TIDMIPEL
RNS Number : 9792R
Impellam Group plc
11 May 2009
?
PRELIMINARY RESULTS
FOR THE PERIOD ENDED 31 DECEMBER 2008
Impellam Group plc ("Impellam" or "the Group") announces its preliminary results
for the period ended 31 December 2008.
Financial highlights - pro forma basis
* Turnover up 9.7% to GBP1,070.0 million (December 2007: GBP975.3 million)
* Gross profit up 1.7% to GBP189.6 million (December 2007: GBP186.3 million)
* Operating profit, before exceptional items and amortisation of intangible
assets, GBP11.9 million (December 2007: GBP15.5 million)
* Operating loss GBP2.4 million (December 2007: loss GBP3.4 million)
* Net debt reduced to GBP61.8 million (December 2007: GBP63.3 million)
* Adjusted earnings per share of 16.1p (December 2007: 30.5p)**
Financial highlights - statutory basis
* Turnover up 87.1% to GBP755.6 million (year ended 31 March 2008: GBP403.8
million)
* Gross profit up 76.1% to GBP131.9 million (year ended 31 March 2008: GBP74.9
million)
* Operating profit, before exceptional items and amortisation of intangible
assets, GBP8.8 million (year ended 31 March 2008: GBP3.8 million)
* Operating loss GBP3.8 million (March 2008: profit GBP2.2 million)
* Adjusted earnings per share of 10.7p (year ended 31 March 2008: 12.1p)**
Operational highlights - pro forma basis
* Merger of Carlisle and CSG completed. Impellam now one of the largest UK quoted
staffing business as measured by net fee income.
* Merger synergies of GBP10.3 million identified and implemented.
* Annualised cost base entering 2009 is GBP20.0 million lower than the cost base
entering 2008.
* Positive cash generation from operations, and net debt reduced.
Recruit Event Services Limited update
* Discovery of accounting irregularities in Recruit Event Services Limited dating
back to the start of 2007. Investigation completed and increased central
control being introduced.
Desmond Doyle, Chief Executive Officer of Impellam, commented:
"Considering the extraordinary economic conditions in our key markets of the USA
and UK I believe these are solid results. The business rationale for the merger
of Carlisle and CSG has not changed and we continue to review our portfolio of
businesses to ensure we have a strong focused Group well placed to benefit when
the economic environment improves."
** before exceptional items and the amortisation of intangible assets
For further information please contact:
+-----------------------------------------------------------+--------------+
| Impellam Group plc | |
+-----------------------------------------------------------+--------------+
| Desmond Doyle, Chief Executive Officer | Tel: |
| | 01582 692658 |
+-----------------------------------------------------------+--------------+
| Andrew Burchall, Group Finance Director | Tel: |
| | 01582 692658 |
+-----------------------------------------------------------+--------------+
| Naomi Stuart, Marketing and Communications Manager | Tel: |
| | 01582 692624 |
+-----------------------------------------------------------+--------------+
| Cenkos Securities plc | |
| (Nominated Advisor and Broker to Impellam) | |
+-----------------------------------------------------------+--------------+
| Nicholas Wells | Tel: 020 |
| | 7397 8900 |
+-----------------------------------------------------------+--------------+
| Beth McKiernan | Tel: 020 |
| | 7397 8900 |
+-----------------------------------------------------------+--------------+
| Threadneedle Communications | |
+-----------------------------------------------------------+--------------+
| John Coles | Tel: 020 |
| | 7543 9848 |
+-----------------------------------------------------------+--------------+
| Josh Royston | Tel: 020 |
| | 7653 9844 |
+-----------------------------------------------------------+--------------+
Notes to Editors:
Impellam Group plc, listed on AIM, has operations in the UK and the USA, as well
as smaller operations in Australia, Ireland, New Zealand and Switzerland. The
Group operates across a broad range of staffing sectors and is complemented by
businesses in the outsourced support services sector.
Overview 2008
The year just ended saw the formation of Impellam Group plc ("Impellam" or "the
Group") through the merger of The Corporate Services Group plc ("CSG") and
Carlisle Group Limited ("Carlisle"). The merger has created one of the largest
UK quoted staffing businesses as measured by net fee income, and also a Group
with a diverse portfolio of brands which are well placed to capitalise on
opportunities in their respective market places.
In the UK, Impellam has a presence in each of the eleven staffing sectors
identified by the Recruitment and Employment Confederation and also operates in
the support services market place where the longer term nature of the contracts
offer better visibility in earnings and some resilience to the economic cycle.
Impellam also has a sizeable geographic presence in North America across a
number of industry verticals.
Reflecting the extraordinary economic conditions which we are seeing in our two
largest geographical markets, the Board continues to review the businesses in
its portfolio, at both a strategic and a tactical level, to ensure that each of
them have the longer term plans and vision together with management teams and
structures capable of delivering profitable growth and the creation of
shareholder value. This has resulted in a number of changes in organisation and
management in 2008 and we expect this review to continue throughout the first
half of 2009. The Board is confident that, when complete, these changes will
result in a stronger more focused Group which is better positioned to face the
economic and market challenges that the rest of this year is expected to bring.
Recruit Event Services
As we announced on 16 April 2009, accounting irregularities dating back to the
start of 2007 have been identified, post merger, in respect of Recruit Event
Services Limited, a business within our Support Services segment. This business
provides stewarding and ancillary services to sporting and entertainment venues
in the UK. These irregularities relate to the overstatement of revenues and
associated billed and unbilled receivables over a sustained period. The
circumstances around the overstatement have been independently investigated and
the business restructured and reorganised under new senior management and
increased central control is being introduced. The investigation is complete and
provisions amounting to GBP6.5 million have been made against revenues and
associated billed and unbilled receivables of which GBP2.4 million falls in the
pro forma period to 31 December 2007. This amount is slightly higher than
expected at the time of our initial announcement.
Strategy
Integration
A key feature of the merger was the limited overlap in markets in which we
operate. As we reported at the interim stage, our initial focus was to remove
the duplication in our customer offering in the Healthcare and Commercial
staffing business segments in the UK. More recently, the integration focus has
been on the merger of the two former head offices and the rationalisation, where
appropriate, of back office systems and processes and consequent reduction in
staff numbers. Substantial progress has been made in this area with the former
Carlisle head office vacated completely and all support staff now housed in one
location. The integration has allowed the Group to reduce the cost base, on a
pro forma basis by GBP10.3 million of which GBP2.6 million was delivered in
2008. An exceptional charge of GBP5.7 million has been incurred in the period,
relating principally to the elimination of duplicated roles together with
provisions for vacated space and redundant assets.
Improved operational performance
Towards the end of 2008, and in common with a number of our competitors, we saw
a marked tightening in the recruitment market place. The traditionally strong
finish to the year in a number of our businesses was not as marked as we would
have normally expected. Accordingly, we instigated a cost reduction exercise
across the Group and further reduced our cost base by GBP6.2 million. An
exceptional charge of GBP2.4 million was incurred in this exercise, again
related to the elimination of roles and the vacation of surplus office capacity.
This programme of rationalisation will continue through the first half of 2009
as we better align the business to the market opportunities that exist.
On a pro forma basis, the conversion ratio (defined as the conversion of gross
profit into operating profit) was 6.3% in 2008, a decrease from 8.3% in 2007.
Given the operational and synergy savings identified, our mix of business and
our strategic intent to target more specialist business, the Board believes that
over the medium term there is scope to increase the conversion ratio
significantly to approach levels of performance more in line with our peer
group. This will continue to be a key objective for Impellam as the newly
combined Group looks to the future.
Portfolio
A key aim of the Board is to reduce Group indebtedness to more normal commercial
levels through the disposal of non-core businesses. At the interim stage, we had
identified a number of businesses within our portfolio for possible disposal.
Only where we are able to achieve suitable valuations for these businesses which
the Board believe to be in the best interests of shareholders will a disposal be
pursued. Our attention is on ensuring that all businesses within our portfolio
are managed to deliver profitable growth and are capable of delivering a
superior return to shareholders.
Vision
It continues to be the Group's longer term intention to increase both the number
of sectors and the geographies in which it operates. The merger which created
Impellam was driven in part by this rationale. Impellam will seek to manage its
portfolio of brands to respond to these trends by looking to expand operations
through planned investment in people and brands, particularly in the healthcare
and specialist professional & technical markets. In time this will be
accompanied by acquisitions where the Group sees opportunities at sensible
valuations.To this end, Medacs acquired a small permanent placement business in
Australia in December 2008 to take advantage of the increased
internationalisation of medical recruitment.
Statutory financial information
The statutory results of the Group comprise the results of Impellam from
incorporation, Carlisle for three quarters of the year and CSG from the date of
acquisition. The comparative financial information represents the unaudited 12
months period of Carlisle for the year ended 31 March 2008. These comparative
figures include an adjustment of GBP3.3 million to restate them for the
accounting irregularities identified with Recruit Event Services relating to the
overstatement of revenues and associated billed and unbilled receivables.
On a statutory basis, Group turnover for the period ended 31 December 2008
increased by 87.1% to GBP755.6 million (year ended 31 March 2008: GBP403.8
million). Overall gross profit increased 76.1% to GBP131.9 million (year ended
31 March 2008: GBP74.9 million), with the Group's gross profit margin reduced at
17.5% (year ended 31 March 2008: 18.5%). Administrative expenses, including
normal charges for depreciation and amortisation but before amortisation of
intangibles arising from the fair values attributed to CSG customer
relationships and exceptional items, increased by 73.1% to GBP123.1 million
during the period (year ended 31 March 2008: GBP71.1 million).
After deducting these expenses, the resulting operating profit, before
amortisation of intangibles and exceptional items, increased by GBP5.0 million
to GBP8.8 million (year ended 31 March 2008: GBP3.8 million). After deducting
net exceptional items of GBP9.9 million (year ended 31 March 2008: GBP1.6
million), reflecting professional costs in relation to the merger and the costs
of the transition and integration, and amortisation of intangibles relating to
CSG's customer relationships of GBP2.7 million (year ended 31 March 2008:
GBPnil ), the loss before interest and taxation was GBP3.8 million (year ended
31 March 2008: profit of GBP2.2 million). Once net finance expense of GBP4.0
million (year ended 31 March 2008: GBP1.0 million) and taxation of GBP1.0
million (year ended 31 March 2008: GBPnil) have been deducted the loss for the
period was GBP8.8 million (year ended 31 March 2008: profit of GBP1.2 million).
The adjusted earnings per share was 10.7p (year ended 31 March 2008: 12.1p); the
unadjusted loss per share was 25.0p (year ended 31 March 2008: earnings of
5.2p).
Pro forma financial information
To enable a more meaningful comparison to be made, the financial information
included in this report incorporates certain unaudited pro forma income
statement, balance sheet and cash flow information for Impellam as if the merger
of Carlisle and CSG had taken place on 1 January 2007 rather than in May 2008.
This unaudited pro forma information is provided in order to give shareholders a
clearer indication of the underlying trading of the newly formed Group rather
than purely statutory information which includes the results of Impellam from
incorporation, Carlisle for three quarters of the period and CSG from the date
of acquisition. Further reference should be made to note 1 "Pro forma
information".
