently stable, and the Group is able to meet its obligations as they fall due.
The Group's cash position at 31 March 2020 was £189,887 and £307,639 at 31 August 2020.
The lasting nature of the pandemic and associated business uncertainty will, in the opinion of the Nakama board, continue throughout 2020 and trading activity at all of the Group's businesses will continue to be affected in a negative way. As the various government support schemes are ended the Group will face a number of trading and cashflow challenges and without access to additional capital the Group's working capital situation may deteriorate.
The Nakama board will continue to manage the Group's businesses in accordance with market conditions and will give further updates accordingly.
Annual report and accounts
Due to the COVID-19 pandemic, Nakama will not be able to post its annual audited report and accounts for the financial year ended 31 March 2020 (the "Annual Report") to shareholders by 30 September 2020. Nakama has applied to AIM Regulation, pursuant to the guidance provided by AIM Regulation in "Inside AIM" on 26 March 2020, for an additional period of up to 3 months to publish the Annual Report. AIM Regulation has granted the extension and therefore Nakama will publish the Annual Report by no later than 31 December 2020.
The Company has been granted an extension of time to file the Annual Report with the Companies House until 31 December 2020.
Enquiries:
Nakama Group plc | www.nakamaglobal.com |
Tim Sheffield, Chairman | 00 44 20 7236 2400 |
Robert Thesiger, Chief Executive Officer
| 00 44 20 3588 4560
|
Allenby Capital Limited (Nominated Adviser and Broker) | 00 44 20 3328 5656 |
Nick Naylor / Liz Kirchner (Corporate Finance) Guy McDougall (Sales) |
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Notes to Editors:
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 and Asia; and
· 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 and Singapore by AIM listed Highams Systems Services Group plc.