Rtc Grp. Regulatory News (RTC)

RTC Group Plc ("RTC", "the Company" or "the Group")

Preliminary results for the year ended 31 December 2011

RTC Group Plc, a support services group, which provides recruitment and conferencing services, is pleased to announce its preliminary results for the year ended 31 December 2011.

HIGHLIGHTS

- Group revenue from continuing operations of £29.5m (2010: £19.6m)

- Group operating loss from continuing operations before exceptional items of £87,000 (2010: £492,000)

- Loss for the year attributable to equity holders of £611,000 (2010: £958,000)

- Loss per share from continued and discontinued operations of 5.10p (2010: 10.62p)

- Dividends the Board believes that it would not be prudent to use financial resources to declare a final dividend at this time (2010: nil)

- Recruitment made an operating profit before exceptional items of £211,000 (2010: £210,000)

- Conferencing made an operating profit of £35,000 (2010: loss £277,000)

Commenting on the results Bill Douie, Chairman, said:

"Our strategic plan has identified significant opportunities to build on our expertise in managed service operations globally, in development of our presence in India, in the services to SME industrial clients through our branch network in England and in labour supply in the UK. Implementation of the management development and re-structuring programme has given us a team capable of pursuing those opportunities."

ENQUIRIES:

RTC Group Plc Tel: 01332 861 844

Bill Douie, Executive Chairman

Andy Pendlebury, Chief Executive

Allenby Capital Limited Tel: 020 3328 5656

Jeremy Porter, Corporate Finance

Mark Connelly, Corporate Finance

Chairman's Statement

I am pleased to present the final report for the year ended 31st December 2011.

GROUP

2011 has been the first complete year when the Group has traded in its new reorganised structure. Although the Derby Conference Centre is not an obvious core business in a recruitment company it is a sound and profitable business and serves to provide, in addition, a Head Office for the Group. All other businesses in the Group are involved in Recruitment and fall into three divisions: UK white collar recruitment, International Managed Service and UK labour supply.

TRADING

ATA Recruitment Limited

UK white collar recruitment provides personnel, both permanent and contract, mainly to industrial clients in vertical markets through our premises in the Derby Conference Centre and to the SME industrial market through six UK branches. Both markets have continued to make steady progress. In the period under review, revenues were up 16% at £15.825m, generating an operating profit of £357,000 (2010 : £15,000)

International Managed Service has continued to expand its operations in NATO premises in Afghanistan. Revenues in 2011 were up 221% at £7,088m but significant operating difficulties during a period of rapid turnover increases resulted in an operating loss of (£66,000) (2010 : profit £169,000). All of the operational problems have now been eliminated and the business is running profitably.

Ganymede Solutions Limited had another good year in its traditional markets of Rail, Infrastructure, Trades and labour. An initial entry into the Telecoms sector was not successful and resulted in a material non-recurring loss of £378,000 in the first half of the year. Revenues were up 74% at £4.843m and operating profit, before exceptional items, were £194,000 (2010 : £26,000).

The Derby Conference Centre continued to make steady improvements in performance in a difficult market environment. Revenues were up 36% in the period under review at £1.763m, generating an operating profit of £35,000 (2010 : loss £277,000).

Non - recurring item.  As announced in our interim statement, our entry into the Telecoms industry, whilst providing contractors to high quality end-user clients, was serviced through a third party agent who proved to be of inferior quality, resulting in an exceptional loss of £378,000. This business area has been discontinued and investigations by the relevant authorities into potential fraud by the third party are ongoing. As a direct consequence, Group liquidity was adversely affected and movements between dollar, euro and sterling accounts, which would not normally have taken place, led to exchange losses and costs of £274,000.

Overall Group trading performance, built on three growing recruitment businesses, improved at the operating profit level, but the final outcome was materially adversely affected by both the growing pains in the Managed Services division and our unsuccessful entry into Telecoms contract recruitment.

CAPITAL INVESTMENT

During the year, although capital investment was limited by the need to divert the majority of incoming cash flow into working capital to finance growth in trading volumes, it was possible to continue the upgrade of the Derby Conference Centre premises as further space was brought back into use.

DIVIDENDS

Your directors believe that it would not be prudent to use financial resources to declare a final dividend at this time.

MANAGEMENT

During the year, development of our management structure at all levels continued apace and following the year-end a re-structure has taken place following the creation of two operating divisions, each with its own management team reporting direct to the CEO and three Operations Directors have been appointed. These moves, in addition to reflecting the qualities of the affected individuals and the growth of the underlying businesses are also necessary to provide an appropriate level of management to ensure the capture of growth opportunities which have been identified in our strategic plan.

THE GROUP BOARD

During the year we appointed our two key senior managers and a Non - Executive Director, John T White, to the Group Board, who were all confirmed at the Annual General Meeting on 22nd June 2011. Since the year end Gary Hewett, Executive Director, has left the Group.

ISSUE OF NEW EQUITY

Under the authority granted at the Annual General Meeting in 2010, we announced on 3 May 20011, a subscription of new shares in the Company, by certain directors and senior management, raising £396,000 net of expenses.