Pro forma financial results for the year to 31 December
Although operated independently, the UK staffing brands have been aggregated,
for reporting purposes into:
* Commercial;
* Professional & Technical; and
* Healthcare
These reflect common attributes, either in the nature of the candidates and
clients, or in the manner in which they conduct business. The table below sets
out the pro forma results for the Group by segment, excluding amortisation and
exceptional items, for the full year of 2008 with comparisons against the full
prior year.
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Group results - pro | Turnover | Gross profit | Operating |
| forma basis | | | profit |
+---------------------+----------------------------+---------------------------+-----------------+
| GBP'million | 2008 | 2007 | % | 2008 | 2007 | % | 2008 | 2007 |
| | | | change* | | | change* | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| UK Staffing - | 457.4 | 407.4 | 12.3 | 77.0 | 75.0 | 2.5 | 6.8 | 6.3 |
| Commercial | | | | | | | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| UK Staffing - | 177.1 | 151.4 | 17.0 | 33.1 | 31.9 | 3.8 | 2.1 | 3.0 |
| Professional & | | | | | | | | |
| Technical | | | | | | | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| UK Staffing - | 143.9 | 110.1 | 30.7 | 22.3 | 19.1 | 16.8 | 5.8 | 3.8 |
| Healthcare | | | | | | | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| US Staffing | 175.8 | 187.8 | (13.2) | 35.9 | 37.7 | (11.7) | 0.7 | 4.7 |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Support services | 116.9 | 119.3 | (2.0) | 21.3 | 22.6 | (5.9) | 1.4 | 3.5 |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Intercompany | (1.1) | (0.7) | | - | - | | - | - |
| revenue | | | | | | | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| | 1,070.0 | 975.3 | 9.7 | 189.6 | 186.3 | 1.7 | 16.8 | 21.3 |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Central costs | | | | | | | (4.9) | (5.8) |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Operating profit | | | | | | | 11.9 | 15.5 |
| before amortisation | | | | | | | | |
| of intangibles and | | | | | | | | |
| exceptional items | | | | | | | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Amortisation of | | | | | | | (2.7) | - |
| intangibles | | | | | | | | |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Exceptional items | | | | | | | (11.6) | (18.9) |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
| Operating loss | | | | | | | (2.4) | (3.4) |
+---------------------+---------+--------+---------+--------+--------+---------+--------+--------+
* measured in local currency
On a pro forma basis, Group turnover for the year ended 31 December 2008
increased 9.7% to GBP1,070.0 million (December 2007: GBP975.3 million). Overall
gross profit on a pro forma basis increased 1.7% to GBP189.6 million (December
2007: GBP186.3 million), with the Group's gross profit margin reduced on last
year at 17.7% (December 2007: 19.1%). This reduction in gross profit margin, in
part, reflects a change in the mix of temporary and permanent recruitment.
Permanent placements accounted for 14.8% of the Group's gross profit in 2008,
(December 2007: 16.8%). The reduction in permanent placement business was
particularly noticeable in our professional markets and across the majority of
our businesses in quarter four. The gross profit margin on our temporary
business has also reduced slightly as our balance has moved away from the
traditional high street market place into more longer term professional and
technical assignments.
Administrative expenses, including normal charges for depreciation and
amortisation but before amortisation of intangibles arising from the fair values
attributed to CSG customer relationships and exceptional items, increased 4.0%
to GBP177.7 million (December 2007: GBP170.8 million). During 2008 the Group
saw its cost base increase initially, reflecting the full year impact of
acquisitions made during 2007 together with planned investment in headcount.
This was followed by a reduction in quarter three as costs were
removed following the merger and also in quarter four as the cost base was
further rationalised in the face of our key markets tightening. Consequently we
entered 2009 with an annualised cost base some GBP20.0 million lower than we
started 2008, even after taking into account the adverse impact of the
strengthening US dollar. After deducting these expenses, the resulting operating
profit, before amortisation of intangibles and exceptional items, decreased by
GBP3.6 million to GBP11.9 million (December 2007: GBP15.5 million).
After deducting net exceptional items of GBP11.6 million (December 2007: GBP18.9
million), largely attributable to professional costs relating to the merger of
GBP2.8 million, the costs of transition and integration of GBP8.1 million, as
well as amortisation of intangibles relating to CSG's customer relationships of
GBP2.7 million (December 2007: GBPnil), the loss before interest and taxation
was GBP2.4 million (December 2007: GBP3.4 million). Once net finance expense of
GBP5.6 million (December 2007: GBP6.6 million), which includes an exceptional
charge of GBP0.4 million (December 2007: GBP0.9 million), and taxation of GBP1.0
million (December 2007: credit of GBP1.0 million) have been deducted the loss
for the period was GBP9.0 million (December 2007: GBP9.0 million). The adjusted
earnings per share was 16.1p (December 2007: 30.5p); the unadjusted loss per
share was 25.5p (December 2007: 25.5p).
Cash flow
On a pro forma basis, the net cash generated by operations in the year was
GBP18.0 million (2007: GBP14.3 million) reflecting the operating result, before
exceptional items, for the year.
After net interest payments of GBP4.4 million (2007: GBP6.1 million), tax paid
of GBP0.6 million (2007: GBP0.6 million), net acquisition cost of GBP4.4 million
(2007: GBP2.7 million), dividends of GBP4.0 million (2007: GBP3.0 million), and
net capital expenditure of GBP6.2 million (2007: GBP5.1 million), net cash
outflow in the year amounted to GBP1.5 million (2007: inflow GBP0.4 million).
After the impact of foreign exchange on the Group's US indebtedness, net debt
reduced by GBP1.5 million to GBP61.8 million (December 2007: GBP63.3 million).
Days' sales outstanding at 31 December 2008, which is our principal working
capital measurement, decreased 1.9 days to 38.3 days (2007: 40.2 days). This
reflects a continued focus on cash collection and debtor management. Both of the
staffing businesses which merged to form Impellam had strong cash collection
protocols and this ethos has continued with Impellam. It remains a key focus of
the Board to monitor and maintain DSO and to ensure that cash collection and
credit risk is managed properly throughout the organisation.
UK Staffing - Commercial
Our Commercial staffing segment includes those staffing brands that operate in
the main clerical and industrial markets through a network of branches. The
principal brands include ABC Contract Services (construction), Blue Arrow
(catering, managed services, office and industrial), Carlisle Managed Solutions
and Tate (office). Following the merger, the former Carlisle Recruit Employment
Services brand was combined with the Blue Arrow business allowing us to remove
duplication of branches and management structures so significantly reducing the
cost base of the combined businesses.
The pro forma results for this segment are as follows:
+-----------------------+------------------+----------------+------------------+
| Year ended 31 | 2008 | 2007 | Growth |
| December | | | |
+-----------------------+------------------+----------------+------------------+
| | GBPm | GBPm | % |
+-----------------------+------------------+----------------+------------------+
| Turnover | 457.4 | 407.4 | 12.3 |
+-----------------------+------------------+----------------+------------------+
| Gross profit | 77.0 | 75.0 | 2.5 |
+-----------------------+------------------+----------------+------------------+
| Administrative | 70.2 | 68.7 | 2.1 |
| expenses | | | |
+-----------------------+------------------+----------------+------------------+
| EBIT** | 6.8 | 6.3 | 6.5 |
+-----------------------+------------------+----------------+------------------+
| Gross profit | 16.8% | 18.4% | |
| percentage % | | | |
+-----------------------+------------------+----------------+------------------+
| EBITDA return on sale | 1.9% | 2.1% | |
| % | | | |
+-----------------------+------------------+----------------+------------------+
| Conversion ratio | 8.8% | 8.5% | |
| (EBIT as a % of Gross | | | |
| Profit) | | | |
+-----------------------+------------------+----------------+------------------+
| Permanent fees % GP | 17.6% | 19.7% | |
+-----------------------+------------------+----------------+------------------+
** before exceptional items and the amortisation of intangible assets
Overall turnover in this segment increased 12.3% to GBP457.4 million in 2008
(December 2007: GBP407.4 million) reflecting the annualised effect of wins in
our on-site and managed services businesses. This change in business mix,
coupled with a reduction in permanent placements, which accounted for 17.6% of
gross profit (2007: 19.7%), is reflected in the lower gross profit margin
percentage of 16.8% (2007: 18.4%). Gross profit has increased by 2.5% to GBP77.0
million (December 2007: GBP75.0 million).
The impact of the weakening UK economy was evident with the traditional
seasonal strength in quarter four not being seen. As a result, the business
segment saw a year-on-year reduction in gross margin in quarter four after
year-on-year growth in each of the other three quarters of the year. Of
particular note was the impact on our managed services business of the
contraction in UK car manufacturing and also the impact on our catering business
as discretionary spend was curtailed.
Administrative costs were well controlled, increasing by only 2.1% to GBP70.2
million (December 2007: GBP68.7 million). In the second half, costs were reduced
and we entered 2009 with a cost base, on an annualised basis, some GBP12.0
million lower than we entered 2008.As market conditions have deteriorated,
headcount has been actively reduced and costs are being closely controlled with
a focus on maintaining, and where possible, improving conversion. Operating
profit for the segment was GBP6.8 million, a marginal increase from GBP6.3
million in the comparable period in 2007 with a conversion ratio of 8.8% (2007:
8.5%).
UK Staffing - Professional and Technical
Our Professional & Technical staffing segment comprises the following principal
brands: Celsian (education); Chadwick Nott (legal); Hewitson Walker
(accounting); Indigo City (banking); IRC (Ireland); S.Com (technical); and SRG
(scientific).
+-----------------------+------------------+----------------+------------------+
| Year ended 31 | 2008 | 2007 | Growth |
| December | | | |
+-----------------------+------------------+----------------+------------------+
| | GBPm | GBPm | % |
+-----------------------+------------------+----------------+------------------+
| Turnover | 177.1 | 151.4 | 17.0 |
+-----------------------+------------------+----------------+------------------+
| Gross profit | 33.1 | 31.9 | 3.8 |
+-----------------------+------------------+----------------+------------------+
| Administrative | 31.0 | 28.9 | 7.2 |
| expenses | | | |
+-----------------------+------------------+----------------+------------------+
| EBIT | 2.1 | 3.0 | (29.0) |
+-----------------------+------------------+----------------+------------------+
| Gross profit | 18.7% | 21.1% | |
| percentage % | | | |
+-----------------------+------------------+----------------+------------------+
| EBITDA return on sale | 1.7% | 2.5% | |
| % | | | |
+-----------------------+------------------+----------------+------------------+
| Conversion ratio | 6.4% | 9.4% | |
| (EBIT as a % of Gross | | | |
| Profit) | | | |
+-----------------------+------------------+----------------+------------------+
| Permanent fees % GP | 33.8% | 41.2% | |
+-----------------------+------------------+----------------+------------------+
Overall turnover in the segment increased 17.0% to GBP177.1 million in 2008
(December 2007: GBP151.4 million) principally reflecting contract wins in our
S.Com business. Gross profit increased 3.8% to GBP33.1 million (December 2007:
GBP31.9 million) with permanent recruitment accounting for 33.8% of gross profit
in the year (2007: 41.2%).
As 2008 progressed the markets for our legal, banking and accounting businesses
have become increasingly tougher. Quarter four in particular saw real challenges
as the full impact of the UK banking crisis began to be felt. However our
education, technical and scientific businesses have continued to show underlying
resilience driven by longer term contracts with organisations operating in less
cyclical markets.
