PRP.L Regulatory News (PRP)

7 November 2013

Prime People Plc

Unaudited Condensed Consolidated Interim Report

 for the six months ended 30 September 2013

CHAIRMAN'S STATEMENT

Overview

Whilst trading across our revenue areas in the first half has been variable, Net Fee Income ('NFI') for the Group is broadly the same as for the corresponding period last year but with improving NFI in the second quarter across the Group. NFI from the Rest of the World, representing less than 10% of total NFI, has fallen by 33% whereas in the UK and Asia NFI has increased, by 4% and 7% respectively.

With a back-drop of improved trading conditions, we continue with the development of our international businesses in Asia, which we believe will provide us with increased opportunities for growth in the mid to long term.

Permanent recruitment remains the main focus of our business representing 90% of NFI compared to 91% in the comparable period for 2013.

The Group is pleased to report a much improved operating profit of £0.3m in the first half of its financial year compared to £0.1m achieved in the comparable period last year. The improved performance reflects a slightly better than break even performance from our Singapore office in the period compared to losses associated with the investment in Singapore this time last year.

Financial Results

Group revenue increased by 8% for the period, to £6.8m (2012:£6.3m) mainly due to an increase in turnover of our UK temporary business.

NFI remained the same at £3.8m (2012:£3.8m)

Administrative costs for the group have reduced from £3.7m in 2012 to £3.5m in the current period reflecting the tight cost controls that the Group continue to maintain over its businesses.

Profit before taxation for the period has increased to £0.3m (2012:£0.1m)

The charge for taxation is based on the expected annual effective tax rate of 23% (2012:43%%, which, as previously noted, was high in this period because of the impact of applying lower tax rates to the costs arising from our business in Singapore).

Basic earnings per share for the period has increased to 1.94p (2012:0.57p).

CHAIRMAN'S STATEMENT (cont)

Cash Flow

The Group maintained a strong net cash position of £2.8m (2012:£ 2.1m) at the end of the period. Cash generated by the business in the period amounted to £0.97m (2012: cash used £0.46m), which after dividend payment of £0.37m (2012:£ 0.27m), resulted in a net cash inflow of £0.56m (2012: cash outflow £0.73m).

Dividend

Given the level of trading in the first half of 2013 the Board will be declaring an interim dividend of 1.00p (2012: 1.00p).

Outlook

As we step into the second half of the year we have reasonable expectations that the UK businesses will continue to perform at least at similar levels to the first half of the year or better. We are looking for continued improved performance from our businesses in Asia, but have conservative expectations as to the likely performance from our businesses in the Rest of the World.

The focus for the Group is to maximize the returns from recent investments and continue to recruit new heads into those markets where there is potential for NFI and profit growth.

Robert Macdonald

Executive Chairman

7 November 2013

For further information please contact:

 UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2013

The above results relate to continuing operations.

The notes on pages 7 to 12 form an integral part of this unaudited condensed consolidated interim report.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

As at 30 September 2013

The notes on pages 7 to 12 form an integral part of this unaudited condensed consolidated interim report.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2013

The notes on pages 7 to 12 form an integral part of this unaudited condensed consolidated interim report.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW

For the six months ended 30 September 2013

The notes on pages 7 to 12 form an integral part of this unaudited condensed consolidated interim report.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT

For the six months ended 30 September 2013

1. General information

Prime People Plc ("the Company") and its subsidiaries' (together "the Group") principal activity is the provision of permanent and temporary recruitment services to large and medium sized organisations. The Group's focus has been to provide services to the built environment sector, the energy and environment sector, for customer insight staff and the pharmaceutical research sector.

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.

This unaudited condensed consolidated interim report for the six months ended 30 September 2013 (including comparatives) is presented in GBP'000, and was approved and authorised for issue by the board of directors on 7 November 2013.

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 2013 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 2013 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 2013 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 £2.75m of net cash at 30 September 2013. 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 2013 and which are also expected to apply for the year ended 31 March 2014. 

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

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT

For the six months ended 30 September 2013

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.

(b) Revenue and net fee income by classification

(c) Profit before taxation by geographical region

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT 

For the six months ended 30 September 2013

3. Segment reporting (continued)

(d) Segment non-current assets by geographical region

(e) Segment liabilities 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 £0.07m (2012: £0.05m) an effective rate of 23% (2012: 43%).

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT 

For the six months ended 30 September 2013

5. Dividends

The interim dividend for 2014 of 1.00 pence (2013: 1.00 pence paid on 29 November 2012) was approved by the board on 7 November 2013 and will be paid on 29 November 2013 to those shareholders whose names are on the register on 22 November 2013.

6. Earnings per share

Earnings per share (EPS) is 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:

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT 

For the six months ended 30 September 2013

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

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

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT 

For the six months ended 30 September 2013

9. Trade and other receivables

10. Trade and other payables