PRP.L Regulatory News (PRP)

9th November 2016

Prime People Plc

Unaudited Condensed Consolidated Interim Report

for the six months ended 30 September 2016

CHAIRMAN'S STATEMENT

Overview

I am pleased to be able to report the results for Prime People Plc for the half-year ended 30 September 2016.

The first half shows an operating profit of £0.76m (2015: £1.06m), consistent with the expectation in our recent trading statement of not less than £0.70m.

In line with the Outlook statement in the Company's 2016 Annual Report and Accounts, market conditions in the period became softer for our UK business. Offsetting this, our businesses in Asia performed strongly. The outcome for the period reflects the Company's commitment to grow internationally and to support new business lines, which increased our fixed cost base in the period being reported.

Financial Results

Group revenue increased by 12.55% for the period to £11.48m (2015: £10.20m).

Net Fee Income ("NFI") in the period for the Group was £6.33m which is a 1.87% increase on last year (2015: £6.21m). The first half of the financial year showed strong NFI performances in our Hong Kong and Singapore business units. In Asia NFI increased by 36.84% from £1.90m to £2.60m and in the UK NFI decreased by 12.82% from £3.90m to £3.40m.

Administrative costs for the group increased from £5.15m in 2015 to £5.57m in the first half of the financial year driven by talent investment and higher commission costs in Asia, in line with the fee income growth in the region.

Profit before taxation for the period has decreased to £0.76m (2015: £1.06m).

The charge for taxation of £0.15m is based on the expected annual effective tax rate of 20% (2015: 20%).

Basic earnings per share for the period decreased to 4.92p (2015: 6.97p).

Cash Flow

The Group continues to maintain a strong net cash position. At the end of the period the Group had net cash of £1.34m (2015: £1.04m).

Dividend

The Board will be declaring an interim dividend of 1.75p (2015: 1.75p).

Outlook

We have reasonable expectations that the UK businesses will perform in the second half year at levels comparable to the first half. Sentiment in the UK property sector has improved but there is uncertainty for the sector in the medium term. In Asia we expect similar performance from our businesses in the second half and increased opportunities for growth in the medium and long term.

The present focus for the Group is to maximize the returns from recent investment in businesses and people and to increase the productivity of the business. We continue to recruit new heads into those markets where there is potential for NFI and profit growth.

Robert Macdonald

Executive Chairman

9th November 2016

For further information please contact:

PRIME PEOPLE PLC

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2016

The above results relate to continuing operations.

The notes to the financial statements form an integral part of this unaudited condensed consolidated interim report.

PRIME PEOPLE PLC

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

As at 30 September 2016

The notes to the financial statements form an integral part of this unaudited condensed consolidated interim report.

PRIME PEOPLE PLC

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2016

PRIME PEOPLE PLC

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW

For the six months ended 30 September 2016

The notes to the financial statements form an integral part of this unaudited condensed consolidated interim report.

PRIME PEOPLE PLC

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT

For the six months ended 30 September 2016

1. General information

Prime People Plc ('the Company') and its subsidiaries (together 'the Group') is an international recruitment services organisation with offices in the United Kingdom, the Middle East and the Asia Pacific region from which it serves an international client base. The Group offers both permanent and contract specialist recruitment consultancy for large and medium sized organisations.

Prime People Plc is the Group's ultimate parent company. The Company is a limited liability company incorporated and domiciled in the United Kingdom. The address of Prime People Group's registered office and its principal place of business is 2 Harewood Place, London, W1S 1BX, England. Prime People Group's shares are quoted on the Alternative Investment Market (AIM) of the London Stock Exchange. The registered number of the company is 1729887.

This unaudited condensed consolidated interim report for the six months ended 30 September 2016 (including comparatives) is presented in GBP'000, and was approved and authorised for issue by the board of directors on 8 November 2016.

Copies of the interim results are available at the Company's registered office and on the Company's website - www.prime-people.co.uk.

This unaudited condensed consolidated interim report does not constitute statutory accounts of the Group within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2016 has been extracted from the statutory accounts for that year, which have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2. Basis of preparation

The unaudited condensed consolidated interim report for the six months ended 30 September 2016 has been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRSs") and in accordance with 'IAS 34, Interim financial reporting', as adopted by the European Union. The condensed consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31 March 2016 which were prepared in accordance with IFRSs as adopted by the European Union.

The Group was profitable for the period and has considerable financial resources comprising £1.34m of net cash at 30 September 2016. After making enquiries, the Directors have formed a judgement, at the time of approving the six months results, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months. For this reason the Directors continue to adopt the going concern basis in preparing the condensed set of financial statements.

These financial statements have been prepared under the historical cost convention, using the same accounting policies as those used in the preparation of the financial statements for the year ended 31 March 2016 and which are also expected to apply for the year ended 31 March 2017.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of the condensed consolidated interim report.

3. Segment reporting

(a) Revenue and net fee income by geographical region

All revenues disclosed by the group are derived from external customers and are for the provision of recruitment services. The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment profit before taxation represents the profit earned by each segment after allocations of central administration costs.

(b) Revenue and net fee income by classification

(c) Profit before taxation by geographical region

The analysis above is of the carrying amount of reportable segment assets, liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment and include income tax assets and liabilities. Non-current assets include goodwill, property, plant and equipment and computer software.

4. Income tax expense

The charge for taxation on profits for the interim period amounted to £0.15m (2015: £0.22m) an effective rate of 20% (2015: 20%).

5. Dividends

The interim dividend for 2017 of 1.75 pence (2016: 1.75 pence paid on 27 November 2015), was approved by the board on 8 November 2016 and will be paid on 25 November 2016 to those shareholders whose names are on the register on 18 November 2016.

6. Earnings per share

Earnings per share (EPS) are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options assuming dilution through conversion of all existing options.

Earnings and weighted average number of shares from continuing operations used in the calculations are show below:

7. Reconciliation of profit before tax to cash flow from operating activities

8. Reconciliation of net cash flow to movement in net funds

9. Trade and other receivables

10. Trade and other payables