Administrative costs in the segment have increased 7.2% to GBP31.0 million
(December 2007: GBP28.9 million). This reflects planned investment to support
the growth we have seen in our technical business, particularly in the aviation
sector, partially offset by reductions in costs in our professional brands as we
have downsized to better match the volume of permanent activity in the market
place. Accordingly, the segment has seen operating profit reduce by 29.0% to
GBP2.1 million (December 2007: GBP3.0 million). The conversion ratio within this
segment has also reduced to 6.4% from 9.4%.
UK Staffing - Healthcare
Our Healthcare staffing segment comprises Medacs (doctors, nursing,
international recruitment and managed healthcare) and Chrysalis Care
(domiciliary care). These operations are under the direction of a single focused
management team with synergies from the merger already delivered in the form of
people, IT applications and locations.
+-----------------------+------------------+----------------+-------------------+
| Year ended 31 | 2008 | 2007 | Growth |
| December | | | |
+-----------------------+------------------+----------------+-------------------+
| | GBPm | GBPm | % |
+-----------------------+------------------+----------------+-------------------+
| Turnover | 143.9 | 110.1 | 30.7 |
+-----------------------+------------------+----------------+-------------------+
| Gross profit | 22.3 | 19.1 | 16.8 |
+-----------------------+------------------+----------------+-------------------+
| Administrative | 16.5 | 15.3 | 7.6 |
| expenses | | | |
+-----------------------+------------------+----------------+-------------------+
| EBIT** | 5.8 | 3.8 | 54.1 |
+-----------------------+------------------+----------------+-------------------+
| Gross profit | 15.5% | 17.3% | |
| percentage % | | | |
+-----------------------+------------------+----------------+-------------------+
| EBITDA return on sale | 4.3% | 3.8% | |
| % | | | |
+-----------------------+------------------+----------------+-------------------+
| Conversion ratio | 26.1% | 19.8% | |
| (EBIT as a % of Gross | | | |
| Profit) | | | |
+-----------------------+------------------+----------------+-------------------+
| Permanent fees % GP | 4.6% | 7.2% | |
+-----------------------+------------------+----------------+-------------------+
** before exceptional items and the amortisation of intangible assets
Overall turnover in the sector increased 30.7% to GBP143.9 million in
2008 (December 2007: GBP110.1 million) driven by continued strong demand for
healthcare professionals in general. Medacs was successful in retaining its
position on the new National Framework for locum doctors which commenced on 1
July 2008 and was also successful in securing a place on the framework
agreements for nursing and allied health professionals which were retendered in
the second half of the year. In the domiciliary care business, the combination
of the Celsian business with Chrysalis has delivered synergy benefits,
particularly in the front office application and candidate databases.
Gross profit in this segment increased 16.8% to GBP22.3 million in 2008
(December 2007: GBP19.1 million). However, the gross profit margin percentage
has declined from 17.3% to 15.5% reflecting not only continued pressure on
margins within the framework environments but also increasing pay rates to
temporary medical staff.
Permanent placement remains a significant opportunity to expand the healthcare
business, particularly to facilitate candidate movement from overseas. In
December 2008 we completed the purchase of Qantum Recruitment; an Australian
business with a focus on permanent placement, particularly in the doctor market
place. Through this acquisition, we have already been able to capitalise on our
UK doctor locum data base, one of the largest in the industry, to maximise the
placement opportunities that exist in the Australasian market place. Permanent
placements represented 4.6% of gross profit in 2008 (2007: 7.2%). It is our
intention to increase this percentage.
After deduction of costs of GBP16.5 million (December 2007: GBP15.3 million)
operating profit was GBP5.8 million (December 2007: GBP3.8 million), a 54.1%
increase on the same period in 2007. The resultant conversion ratio has
increased to 26.1% (2007: 19.8%).
US Staffing
This segment, which comprises all of Impellam's North American interests
consists of: Corestaff (clerical, office and industrial), Guidant (on-site
vendor neutral), S.Com (technical), Specialty Services Group (IT) and SRG Woolf
(scientific). The management of these operations has been brought under a new
country CEO, Jim Boone, who joined the Group in January 2009.
+-----------------------+------------------+----------------+-------------------+
| Year ended 31 | 2008 | 2007 | Growth in local |
| December | | | currency |
+-----------------------+------------------+----------------+-------------------+
| | GBPm | GBPm | % |
+-----------------------+------------------+----------------+-------------------+
| Turnover | 175.8 | 187.8 | (13.2) |
+-----------------------+------------------+----------------+-------------------+
| Gross profit | 35.9 | 37.7 | (11.7) |
+-----------------------+------------------+----------------+-------------------+
| Administrative | 35.2 | 33.0 | (1.3) |
| expenses | | | |
+-----------------------+------------------+----------------+-------------------+
| EBIT** | 0.7 | 4.7 | (85.6) |
+-----------------------+------------------+----------------+-------------------+
| Gross profit | 20.4% | 20.1% | |
| percentage | | | |
+-----------------------+------------------+----------------+-------------------+
| EBITDA return on sale | 0.9% | 2.9% | |
| % | | | |
+-----------------------+------------------+----------------+-------------------+
| Conversion ratio | 2.0% | 12.3% | |
| (EBIT as a % of Gross | | | |
| Profit) | | | |
+-----------------------+------------------+----------------+-------------------+
| Permanent fees % GP | 6.2% | 5.6% | |
+-----------------------+------------------+----------------+-------------------+
** before exceptional items and the amortisation of intangible assets
Overall turnover in the segment reduced 13.2%, as measured in local currency, to
GBP175.8 million in 2008 (December 2007: GBP187.8 million) with gross profit
reducing 11.7%, as measured in local currency, to GBP35.9 million (December
2007: GBP37.7million).
These reductions, which started in quarter two and became increasingly
pronounced in quarter four, reflect the impact of the continued weakness in the
US economy which has principally been felt by the more traditional Corestaff
businesses. Consistent with trends seen all year, whilst we did not experience
contract losses and we continued to win new business, our existing client base
progressively reduced the volume of its temporary staffing requirements in
response to weakness in their own market places. Only our Guidant business,
which principally serves the more resilient utility sector, has seen an increase
in gross profit. This change in mix together with an increase in permanent
placements which accounted for 6.2% of gross profit (2007: 5.6%) is reflected in
our gross profit margin percentage which improved to 20.4% (December 2007:
20.1%).
Administrative costs decreased by 1.3%, as measured in local currency, as we
continued to review and adjust our cost base in response to the reductions in
volume which we saw in the year. Changes made in quarter four mean that the
cost base of this business segment, on an annualised basis as measured in local
currency, was approximately 15% lower entering 2009 than it was entering
2008.Underlying operating profit of the segment reduced to GBP0.7 million (2007:
GBP4.7 million). The conversion ratio was 2.0% (2007: 12.3%).
Our new CEO is undertaking a review of the organisation structure of the
business in order to better position it for the increasingly difficult market
conditions expected in the future, through significantly reducing its cost base
whilst retaining its geographic and market sector coverage. The costs of this
reorganisation will be taken in the first half of 2009.
Support services
The Support services segment, which is entirely UK based, comprises the Carlisle
(cleaning and security), Comensura (vendor neutral procurement) and the Recruit
(retail merchandising and events) businesses.
Accounting irregularities dating back to the start of 2007 have been identified,
post merger, in respect of Recruit Event Services Limited. This business
provides stewarding and ancillary services to sporting and entertainment venues
in the UK. These irregularities relate to the overstatement of revenues and
associated billed and unbilled receivables over a sustained period. The
circumstances around the overstatement have been independently investigated and
the business restructured and reorganised under new senior management and
increased central control is being introduced. The investigation is complete and
provisions amounting to GBP6.5 million have been made against revenues and
associated billed and unbilled receivables of which GBP2.4 million falls in the
pro forma period to 31 December 2007.
On 28 May 2008 the Group sold its 50% interest in a loss making manned guarding
security joint venture in Ireland, Carlisle Security Plus, for a nominal
consideration to the joint venture partner. The loss on disposal amounted to
GBP0.6 million.
+-----------------------+------------------+----------------+------------------+
| Year ended 31 | 2008 | 2007 | Growth |
| December | | | |
+-----------------------+------------------+----------------+------------------+
| | GBPm | GBPm | % |
+-----------------------+------------------+----------------+------------------+
| Turnover | 116.9 | 119.3 | (2.0) |
+-----------------------+------------------+----------------+------------------+
| Net fee income | 21.3 | 22.6 | (5.9) |
+-----------------------+------------------+----------------+------------------+
| Administrative | 19.9 | 19.1 | 4.3 |
| expenses | | | |
+-----------------------+------------------+----------------+------------------+
| EBIT** | 1.4 | 3.5 | (60.8) |
+-----------------------+------------------+----------------+------------------+
| Gross profit | 18.2% | 19.0% | |
| percentage | | | |
+-----------------------+------------------+----------------+------------------+
| EBITDA return on sale | 1.7% | 3.3% | |
| % | | | |
+-----------------------+------------------+----------------+------------------+
| Conversion ratio | 6.5% | 15.7% | |
| (EBIT as a % of Gross | | | |
| Profit) | | | |
+-----------------------+------------------+----------------+------------------+
** before exceptional items and the amortisation of intangible assets
Overall turnover for the segment was slightly down at GBP116.9 million in 2008
(December 2007: GBP119.3 million). There were a number of contract wins in the
year. Our cleaning business was successful in winning new business at a number
of UK airports creating a successful new sector for that business although
profitability took some time to come through due to start up costs. Comensura
has also added a number of new clients, both in the private and public sectors
during the year as well as successfully renewing the majority of its existing
contracts. It was also successful in winning its first contract in Australia
which went live at the start of 2009. Only in the retail merchandising business
did we see a reduction in turnover as a direct result of weakness in the UK
retail sector as consumers limit spending. As noted above, accounting
irregularities in the Events business also adversely impacted 2008 earnings. Net
fee income reduced by 5.9% to GBP21.3 million (December 2007: GBP22.6 million)
with the gross profit percentage dropping to 18.2% (December 2007: 19.0%).
Administrative costs in this segment increased by 4.3% to GBP19.9 million
(December 2007: GBP19.1 million) reflecting planned up front investments in
Comensura and Cleaning to support new business. Accordingly, operating profit
has decreased to GBP1.4 million (December 2007: GBP3.5 million). The conversion
ratio is 6.5% (2007: 15.7%).
Board
The Board of Impellam underwent a number of changes during the period. Cheryl
Jones joined the Board in August 2008, initially as a Non-executive Director and
then in November 2008 took over as Chairman from Kevin Mahoney who stepped down
to be a Non-executive Director. John Rowley also became a Non-executive Director
in October 2008 having previously been Group Development Director. Richard
Bradford and Adrian Carey both left the Board in July 2008, the former stepping
down as Chief Operating Officer, and the latter as a Non-executive Director.
Following these changes the Board is now confident that it has the necessary
people in place with the requisite skills to deliver on the Group's strategy.
Current Group trading and prospects
Trading in the first quarter of the year has been in line with the Board's
expectations. Whilst revenues are below the prior year, particularly in
permanent placements and, to a lesser extent temporary placements the actions
that have been taken to reduce the cost base mean that operating profit for the
first quarter is in line with the same period last year.
