PRP.L Regulatory News (PRP)

8 November 2012

Prime People Plc

Unaudited Condensed Consolidated Interim Report

 for the six months ended 30 September 2012

CHAIRMAN'S STATEMENT

Overview

The first half of our financial year has provided challenging market conditions.. However, we have continued with the expansion of our international business, which we believe will provide us with increased opportunities for growth in the future.

The six months have seen variable trading across our revenue areas resulting in an overall reduction in Net Fee Income ('NFI') of 12 per cent. As identified in our trading update of August 2012, our UK region experienced a fall in NFI whereas NFI from our international business has shown a modest increase.

Permanent recruitment in the period is 91 per cent of NFI, compared to 92 per cent in the comparable period.

The Group has delivered an operating profit of £0.1m in the first half of its financial year compared to £0.5m achieved in the comparable period last year.

The results reflect investment in our Singapore office and further investment in Hong Kong. The Singapore office is now established with five fee earners in place and we look forward to it making a meaningful contribution to the business. Also, over the last six months there has been a significant investment made in creating and developing new branding for our businesses. Investment has been focused upon creating strong brand identities, marketing collateral, innovative social media tools and new websites.

Financial Results

Group revenue declined by 5% for the period to £6.3m due to the reduction in our UK permanent business (2011:£6.6m).

NFI decreased by 12% to £3.8m (2011:£4.3m) as a result of a drop in UK NFI of 21% which has been partially offset by an increase in International NFI of 7%.

The reduction in profit before taxation for the period to £0.1m (2011:£0.5m) is the result of lower levels of activity in the UK, further investment in our Hong Kong business, the commitment that we have made to developing a new business in Singapore and the investment in branding, new media and websites.

CHAIRMAN'S STATEMENT (continued)

The charge for taxation is based on the expected annual effective tax rate of 43% which is high in this period because of the impact of applying lower tax rates to the costs arising from our business in Singapore (2011:28%).

Basic earnings per share for the period were 0.57p (2011:3.03p).

Cash Flow

The Group maintained a strong net cash position of £2.1m (2011:£2.9m) at the end of the period. Cash used by the business in the period amounted to £0.46m (2011: cash generated £0.15m), which after dividend payment of £0.27m (2011:£0.27m), resulted in a net cash outflow of £0.73m (2011: £0.2m).

Dividend

Given the level of trading in the first half of 2012 the Board will be declaring an interim dividend of 1.00p (2011:1.84p).

Outlook

Subject to economic circumstances in the regions in which we operate not deteriorating further, we currently expect the businesses in the UK to perform in the second half in line with levels achieved in the first half. Internationally we are currently expecting an increase in performance compared with the period being reported.

We believe our business is appropriately sized and structured to meet the levels of expected business. However, we continue to exercise tight cost control and to monitor carefully the performance in our various revenue areas.

Robert Macdonald

Executive Chairman

8 November 2012

For further information please contact:

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2012

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 2012

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 2012

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 2012

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 2012

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 these services to the built environment sector and more recently this has been broadened to include provision of recruitment services for customer insight staff, the energy and environment sector 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 40A Dover Street, London, W1S 4NW, 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 2012 (including comparatives) is presented in GBP'000, and was approved and authorised for issue by the board of directors on 8 November 2012.

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 2012 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 2012 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 2012 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 £2.1m of net cash at 30 September 2012. 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 2012. 

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 2012

3. Segment reporting

(a) Revenue and net fee income by geography

(b) Revenue and net fee income by recruitment classification

(c) Profit before taxation by geographical region

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT 

For the six months ended 30 September 2012

3. Segment reporting (continued)

(d) Total non-current assets

(e) Total liabilities

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 property, plant and equipment and computer software.

4. Income tax expense

The charge for taxation on profits for the interim period amounted to £0.05m (2011: £0.14m) an effective rate of 43% (2011: 28%).

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORT 

For the six months ended 30 September 2012

5. Dividends

The interim dividend for 2013 of 1.00 pence (2012: 1.84 pence paid on 25 November 2011) was approved by the board on 8 November 2012 and will be paid on 29 November 2012 to those shareholders whose names are on the register on 23 November 2012.

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 2012

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 2012

9. Trade and other receivables

10. Trade and other payables