BALANCE SHEET

As at 31 December 2011 the Group had net assets of £637,000 (2010: 849,000). Group borrowings at the end of the year stood at £3,149,000 (2010: £2,231,000) leaving £2,051,000 undrawn of the Group's £5.2m invoice discounting facility.

CORPORATE GOVERNANCE

RTC Group takes very seriously its corporate governance obligations. Whilst we recognise the potential input of an appropriate number of Non-Executive Directors we presently feel that the appointment of one is adequate at this stage in the Group growth profile. We are indebted to John White for his help and guidance in 2011.

OUTLOOK

The Group has now completed a major and essential re-organisation and is entirely focused on recruitment services with the addition of conferencing activities at our Head Office premises. Major inroads have been made in international markets led by our contract to serve NATO establishments in Afghanistan and the establishment, post year end, of our new 90% owned company in India. Operating difficulties in the International Division have also been eliminated. Our strategic plan has identified significant opportunities to build on our expertise in managed service operations globally, in development of our presence in India, in the services to SME industrial clients through our branch network in England and in labour supply in the UK. Implementation of the Management development and re-structuring programme has given us a team capable of pursuing those opportunities.

We look forward to further growth of revenues and a material improvement in underlying profitability in 2012.

STAFF

We continue to enjoy the benefits of a growing team of loyal and conscientious management and staff. They have my admiration and thanks and I feel privileged to work with them.

W.J.C. Douie, Chairman 17 May 2012

Consolidated Statement of Comprehensive Income

Year ended 31 December 2011

There is no dilutive effect of share options

Consolidated Statement of Changes in Equity

Year ended 31 December 2011

Year ended 31 December 2010

The Share based payment reserve comprises of the cumulative share option charge under IFRS 2 less the value of any share options that have been exercised or have lapsed.

Consolidated Statement of Financial Position

The financial statements were approved and authorised for issue by the Board and were signed on its behalf on 17 May 2012 by:

A Bailey Director

A M Pendlebury Director

Consolidated Statement of Cash Flows

Year ended 31 December 2011

Notes

1. CORPORATE INFORMATION

The announcement of audited results of the Group for the year ended 31 December 2011 was authorised for issue in accordance with a resolution of the directors on 17 May 2012. RTC Group Plc is a public limited company incorporated and domiciled in England whose shares are publicly traded. The principal activities of the Group are described in note 5.

The financial information included in this announcement has been compiled in accordance with International Financial Reporting Standards ("IFRS"), including International Accounting Standards ("IAS") and interpretations issued by the International Accounting Standards Board ("IASB") and its committees, and as adopted by the EU. This announcement does not however contain sufficient information to comply with IFRS.

The accounting policies adopted are consistent with those described in the annual financial statements for the year ended 31 December 2010. There have been no significant changes in the basis upon which estimates have been determined, compared to those applied at 31 December 2010 and no change in estimate has had a material effect on the current period.

2. DIVIDENDS

The Board do not recommend the payment of a final dividend for the year.

3. LOSS PER SHARE

The calculation of basic and diluted earnings per share from continuing and discontinued operations is based on a loss after tax expense of £611,000 (2010: loss £958,000) and a weighted average of 11,974,276 (2010: 9,022,564) shares in issue.

The outstanding share options were not considered to be dilutive in 2011 nor 2010.

4. Discontinued Operations

In August 2011, the Board decided to discontinue the activity of Global Choice Recruitment Ltd. (2010: on 25 June 2010, the Board decided to discontinue funding the Group's Training Division and hence the Board of Catalis Limited put this company into administration). The loss for the discontinued operations is stated after charging:

Details of net assets disposed as a result of the administration of Catalis Limited and the associated loss for the period resulting from this are as follows:

5. Segmental Analysis

The Group is a provider of Recruitment and Conferencing Services and operates a division for each, made up from a number of legal entities. Segmental information is provided below in respect of Recruitment and Conferencing operations. The Group manages its divisions, the trading performance and working capital by monitoring operating profit before exceptional items and centrally manages Group taxation, capital structure and spend, including net equity and net debt.

The Conferencing division services are wholly provided in the UK. A growing proportion of the Recruitment division revenues now derive from overseas activities.

Revenues are generated from permanent and temporary recruitment in the Recruitment division and from the provision of a conferencing and hotel facility in Derby for the Conferencing division.

All revenues have been invoiced to external customers. Revenues of £7.1m (2010: £2.2m) in the recruitment division were derived from a single external customer.

The segmental analysis of revenue, gross margin, operating profit before exceptional goodwill write off and net assets is as follows: -

All assets and liabilities are held in the United Kingdom.

6. Income Tax

7. Exceptional Administrative Costs

As further explained in the Chairman's statement, during the year the Group has experienced a non recurring bad debt of £378,000, including legal fees to date, from a 3rd party agent.

Report & Accounts

The above financial information does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010 but is derived from those accounts. The auditor has reported on these accounts; their report was unqualified, did not draw any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation.The statutory accounts for 2010 have been filed with the Registrar of Companies.

Full audited accounts of RTC Group plc for the year ended 31 December 2011 will be dispatched to shareholders, made available on the Company's website at www.rtcgroupplc.co.uk and will be available from the Company's registered office:- The Derby Conference Centre, London Road, Derby, DE24 8UX in advance of the AGM.