Whilst visibility of revenues is limited in any recruitment business, the Board
believes that the breadth of the Impellam portfolio provides the Group with a
degree of trading resilience. In addition, the reductions in the cost base, both
as a result of the merger and subsequent actions, which have been achieved to
date and which will be enacted in the first half, will provide some further
protection to earnings if trading weakens further.
Desmond Doyle
Chief Executive Officer
8 May 2009
+--------------------------------------------------+--------+------------+------------+
| Consolidated income statement | | Unaudited |
| For the year ended 31 December 2008 | | Pro forma basis |
+--------------------------------------------------+--------+-------------------------+
| | | 12 months | 12 months |
+--------------------------------------------------+--------+------------+------------+
| | | 2008 | 2007 |
+--------------------------------------------------+--------+------------+------------+
| | Notes | GBP m | GBP m |
+--------------------------------------------------+--------+------------+------------+
| Continuing operations | | | |
+--------------------------------------------------+--------+------------+------------+
| Revenue | 2 | 1,070.0 | 975.3 |
+--------------------------------------------------+--------+------------+------------+
| Cost of sales | | (880.4) | (789.0) |
+--------------------------------------------------+--------+------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--------+------------+------------+
| Gross profit | | 189.6 | 186.3 |
+--------------------------------------------------+--------+------------+------------+
| Administrative expenses (including exceptional | | (192.0) | (189.7) |
| items) | | | |
+--------------------------------------------------+--------+------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--------+------------+------------+
| Operating loss | 2 | (2.4) | (3.4) |
+--------------------------------------------------+--------+------------+------------+
| Operating profit before amortisation and | | 11.9 | 15.5 |
| exceptional items | | | |
+--------------------------------------------------+--------+------------+------------+
| Amortisation of customer relationships | | (2.7) | - |
+--------------------------------------------------+--------+------------+------------+
| Exceptional items | 3 | (11.6) | (18.9) |
+--------------------------------------------------+--------+------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--------+------------+------------+
| Operating loss | | (2.4) | (3.4) |
+--------------------------------------------------+--------+------------+------------+
| Finance income | 4 | 0.5 | 0.5 |
+--------------------------------------------------+--------+------------+------------+
| Finance expense | 4 | (5.7) | (6.2) |
+--------------------------------------------------+--------+------------+------------+
| Exceptional finance expense | 3 | (0.4) | (0.9) |
+--------------------------------------------------+--------+------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--------+------------+------------+
| Loss before taxation | | (8.0) | (10.0) |
+--------------------------------------------------+--------+------------+------------+
| Taxation | | (1.0) | 1.0 |
+--------------------------------------------------+--------+------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--------+------------+------------+
| Loss for the period | | (9.0) | (9.0) |
+--------------------------------------------------+--------+------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--------+------------+------------+
+--------------------------------------------------+--------+------------+------------+
| (Loss)/earnings per share - basic | 5 | | |
+--------------------------------------------------+--------+------------+------------+
| Unadjusted | | (25.5)p | (25.5)p |
+--------------------------------------------------+--------+------------+------------+
| Adjusted | | 16.1p | 30.5p |
+--------------------------------------------------+--------+------------+------------+
+---------------------------------------------+--------+--------------+--------------+
| Consolidated balance sheet | | Statutory | Unaudited |
| | | | Pro forma |
| | | | basis |
+---------------------------------------------+--------+--------------+--------------+
| At 31 December 2008 | | 31 December | 31 December |
+---------------------------------------------+--------+--------------+--------------+
| | | 2008 | 2007 |
+---------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+---------------------------------------------+--------+--------------+--------------+
| Non-current assets | | | |
+---------------------------------------------+--------+--------------+--------------+
| Property, plant and equipment | | 8.6 | 10.0 |
+---------------------------------------------+--------+--------------+--------------+
| Goodwill | | 59.9 | 83.7 |
+---------------------------------------------+--------+--------------+--------------+
| Other intangible assets | | 55.0 | 3.0 |
+---------------------------------------------+--------+--------------+--------------+
| Deferred tax asset | | 4.0 | 1.3 |
+---------------------------------------------+--------+--------------+--------------+
| Financial assets | | 4.8 | 4.8 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| | | 132.3 | 102.8 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Current assets | | | |
+---------------------------------------------+--------+--------------+--------------+
| Trade and other receivables | | 185.4 | 189.5 |
+---------------------------------------------+--------+--------------+--------------+
| Deferred tax asset | | 0.3 | 0.2 |
+---------------------------------------------+--------+--------------+--------------+
| Cash at hand and in bank | | 11.3 | 8.3 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| | | 197.0 | 198.0 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Total assets | | 329.3 | 300.8 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Current liabilities | | | |
+---------------------------------------------+--------+--------------+--------------+
| Trade and other payables | | 147.5 | 141.2 |
+---------------------------------------------+--------+--------------+--------------+
| Taxation liabilities | | 0.3 | 0.6 |
+---------------------------------------------+--------+--------------+--------------+
| Bank overdrafts and other short-term | | 51.5 | 39.6 |
| borrowings | | | |
+---------------------------------------------+--------+--------------+--------------+
| Derivative financial instruments | | 0.5 | 0.1 |
+---------------------------------------------+--------+--------------+--------------+
| Provisions | | 6.3 | - |
+---------------------------------------------+--------+--------------+--------------+
| Deferred taxation liability | | 1.0 | 2.0 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| | | 207.1 | 183.5 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Net current assets | | (10.1) | 14.5 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Non-current liabilities | | | |
+---------------------------------------------+--------+--------------+--------------+
| Long-term borrowings | | 21.6 | 32.0 |
+---------------------------------------------+--------+--------------+--------------+
| Other liabilities due in greater than 1 | | 2.0 | 1.3 |
| year | | | |
+---------------------------------------------+--------+--------------+--------------+
| Provisions | | 8.4 | 1.2 |
+---------------------------------------------+--------+--------------+--------------+
| Deferred taxation liability | | 15.0 | - |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| | | 47.0 | 34.5 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Total liabilities | | 254.1 | 218.0 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Net assets | | 75.2 | 82.8 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
+---------------------------------------------+--------+--------------+--------------+
| Consolidated cash flow statement | | Unaudited |
| For the year ended 31 December 2008 | | Pro forma |
+---------------------------------------------+--------+-----------------------------+
| | | 12 months | 12 months |
+---------------------------------------------+--------+--------------+--------------+
| | | 2008 | 2007 |
+---------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+---------------------------------------------+--------+--------------+--------------+
| Cash flows from operating activities | | | |
+---------------------------------------------+--------+--------------+--------------+
| Loss before taxation | | (8.0) | (10.0) |
+---------------------------------------------+--------+--------------+--------------+
| Adjustments for non-cash items: | | | |
+---------------------------------------------+--------+--------------+--------------+
| Net interest charge | | 5.2 | 5.7 |
+---------------------------------------------+--------+--------------+--------------+
| Exceptional finance expense | | 0.4 | 0.9 |
+---------------------------------------------+--------+--------------+--------------+
| Depreciation of property, plant and | | 3.7 | 3.1 |
| equipment | | | |
+---------------------------------------------+--------+--------------+--------------+
| Amortisation of licences | | 1.4 | 1.6 |
+---------------------------------------------+--------+--------------+--------------+
| Impairment of goodwill | | - | 19.1 |
+---------------------------------------------+--------+--------------+--------------+
| Amortisation of customer relationships | | 2.7 | - |
+---------------------------------------------+--------+--------------+--------------+
| Loss/(profit) on disposal of subsidiary | | 0.6 | (0.2) |
+---------------------------------------------+--------+--------------+--------------+
| Loss on disposal of property, plant and | | 0.6 | - |
| equipment | | | |
+---------------------------------------------+--------+--------------+--------------+
| Share based payment charge | | 0.1 | 0.4 |
+---------------------------------------------+--------+--------------+--------------+
| Loss/(gain) on disposal of investments | | 0.1 | (0.1) |
+---------------------------------------------+--------+--------------+--------------+
| Non-cash impact of exceptional items | | 2.3 | - |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| | | 9.1 | 20.5 |
+---------------------------------------------+--------+--------------+--------------+
| Increase/(decrease) in trade and other | | 16.7 | (32.4) |
| receivables | | | |
+---------------------------------------------+--------+--------------+--------------+
| (Decrease)/increase in trade and other | | (6.8) | 27.3 |
| payables | | | |
+---------------------------------------------+--------+--------------+--------------+
| Decrease in provisions | | (1.0) | (1.1) |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Cash generated by operations | | 18.0 | 14.3 |
+---------------------------------------------+--------+--------------+--------------+
| Taxation paid | | (0.6) | (0.6) |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Net cash generated by operating activities | 17.4 | 13.7 |
+------------------------------------------------------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Cash flows from investing activities | | | |
+---------------------------------------------+--------+--------------+--------------+
| Costs associated with acquisition of CSG | (2.5) | - |
+------------------------------------------------------+--------------+--------------+
| Acquisition of subsidiaries (net of cash acquired) | (1.9) | (3.1) |
+------------------------------------------------------+--------------+--------------+
| Purchase of property, plant and equipment | | (3.8) | (3.6) |
+---------------------------------------------+--------+--------------+--------------+
| Purchase of intangible assets | | (2.4) | (1.6) |
+---------------------------------------------+--------+--------------+--------------+
| Proceeds from sale of property, plant and | | - | 0.1 |
| equipment | | | |
+---------------------------------------------+--------+--------------+--------------+
| Proceeds from sale of subsidiary | | - | 0.4 |
+---------------------------------------------+--------+--------------+--------------+
| Decrease in other financial assets | | 0.4 | 0.2 |
+---------------------------------------------+--------+--------------+--------------+
| Finance income received | | 0.4 | 0.3 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Net cash utilised on investing activities | | (9.8) | (7.3) |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
+---------------------------------------------+--------+--------------+--------------+
| Consolidated cash flow statement | | Unaudited |
| For the year ended 31 December 2008 | | Pro forma |
+---------------------------------------------+--------+-----------------------------+
| | | 12 months | 12 months |
+---------------------------------------------+--------+--------------+--------------+
| | | 2008 | 2007 |
+---------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+---------------------------------------------+--------+--------------+--------------+
| Cash flows from financing activities | | | |
+---------------------------------------------+--------+--------------+--------------+
| Purchase of own shares | | - | (0.3) |
+---------------------------------------------+--------+--------------+--------------+
| Net movement in other long-term borrowings | | (10.9) | (2.4) |
+---------------------------------------------+--------+--------------+--------------+
| Net movement in short-term borrowings | | 10.8 | 6.4 |
+---------------------------------------------+--------+--------------+--------------+
| Capital element of finance lease payments | | (0.2) | (0.3) |
+---------------------------------------------+--------+--------------+--------------+
| Finance expense paid | | (4.8) | (5.6) |
+---------------------------------------------+--------+--------------+--------------+
| Exceptional finance expense | | - | (0.8) |
+---------------------------------------------+--------+--------------+--------------+
| Dividends | | (4.0) | (3.0) |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Net cash outflow from financing activities | (9.1) | (6.0) |
+------------------------------------------------------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| | | | |
+---------------------------------------------+--------+--------------+--------------+
| Net (outflow)/inflow in cash and cash | | (1.5) | 0.4 |
| equivalents | | | |
+---------------------------------------------+--------+--------------+--------------+
| Opening cash and cash equivalents | | 5.9 | 5.5 |
+---------------------------------------------+--------+--------------+--------------+
| Foreign exchange gains on cash and cash equivalents | 4.2 | - |
+------------------------------------------------------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
| Closing cash and cash equivalents | | 8.6 | 5.9 |
+---------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+---------------------------------------------+--------+--------------+--------------+
Notes to the consolidated financial statements - pro forma
For the year ended 31 December 2008
1 Pro forma information
In order to enable a more meaningful comparison to be made the Directors have
included certain unaudited pro forma financial information and have commented on
these pro forma results. This incorporates unaudited pro forma income statement,
balance sheet and cash flow information for Impellam as if the merger of
Carlisle and CSG had taken place on 1 January 2007 rather than in May 2008.
The unaudited pro forma results and cashflows in this section therefore reflect
the results of Impellam, Carlisle and CSG as though they merged on 1 January
2007. The comparatives have been shown on a similar basis.
This treatment does not reflect the requirements of IAS 1, Presentation of
Financial Statements, IAS 27, Consolidated and Separate Financial Statements and
IFRS 3, Business Combinations and have been included in addition to the
statutory information prepared in accordance with the note above.
The unaudited pro forma financial information has been prepared for illustrative
purposes only, through the aggregation of statutory and internal management
financial information of Carlisle and CSG which has otherwise been prepared in
accordance with IFRS. It has not been designed to, and nor does it, give a
presentation of the income statement and balance sheet of the Group that would
have been reported in accordance with IFRS had the combination actually taken
place on 1 January 2007.
The current year financial information presented in the income statement and
cash flow statement represents the full twelve month period from 1 January 2008
to 31 December 2008 for the combined businesses, the comparative financial
information similarly represents the twelve month period from 1 January 2007 to
31 December 2007 for the combined businesses, all as if the business
combinations had taken place on 1 January 2007.
2 Segment information
Geographic segments
Year ended 31 December 2008
+------------------------------+-----------+-----------+------------+-----------+----------+
| | Unaudited - Pro forma basis |
+------------------------------+-----------------------------------------------------------+
| Continuing operations | United | United | Operations | Corporate | Group |
| | Kingdom & | States | Total | costs | Total |
| | Europe | | | - UK | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | GBP m | GBP m | GBP m | GBP m | GBP m |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment revenue | 894.2 | 175.8 | 1,070.0 | - | 1,070.0 |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Result | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment result before | 19.9 | 1.5 | 21.4 | (4.9) | 16.5 |
| depreciation, amortisation | | | | | |
| and exceptional items | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Depreciation * | (2.8) | (0.4) | (3.2) | - | (3.2) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Amortisation of software | (1.0) | (0.4) | (1.4) | - | (1.4) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment result / operating | 16.1 | 0.7 | 16.8 | (4.9) | 11.9 |
| profit/(loss) before | | | | | |
| amortisation and exceptional | | | | | |
| items | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Amortisation of customer | (1.3) | (1.4) | (2.7) | - | (2.7) |
| relationships | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Exceptional items | (5.7) | (0.4) | (6.1) | (5.5) | (11.6) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment result / | 9.1 | (1.1) | 8.0 | (10.4) | (2.4) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Finance costs - net | | | | | (5.2) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Exceptional finance expense | | | | (0.4) |
+------------------------------------------+-----------+------------+-----------+----------+
| | | | | | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Loss before taxation | | | | | (8.0) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Taxation | | | | (1.0) |
+------------------------------------------+-----------+------------+-----------+----------+
| | | | | | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Loss for the year | | | | (9.0) |
+------------------------------------------+-----------+------------+-----------+----------+
| | | | | | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
* a further GBP0.5 million depreciation charge relating to the UK support
services business is charged above the line in cost of sales
Year ended 31 December 2007
+------------------------------+-----------+-----------+------------+-----------+----------+
| | Unaudited - Pro forma basis |
+------------------------------+-----------------------------------------------------------+
| | United | United | Operations | Corporate | Group |
| | Kingdom | States | Total | costs | Total |
| | | | | - UK | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | GBP m | GBP m | GBP m | GBP m | GBP m |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment revenue | 787.5 | 187.8 | 975.3 | - | 975.3 |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Result | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment result before | 20.3 | 5.4 | 25.7 | (5.8) | 19.9 |
| depreciation, amortisation | | | | | |
| and exceptional items | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Depreciation * | (2.5) | (0.3) | (2.8) | - | (2.8) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Amortisation of software | (1.2) | (0.4) | (1.6) | - | (1.6) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment result / operating | 16.6 | 4.7 | 21.3 | (5.8) | 15.5 |
| profit/(loss) before | | | | | |
| amortisation and exceptional | | | | | |
| items | | | | | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Exceptional items | 0.2 | - | 0.2 | (19.1) | (18.9) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Segment result / | 16.8 | 4.7 | 21.5 | (24.9) | (3.4) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | _______ | _______ | _______ | _______ | |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Finance costs - net | | | | | (5.7) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Exceptional finance expense | | | | (0.9) |
+------------------------------------------+-----------+------------+-----------+----------+
| | | | | | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Loss before taxation | | | | | (10.0) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Taxation | | | | | 1.0 |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | | | | | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
| Loss for the year | | | | | (9.0) |
+------------------------------+-----------+-----------+------------+-----------+----------+
| | | | | | _______ |
+------------------------------+-----------+-----------+------------+-----------+----------+
a further GBP0.3 million depreciation charge relating to the UK support services
business is charged above the line in cost of sales
Business segments
Continuing operations
Year ended 31 December 2008
+----------------------------+------------+--------------+-------------+------------+----------+
| | Unaudited - Pro forma basis |
+----------------------------+-----------------------------------------------------------------+
| | Commercial | Professional | Healthcare | Support | Group |
| | staffing | & technical | staffing | services | Total |
| | | staffing | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | GBP m | GBP m | GBP m | GBP m | GBP m |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment revenue | 632.1 | 177.1 | 143.9 | 116.9 | 1,070.0 |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Result | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment result before | 10.3 | 3.0 | 6.1 | 2.0 | 21.4 |
| depreciation, amortisation | | | | | |
| and exceptional items | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Depreciation * | (1.7) | (0.8) | (0.1) | (0.6) | (3.2) |
+----------------------------+------------+--------------+-------------+------------+----------+
| Amortisation of | (1.1) | (0.1) | (0.2) | - | (1.4) |
| software | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment result / | 7.5 | 2.1 | 5.8 | 1.4 | 16.8 |
+----------------------------+------------+--------------+-------------+------------+----------+
| Amortisation of | (2.2) | - | (0.3) | (0.2) | (2.7) |
| customer relationships | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Exceptional items | (5.3) | (0.2) | (0.2) | (0.4) | (6.1) |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment result / | - | 1.9 | 5.3 | 0.8 | 8.0 |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Unallocated - | | | | | (4.9) |
| corporate cost | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Unallocated - | | | | | (5.5) |
| exceptional items | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | | | | | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Operating loss | | | | | (2.4) |
+----------------------------+------------+--------------+-------------+------------+----------+
| | | | | | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
* a further GBP0.5 million depreciation charge relating to the UK support
services business is charged above the line in cost of sales
Year ended 31 December 2007
+----------------------------+------------+--------------+-------------+------------+----------+
| | Unaudited - Pro forma basis |
+----------------------------+-----------------------------------------------------------------+
| | Commercial | Professional | Healthcare | Support | Group |
| | staffing | & technical | staffing | services | Total |
| | | staffing | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | GBP m | GBP m | GBP m | GBP m | GBP m |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment revenue | 594.5 | 151.4 | 110.1 | 119.3 | 975.3 |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Result | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment result before | 13.9 | 3.8 | 4.1 | 3.9 | 25.7 |
| depreciation, amortisation | | | | | |
| and exceptional items | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Depreciation * | (1.5) | (0.7) | (0.2) | (0.4) | (2.8) |
+----------------------------+------------+--------------+-------------+------------+----------+
| Amortisation of | (1.4) | (0.1) | (0.1) | - | (1.6) |
| software | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment result / | 11.0 | 3.0 | 3.8 | 3.5 | 21.3 |
| operating profit | | | | | |
| before exceptional | | | | | |
| items | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Exceptional items | - | - | 0.2 | - | 0.2 |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Segment result / ting | 11.0 | 3.0 | 4.0 | 3.5 | 21.5 |
| profit | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | _______ | _______ | _______ | _______ | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Unallocated - | | | | | (5.8) |
| corporate cost | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| Exceptional - | | | | | (19.1) |
| corporate cost | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
| | | | | | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| Operating loss | | | | | (3.4) |
+----------------------------+------------+--------------+-------------+------------+----------+
| | | | | | _______ |
+----------------------------+------------+--------------+-------------+------------+----------+
| | | | | | |
+----------------------------+------------+--------------+-------------+------------+----------+
* a further GBP0.3 million depreciation charge relating to the UK support
services business is charged above the line in cost of sales
3 Exceptional items
+---------------------------------------------------------+------------+------------+
| | Unaudited |
| | Pro forma |
+---------------------------------------------------------+-------------------------+
| | Year ended 31 December |
+---------------------------------------------------------+-------------------------+
| | 12 months | 12 months |
+---------------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+---------------------------------------------------------+------------+------------+
| | GBPm | GBPm |
+---------------------------------------------------------+------------+------------+
| Impairment of goodwill | - | 19.1 |
+---------------------------------------------------------+------------+------------+
| Cost associated with the merger | 2.8 | - |
+---------------------------------------------------------+------------+------------+
| Loss/(profit) on disposal of subsidiary | 0.6 | (0.2) |
+---------------------------------------------------------+------------+------------+
| Restructuring and other costs | 8.1 | - |
+---------------------------------------------------------+------------+------------+
| Investments written off | 0.1 | - |
+---------------------------------------------------------+------------+------------+
| | ____ | ____ |
+---------------------------------------------------------+------------+------------+
| Total exceptional items included in operating profit | 11.6 | 18.9 |
+---------------------------------------------------------+------------+------------+
| Financing expenses written off on merger | 0.4 | - |
+---------------------------------------------------------+------------+------------+
| Financing expense on early redemption of loan notes | - | 0.9 |
+---------------------------------------------------------+------------+------------+
| | ____ | ____ |
+---------------------------------------------------------+------------+------------+
| Total exceptional items | 12.0 | 19.8 |
+---------------------------------------------------------+------------+------------+
| Taxation | - | - |
+---------------------------------------------------------+------------+------------+
| | ____ | ____ |
+---------------------------------------------------------+------------+------------+
| Total exceptional items | 12.0 | 19.8 |
+---------------------------------------------------------+------------+------------+
| | ____ | ____ |
+---------------------------------------------------------+------------+------------+
An impairment charge of GBP19.1 million was recognised in December 2007's income
statement following a review of The Corporate Services Group plc's US business,
its medium-term economic outlook and increases in the cost of capital.
Costs associated with the merger relate to the various legal and professional
costs incurred by both Carlisle Group Limited and The Corporate Services Group
plc to effect the merger of the two businesses under the name of Impellam Group
plc.
On 28 May 2008 the Group sold its 50% interest in a loss making manned guarding
security joint venture in Ireland, Carlisle Security Plus, for a nominal
consideration to the joint venture partner. The loss on disposal amounted to
GBP0.6 million including costs of disposal and net cash outflow was
GBP0.1million.
In 2007 this relates to the disposal of Euromedica, a pharmaceutical search
business.
Restructure costs relate to reorganisation and redundancy costs following the
combination of the two businesses to form the Impellam Group plc.
The impairment of investment relates to the write down of the carrying value of
the Group's investment in Clear Technology Inc, an unlisted US software
development company.
Finance expenses written off relate to the costs associated with The Corporate
Services Group plc's restructure of debt in 2007 which were being amortised over
the period of the loans and which on replacement by the new arrangements for
Impellam Group plc have been accelerated and written off in full.
On 30 May 2007 The Corporate Services Group plc redeemed GBP15.0 million of its
outstanding GBP35.0 million 10% Guaranteed Loan Notes due 2011. This redemption
was funded by three-year bank term loans and increased borrowings from the
Group's existing senior lenders. The one-off cost attributable to this early
redemption of GBP0.9 million has been shown on a separate line of the
consolidated income statement.
4 Finance income and expense
+----------------------------------------------------------+------------+------------+
| | Unaudited |
| | Pro forma |
+----------------------------------------------------------+-------------------------+
| | Year ended 31 December |
+----------------------------------------------------------+-------------------------+
| | 2008 | 2007 |
+----------------------------------------------------------+------------+------------+
| | GBP m | GBP m |
+----------------------------------------------------------+------------+------------+
| Total interest income for financial assets not at fair | 0.4 | 0.4 |
| value through the income statement - bank interest | | |
| receivable | | |
+----------------------------------------------------------+------------+------------+
| Net foreign exchange gains on monetary assets and | 0.1 | - |
| liabilities | | |
+----------------------------------------------------------+------------+------------+
| Unrealised gain on investments designated as held at | - | 0.1 |
| fair value through the income statement | | |
+----------------------------------------------------------+------------+------------+
| | _________ | _________ |
+----------------------------------------------------------+------------+------------+
| Finance income | 0.5 | 0.5 |
+----------------------------------------------------------+------------+------------+
| | _________ | _________ |
+----------------------------------------------------------+------------+------------+
+----------------------------------------------------------+------------+------------+
| | Unaudited |
| | Pro forma |
+----------------------------------------------------------+-------------------------+
| | Year ended 31 December |
+----------------------------------------------------------+-------------------------+
| | 2008 | 2007 |
+----------------------------------------------------------+------------+------------+
| | GBP m | GBP m |
+----------------------------------------------------------+------------+------------+
| Loan notes | 2.0 | 2.6 |
+----------------------------------------------------------+------------+------------+
| Revolving credit facilities | 2.5 | 2.5 |
+----------------------------------------------------------+------------+------------+
| Finance charges payable under finance lease contracts | 0.1 | 0.1 |
+----------------------------------------------------------+------------+------------+
| Bank loans and overdrafts | 0.2 | 0.5 |
+----------------------------------------------------------+------------+------------+
| Other interest payable | - | 0.2 |
+----------------------------------------------------------+------------+------------+
| | _________ | _________ |
+----------------------------------------------------------+------------+------------+
| Total interest payable for financial liabilities not at | 4.8 | 5.9 |
| fair value through the income statement | | |
+----------------------------------------------------------+------------+------------+
| Unwinding of discount on provisions | 0.4 | 0.2 |
+----------------------------------------------------------+------------+------------+
| Fair value charge on derivative financial instruments | 0.5 | 0.1 |
| classified as held for trading | | |
+----------------------------------------------------------+------------+------------+
| | _________ | _________ |
+----------------------------------------------------------+------------+------------+
| Finance expense | 5.7 | 6.2 |
+----------------------------------------------------------+------------+------------+
| | _________ | _________ |
+----------------------------------------------------------+------------+------------+
5 Earnings/(loss) per share
Basic earnings per share amounts are calculated by dividing the profit for the
year attributable to the equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year.
The weighted average number of shares in 2008 from incorporation to 31 December
2008 is 35,348,930 excluding the shares owned by the Corporate Services Group
plc Employee Share Trust.
The calculations of (loss)/earnings per share are based upon the following
consolidated income statement data:
+------------------------------------+------------+------------+-------------+-------------+
| | Unaudited - Pro forma |
+------------------------------------+-----------------------------------------------------+
| | (Loss)/profit for the |(Loss)/earnings per share |
| | year | |
+------------------------------------+-------------------------+---------------------------+
| | Year ended 31 December | Year ended 31 December |
+------------------------------------+-------------------------+---------------------------+
| | 2008 | 2007 | 2008 | 2007 |
+------------------------------------+------------+------------+-------------+-------------+
| | GBP m | GBP m | Pence | Pence |
+------------------------------------+------------+------------+-------------+-------------+
| Basic | | | | |
+------------------------------------+------------+------------+-------------+-------------+
| Loss for the year | (9.0) | (9.0) | (25.5) | (25.5) |
+------------------------------------+------------+------------+-------------+-------------+
| Exceptional items | 12.0 | 19.8 | 34.0 | 56.0 |
+------------------------------------+------------+------------+-------------+-------------+
| Amortisation of customer | 2.7 | - | 7.6 | - |
| relationships | | | | |
+------------------------------------+------------+------------+-------------+-------------+
| | _________ | _________ | _________ | _________ |
+------------------------------------+------------+------------+-------------+-------------+
| Adjusted profit for the year | 5.7 | 10.8 | 16.1 | 30.5 |
+------------------------------------+------------+------------+-------------+-------------+
| | _________ | _________ | _________ | _________ |
+------------------------------------+------------+------------+-------------+-------------+
6 Net Debt
+------------------------+-------------+-------------+-----------+------------+--------------+
| | Unaudited - Pro forma |
+------------------------+-------------------------------------------------------------------+
| | 1 January | Cash flow | Foreign | Other | 31December |
| | 2008 | | exchange | non-cash | 2008 |
| | | | | changes | |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | GBP m | GBP m | GBP m | GBP m | GBP m |
+------------------------+-------------+-------------+-----------+------------+--------------+
| Cash at bank and | 8.3 | (1.2) | 4.2 | - | 11.3 |
| short-term deposits | | | | | |
+------------------------+-------------+-------------+-----------+------------+--------------+
| Bank overdrafts | (2.4) | (0.3) | - | - | (2.7) |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | __________ | __________ | _________ | __________ | __________ |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | 5.9 | (1.5) | 4.2 | - | 8.6 |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | __________ | __________ | _________ | __________ | __________ |
+------------------------+-------------+-------------+-----------+------------+--------------+
| Guaranteed secured | (19.8) | - | - | (0.1) | (19.9) |
| loan note | | | | | |
+------------------------+-------------+-------------+-----------+------------+--------------+
| Bank loans | (12.8) | 10.9 | (0.8) | - | (2.7) |
+------------------------+-------------+-------------+-----------+------------+--------------+
| Finance leases | (0.4) | 0.2 | - | (0.3) | (0.5) |
+------------------------+-------------+-------------+-----------+------------+--------------+
| Revolving credit | (36.2) | (10.8) | (0.3) | - | (47.3) |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | __________ | __________ | _________ | __________ | __________ |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | (69.2) | 0.3 | (1.1) | (0.4) | (70.4) |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | __________ | __________ | _________ | _________ | __________ |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | (63.3) | (1.2) | 3.1 | (0.4) | (61.8) |
+------------------------+-------------+-------------+-----------+------------+--------------+
| | __________ | __________ | _________ | __________ | __________ |
+------------------------+-------------+-------------+-----------+------------+--------------+
Non-cash movements
Non-cash movements include GBP0.1 million (2007: GBP0.4 million) relating to the
amortisation of issue costs relating to the loan notes and bank term loans (2007
including accelerated amortisation of the GBP15 million loan note redemption)
and GBP0.3 million relating to the inception of new finance leases on the
acquisition of fixtures and fittings during the year.
+----------------------------------------------+--------+--------------+--------------+
| Consolidated income statement | | Statutory basis |
| For the period ended | | |
| 31 December 2008 | | |
+----------------------------------------------+--------+-----------------------------+
| | | * Period | Unaudited |
| | | ended 31 | Year ended |
| | | December | 31 March |
+----------------------------------------------+--------+--------------+--------------+
| | | 2008 | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+----------------------------------------------+--------+--------------+--------------+
| Continuing operations | | | |
+----------------------------------------------+--------+--------------+--------------+
| Revenue | | 755.6 | 403.8 |
+----------------------------------------------+--------+--------------+--------------+
| Cost of sales | | (623.7) | (328.9) |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Gross profit | | 131.9 | 74.9 |
+----------------------------------------------+--------+--------------+--------------+
| Administrative expenses (including | | (135.7) | (72.7) |
| exceptional items) | | | |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Operating (loss)/profit | | (3.8) | 2.2 |
+----------------------------------------------+--------+--------------+--------------+
| Operating profit before amortisation and | | 8.8 | 3.8 |
| exceptional items | | | |
+----------------------------------------------+--------+--------------+--------------+
| Amortisation of customer relationships | | (2.7) | - |
+----------------------------------------------+--------+--------------+--------------+
| Exceptional items | | (9.9) | (1.6) |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Operating (loss)/profit | | (3.8) | 2.2 |
+----------------------------------------------+--------+--------------+--------------+
| Finance income | | 0.4 | 0.1 |
+----------------------------------------------+--------+--------------+--------------+
| Finance expense | | (4.4) | (1.1) |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| (Loss)/profit before taxation | | (7.8) | 1.2 |
+----------------------------------------------+--------+--------------+--------------+
| Taxation | | (1.0) | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| (Loss)/profit for the period (attributable to equity | (8.8) | 1.2 |
| holders of the parent Company) | | |
+-------------------------------------------------------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
+----------------------------------------------+--------+--------------+--------------+
| (Loss)/earnings per share - basic | 4 | | |
+----------------------------------------------+--------+--------------+--------------+
| Unadjusted | | (25.0)p | 5.2p |
+----------------------------------------------+--------+--------------+--------------+
| Adjusted | | 10.7p | 12.1p |
+----------------------------------------------+--------+--------------+--------------+
| Earnings/(loss) per share - diluted ** | 4 | | |
+----------------------------------------------+--------+--------------+--------------+
| Unadjusted | | | 5.0p |
+----------------------------------------------+--------+--------------+--------------+
| Adjusted | | | 11.6p |
+----------------------------------------------+--------+--------------+--------------+
* Various periods due to merger and acquisition of underlying businesses see
basis of preparation (note 1).
** At 31 December 2008, as the Group is loss-making for the period, any share
options in issue are considered to be "anti-dilutive" and as such, there is no
separate calculation for diluted earnings per share.
+----------------------------------------------+--------+--------------+--------------+
| Consolidated balance sheet | | Statutory basis |
| At 31 December 2008 | | |
+----------------------------------------------+--------+-----------------------------+
| | | 31 December | Unaudited |
| | | 2008 | 31 March |
| | | | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+----------------------------------------------+--------+--------------+--------------+
| Non-current assets | | | |
+----------------------------------------------+--------+--------------+--------------+
| Property, plant and equipment | | 8.6 | 4.7 |
+----------------------------------------------+--------+--------------+--------------+
| Goodwill | | 59.9 | 57.7 |
+----------------------------------------------+--------+--------------+--------------+
| Other intangible assets | | 55.0 | 1.4 |
+----------------------------------------------+--------+--------------+--------------+
| Deferred tax assets | | 4.0 | 0.3 |
+----------------------------------------------+--------+--------------+--------------+
| Financial assets | | 4.8 | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | 132.3 | 64.1 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Current assets | | | |
+----------------------------------------------+--------+--------------+--------------+
| Trade and other receivables | | 185.4 | 64.0 |
+----------------------------------------------+--------+--------------+--------------+
| Deferred tax assets | | 0.3 | 0.3 |
+----------------------------------------------+--------+--------------+--------------+
| Cash at hand and in bank | | 11.3 | 6.5 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | 197.0 | 70.8 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Total assets | | 329.3 | 134.9 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Current liabilities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Trade and other payables | | 147.5 | 50.3 |
+----------------------------------------------+--------+--------------+--------------+
| Taxation liabilities | | 0.3 | 0.4 |
+----------------------------------------------+--------+--------------+--------------+
| Bank overdrafts and other short-term | | 51.5 | 10.0 |
| borrowings | | | |
+----------------------------------------------+--------+--------------+--------------+
| Other financial liabilities | | 0.5 | - |
+----------------------------------------------+--------+--------------+--------------+
| Provisions | | 6.3 | 0.4 |
+----------------------------------------------+--------+--------------+--------------+
| Deferred taxation liability | | 1.0 | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | 207.1 | 61.1 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Net current (liabilities) / assets | | (10.1) | 9.7 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Non-current liabilities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Long-term borrowings | | 21.6 | 0.1 |
+----------------------------------------------+--------+--------------+--------------+
| Other liabilities due in greater than 1 year | | 2.0 | 1.2 |
+----------------------------------------------+--------+--------------+--------------+
| Provisions | | 8.4 | 1.4 |
+----------------------------------------------+--------+--------------+--------------+
| Deferred taxation liability | | 15.0 | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | 47.0 | 2.7 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Total liabilities | | 254.1 | 63.8 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Net assets | | 75.2 | 71.1 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
+----------------------------------------------+--------+--------------+--------------+
| | | 31 December | Unaudited |
| | | 2008 | 31 March |
| | | | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | Notes | GBP m | GBP m |
+----------------------------------------------+--------+--------------+--------------+
| Equity | | | |
+----------------------------------------------+--------+--------------+--------------+
| Issued share capital | 5 | 0.4 | 2.4 |
+----------------------------------------------+--------+--------------+--------------+
| Share premium account | 5 | 15.5 | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | 15.9 | 2.4 |
+----------------------------------------------+--------+--------------+--------------+
| Other reserves | | 93.1 | 90.0 |
+----------------------------------------------+--------+--------------+--------------+
| Retained deficit | | (34.0) | (21.3) |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Total equity attributable to equity holders | | 75.0 | 71.1 |
| of the parent Company | | | |
+----------------------------------------------+--------+--------------+--------------+
| Minority interest | | 0.2 | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Total equity | | 75.2 | 71.1 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
+----------------------------------------------+--------+--------------+--------------+
| Consolidated cash flow statement | | Statutory basis |
| For the period ended 31 December 2008 | | |
+----------------------------------------------+--------+-----------------------------+
| | | Period ended | Unaudited |
| | | 31 December | Year ended |
| | | | 31 March |
+----------------------------------------------+--------+--------------+--------------+
| | | 2008 | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+----------------------------------------------+--------+--------------+--------------+
| Cash flows from operating activities | | | |
+----------------------------------------------+--------+--------------+--------------+
| (Loss)/profit before taxation | | (7.8) | 1.2 |
+----------------------------------------------+--------+--------------+--------------+
| Adjustments for non-cash items: | | | |
+----------------------------------------------+--------+--------------+--------------+
| Net interest charge | | 4.0 | 1.0 |
+----------------------------------------------+--------+--------------+--------------+
| Exceptional items - non cash | | 2.3 | - |
+----------------------------------------------+--------+--------------+--------------+
| Depreciation of property, plant and | | 2.5 | 1.8 |
| equipment | | | |
+----------------------------------------------+--------+--------------+--------------+
| Impairment of property, plant and equipment | | 0.2 | - |
+----------------------------------------------+--------+--------------+--------------+
| Amortisation of licences and customer | | 3.9 | 0.6 |
| relationships | | | |
+----------------------------------------------+--------+--------------+--------------+
| Loss on disposal of subsidiary | | 0.6 | - |
+----------------------------------------------+--------+--------------+--------------+
| Loss on disposal of property, plant and | | 0.4 | - |
| equipment | | | |
+----------------------------------------------+--------+--------------+--------------+
| Loss on disposal of intangible assets | | 0.1 | - |
+----------------------------------------------+--------+--------------+--------------+
| Share based payment charge/(credit) | | 0.1 | 0.3 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | 6.3 | 4.9 |
+----------------------------------------------+--------+--------------+--------------+
| Decrease/(increase) in trade and other | | 3.0 | (0.7) |
| receivables | | | |
+----------------------------------------------+--------+--------------+--------------+
| (Decrease)/increase in trade and other | | (4.4) | 4.3 |
| payables | | | |
+----------------------------------------------+--------+--------------+--------------+
| Decrease in provisions | | (0.3) | - |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Cash generated by operations | | 4.6 | 8.5 |
+----------------------------------------------+--------+--------------+--------------+
| Taxation paid | | (0.5) | (0.4) |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Net cash generated by operating activities | | 4.1 | 8.1 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Cash flows from investing activities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Acquisition of subsidiary - CSG - net of | | 0.9 | - |
| GBP3.4 million cash acquired | | | |
+----------------------------------------------+--------+--------------+--------------+
| Acquisition of subsidiary - other | | (1.9) | (1.6) |
+----------------------------------------------+--------+--------------+--------------+
| Purchase of property, plant and equipment | | (2.3) | (2.1) |
+----------------------------------------------+--------+--------------+--------------+
| Purchase of intangible assets | | (1.8) | (0.8) |
+----------------------------------------------+--------+--------------+--------------+
| Proceeds from sale of subsidiary (net of | | - | 0.3 |
| cash disposed) | | | |
+----------------------------------------------+--------+--------------+--------------+
| Net movement in other financial assets | | 0.7 | - |
+----------------------------------------------+--------+--------------+--------------+
| Finance income received | | 0.2 | 0.1 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Net cash utilised on investing activities | | (4.2) | (4.1) |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
Consolidated cash flow statement (continued)
For the period ended 31 December 2008
+----------------------------------------------+--------+--------------+--------------+
| | | Statutory basis |
+----------------------------------------------+--------+-----------------------------+
| | | Period ended | Unaudited |
| | | 31 December | Year ended |
| | | | 31 March |
+----------------------------------------------+--------+--------------+--------------+
| | | 2008 | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | | GBP m | GBP m |
+----------------------------------------------+--------+--------------+--------------+
| Cash flows from financing activities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Purchase of own shares | | - | (0.1) |
+----------------------------------------------+--------+--------------+--------------+
| Net movement in other long-term borrowings | | (10.7) | - |
+----------------------------------------------+--------+--------------+--------------+
| Net movement in short-term borrowings | | 18.2 | 4.8 |
+----------------------------------------------+--------+--------------+--------------+
| Capital element of finance lease payments | | (0.1) | (0.4) |
+----------------------------------------------+--------+--------------+--------------+
| Finance expense paid | | (3.1) | (1.0) |
+----------------------------------------------+--------+--------------+--------------+
| Dividend in specie via disposal of | | (4.0) | (3.0) |
| subsidiary (note 3) | | | |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Net cash inflow from financing activities | | 0.3 | 0.3 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| | | | |
+----------------------------------------------+--------+--------------+--------------+
| Net increase in cash and cash equivalents | | 0.2 | 4.3 |
+----------------------------------------------+--------+--------------+--------------+
| Opening cash and cash equivalents | | 6.5 | 2.1 |
+----------------------------------------------+--------+--------------+--------------+
| Foreign exchange losses on cash and cash | | 1.9 | 0.1 |
| equivalents | | | |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
| Closing cash and cash equivalents * | | 8.6 | 6.5 |
+----------------------------------------------+--------+--------------+--------------+
| | | _________ | _________ |
+----------------------------------------------+--------+--------------+--------------+
* Unrestricted cash, available to the Group
+------------------------------------+---------+----------+----------+----------+-----------+
| Consolidated statement of changes | Statutory basis |
| in equity | |
| For the period ended 31 December | |
| 2008 | |
+------------------------------------+------------------------------------------------------+
| | Total | Other | Retained | Minority | Total |
| | share | reserves | deficit | interest | equity |
| | capital | (note | | | |
| | and | 27) | | | |
| | share | | | | |
| | premium | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| | GBP m | GBP m | GBP m | GBP m | GBP m |
+------------------------------------+---------+----------+----------+----------+-----------+
| 1 April 2007 | 2.4 | 89.7 | (19.8) | - | 72.3 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Currency translation differences | - | 0.4 | - | - | 0.4 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Total income and expense | - | 0.4 | - | - | 0.4 |
| recognised in equity | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| Profit for the year | - | - | 1.2 | - | 1.2 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Total income and expense for the | - | 0.4 | 1.2 | - | 1.6 |
| year | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| Purchase of own shares | - | (0.1) | - | - | (0.1) |
+------------------------------------+---------+----------+----------+----------+-----------+
| Share based payments | - | - | 0.3 | - | 0.3 |
+------------------------------------+---------+----------+----------+----------+-----------+
| Dividend in specie via disposal of | - | - | (3.0) | - | (3.0) |
| subsidiary | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Total movement in year | - | 0.3 | (1.5) | - | (1.2) |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| 31 March 2008 | 2.4 | 90.0 | (21.3) | - | 71.1 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Currency translation differences | - | 0.9 | - | - | 0.9 |
+------------------------------------+---------+----------+----------+----------+-----------+
| Minority interest on acquisition | - | - | - | 0.2 | 0.2 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Total income and expense | - | 0.9 | - | 0.2 | 1.1 |
| recognised in equity | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| Loss for the period | - | - | (8.8) | - | (8.8) |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Total income and expense for the | - | 0.9 | (8.8) | 0.2 | (7.7) |
| period | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| Reduction of share capital as part | (2.2) | 2.2 | - | - | - |
| of scheme of arrangement and | | | | | |
| merger | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| Shares issued on acquisition of | 15.7 | - | - | - | 15.7 |
| CSG | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| Share based payments | - | - | 0.1 | - | 0.1 |
+------------------------------------+---------+----------+----------+----------+-----------+
| Dividend in specie via disposal of | - | - | (4.0) | - | (4.0) |
| subsidiary (note 3) | | | | | |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| Total movement in period | 13.5 | 3.1 | (12.7) | 0.2 | 4.1 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
| 31 December 2008 | 15.9 | 93.1 | (34.0) | 0.2 | 75.2 |
+------------------------------------+---------+----------+----------+----------+-----------+
| | ______ | ______ | ______ | ______ | ______ |
+------------------------------------+---------+----------+----------+----------+-----------+
1 Basis of preparation
The statutory information within the preliminary announcement for the period
ended 31 December 2008 has been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union. Details of the
accounting policies applied will be set out in Impellam Group plc's 2008 Annual
Report. The annual financial information presented in this preliminary
announcement for the period ended 31 December 2008 is based on, and is
consistent with, that in the Group's audited financial statements for the period
ended 31 December 2008, and those financial statements will be delivered to the
Registrar of Companies following the Company's Annual General Meeting. The
independent auditors' report on those financial statements is unqualified and
does not contain any statement under section 237 (2) or (3) of the Companies Act
1985.
The financial statements, and this preliminary statement, of Impellam Group plc
(the Group) for the year ended 31 December 2008 were authorised for issue by the
Board of Directors on 8 May 2008 and the balance sheet was signed on behalf of
the Board by Andrew Burchall.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Impellam Group plc and all of its subsidiaries as at 31 December. The financial
statements of subsidiaries are prepared for the same reporting period as the
parent company. Each company, including the parent, use locally applicable UK
and US generally accepted accounting practice (GAAP) and Companies Act
requirements for the preparation of their individual financial statements.
Adjustments are made to bring these into line with the IFRS policies adopted by
the Group, as required.
Subsidiaries are consolidated from the date on which the Group obtains control
and cease to be consolidated from the date on which the Group ceases its
control.
Statutory information
In May 2008, the current Impellam Group plc ("Impellam") was formed through a
business combination of Carlisle Group Limited ("Carlisle") and The Corporate
Services Group plc ("CSG"). This business combination was effected by the
statutory merger, on 6 May 2008, of the recently incorporated Impellam and
Carlisle under Belize law. As required by entities under common control this is
outside the scope of IFRS3 and the Directors have chosen to apply a policy of
merger accounting for this transaction. This company then acquired, on 7 May
2008, the entire share capital of CSG under a scheme of arrangement.
The statutory financial information comprises the trading of Impellam since its
date of incorporation on 21 February 2008, the trading of the consolidated
Carlisle for the period since it's last published financial statements on 31
March 2008 and the consolidated results of CSG from its date of acquisition, 7
May 2008.
The comparative figures represent the consolidated results of Carlisle, a
company incorporated in Belize under the IBCA which ceased to exist following
the merger with Impellam. Accordingly, the comparative figures for the year
ended 31 March 2008 are unaudited.
2 Business combinations
Carlisle Group Limited
On 6 May 2008, Impellam Group plc ("Impellam") combined with Carlisle Group
Limited ("Carlisle") through a statutory merger under Belize law, in accordance
with Part VII of the IBCA. Impellam is the surviving company resulting from the
merger (Carlisle ceased to exist) and all rights, assets, properties,
obligations and liabilities of Carlisle vested in Impellam.
The Corporate Services Group plc
On 7 May 2008 Impellam Group plc acquired 100% of the share capital of The
Corporate Services Group plc ("CSG"), a public company listed on the London
Stock Exchange. The acquisition of CSG was completed by means of a scheme of
arrangement under section 425 of the Companies Act 1985 and Part 26 of the
Companies Act 2006.
The fair values of the identifiable assets and liabilities of this business at
the date of acquisition and the corresponding carrying amounts immediately prior
to the acquisition were:
+------------------------------------------------------------+-------------+------------+
| | Fair value | Carrying |
| | recognised | value |
| | on | |
| | acquisition | |
+------------------------------------------------------------+-------------+------------+
| | GBPm | GBPm |
+------------------------------------------------------------+-------------+------------+
| Property plant and equipment | 4.3 | 5.8 |
+------------------------------------------------------------+-------------+------------+
| Goodwill | - | 26.2 |
+------------------------------------------------------------+-------------+------------+
| Intangible assets - brand values | 38.5 | - |
+------------------------------------------------------------+-------------+------------+
| Intangible assets - customer relationships | 14.4 | - |
+------------------------------------------------------------+-------------+------------+
| Intangible assets - other | 1.8 | 1.8 |
+------------------------------------------------------------+-------------+------------+
| Financial assets | 4.1 | 4.1 |
+------------------------------------------------------------+-------------+------------+
| Deferred tax assets | 7.8 | 1.9 |
+------------------------------------------------------------+-------------+------------+
| Trade and other receivables | 112.0 | 112.4 |
+------------------------------------------------------------+-------------+------------+
| Cash | 3.4 | 3.4 |
+------------------------------------------------------------+-------------+------------+
| Trade and other payables | (90.7) | (89.5) |
+------------------------------------------------------------+-------------+------------+
| Short term borrowings | (18.7) | (18.7) |
+------------------------------------------------------------+-------------+------------+
| Corporation taxes | (0.1) | (0.1) |
+------------------------------------------------------------+-------------+------------+
| Long-term borrowings | (32.4) | (32.4) |
+------------------------------------------------------------+-------------+------------+
| Provisions | (11.8) | (3.0) |
+------------------------------------------------------------+-------------+------------+
| Deferred tax liability | (14.7) | - |
+------------------------------------------------------------+-------------+------------+
| | _________ | ________ |
+------------------------------------------------------------+-------------+------------+
| Net assets | 17.9 | 11.9 |
+------------------------------------------------------------+-------------+------------+
| | | ________ |
+------------------------------------------------------------+-------------+------------+
| Goodwill arising on acquisition | 0.3 | |
+------------------------------------------------------------+-------------+------------+
| | _________ | |
+------------------------------------------------------------+-------------+------------+
| Total consideration | 18.2 | |
+------------------------------------------------------------+-------------+------------+
| | _________ | |
+------------------------------------------------------------+-------------+------------+
The fair value of Property, plant and equipment has been adjusted to reflect an
alignment in the depreciation policies in the acquired entities.
The goodwill on acquisition has been released as this is now considered to be
within the new intangible assets and the new goodwill of the combined group.
The brand valuations have been calculated by reference to various royalty rates
discounted over a ten year period. These brands are subject to an annual
impairment review rather than regular amortisation.
The fair value of customer relationships have been calculated by viewing the
future revenue streams over the expected period in which the historic
relationships continue and before new relationships are built. These
relationships are being amortised on a reducing balance basis.
The movement of other non-current assets reflect the recognition of individual
deferred tax assets within entities on the acquired group that had not been
previously recognised.
The fair value provisions include various property provisions which were empty
or surplus from the date of acquisition to the end of the relevant lease.
The deferred tax liability reflects the deferred tax on the new intangible
assets which had been recognised as part of this business combination.
The total costs associated with the business combination were GBP2.5 million and
comprised costs directly attributable to the combination:
+------------------------------------------------------------+------------+------------+
| | | GBPm |
+------------------------------------------------------------+------------+------------+
| 21,373,330 Shares issued | | 15.7 |
+------------------------------------------------------------+------------+------------+
| Costs associated with the acquisition (settled in cash) | | 2.5 |
+------------------------------------------------------------+------------+------------+
| | | ________ |
+------------------------------------------------------------+------------+------------+
| | | 18.2 |
+------------------------------------------------------------+------------+------------+
| | | ________ |
+------------------------------------------------------------+------------+------------+
The fair value of the share issued was based on the published share price
(1.46p) immediately prior to the completion of the transaction.
From the date of acquisition CSG has contributed GBP3.5 million profit to the
loss after tax of the Group.
If the combination of Carlisle and CSG had taken place at the beginning of 2008,
the loss after tax of the Group would have been GBP9.0 million and revenue from
continuing operations would have been GBP1,070.0 million.
The goodwill of GBP0.3 million comprises the fair value of expected synergies
which are not separately recognised.
Qantum Recruitment Pty Limited
On 12 December 2008 the Group acquired an 80% interest in an Australian
recruitment business operating in the healthcare sector.
The provisional fair values of the identifiable assets and liabilities of this
business at the date of acquisition and the corresponding carrying amounts
immediately prior to the acquisition were:
+------------------------------------------------------------+-------------+------------+
| | Provisional | Carrying |
| | fair value | value |
| | recognised | |
| | on | |
| | acquisition | |
+------------------------------------------------------------+-------------+------------+
| | GBPm | GBPm |
+------------------------------------------------------------+-------------+------------+
| Property plant and equipment | - | - |
+------------------------------------------------------------+-------------+------------+
| Intangible assets - brand values | 0.9 | - |
+------------------------------------------------------------+-------------+------------+
| Net current assets | 0.3 | 0.3 |
+------------------------------------------------------------+-------------+------------+
| Deferred tax liability | (0.3) | - |
+------------------------------------------------------------+-------------+------------+
| | _________ | ________ |
+------------------------------------------------------------+-------------+------------+
| Net assets | 0.9 | 0.3 |
+------------------------------------------------------------+-------------+------------+
| | | ________ |
+------------------------------------------------------------+-------------+------------+
| Minority interest (20%) | (0.2) | |
+------------------------------------------------------------+-------------+------------+
| Goodwill arising on acquisition | 1.2 | |
+------------------------------------------------------------+-------------+------------+
| | _________ | |
+------------------------------------------------------------+-------------+------------+
| Total consideration | 1.9 | |
+------------------------------------------------------------+-------------+------------+
| | _________ | |
+------------------------------------------------------------+-------------+------------+
This acquisition has had no material impact on the results of the Group in the
year although had the acquisition taken place at the beginning of the 2008 the
Group revenue would have increased by GBP1.0 million.
The goodwill of GBP1.2 million comprises the fair value of the added advantages
of geographical location and other expected synergies which are not separately
recognised.
3 Dividends
In March 2008 Carlisle Group Ltd declared a dividend-in-specie relating to the
financial year to 31 March 2008. This comprised shares in its wholly owned
subsidiary Shellproof Limited, in which Carlisle Group Limited had previously
subscribed for 7,999,999 shares for an aggregate cash subscription price of
GBP4.0 million. This was paid on 4 April 2008.
4(Loss)/earnings per share
Basic (loss)/earnings per share amounts are calculated by dividing the
(loss)/profit for the period attributable to the equity holders of the Company
by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated on the same basis but after
adjusting the denominator for the effects of dilutive options. The only
potentially dilutive shares arise from the share options issued by the Group
under its share-based compensation plans.
The weighted average number of shares in 2008 from incorporation to 31 December
2008 is 35,348,930 (31 March 2008: 23,029,000) excluding the shares owned by the
Corporate Services Group plc Employee Share Trust and treasury shares.
At 31 December 2008, as the Group is loss-making, any share options in issue are
considered to be "anti-dilutive" and as such, there is no separate calculation
for diluted earnings per share.
In March 2008 the weighted average shares for the diluted earnings per share is
adjusted by 1,075,000 potentially dilutive shares resulting in a denominator of
24,104,000.
The calculations of (loss)/earnings per share are based upon the following
consolidated income statement data:
+------------------------------------+------------+------------+-------------+-------------+
| | Statutory basis |
+------------------------------------+-----------------------------------------------------+
| | (Loss)/profit for the |(Loss)/earnings per share |
| | year | |
+------------------------------------+-------------------------+---------------------------+
| | Period | Unaudited | Period | Unaudited |
| | ended 31 | Year ended | ended 31 | Year ended |
| | December | 31 March | December | 31 March |
+------------------------------------+------------+------------+-------------+-------------+
| | 2008 | 2008 | 2008 | 2008 |
+------------------------------------+------------+------------+-------------+-------------+
| | GBP m | GBP m | Pence | Pence |
+------------------------------------+------------+------------+-------------+-------------+
| Basic | | | | |
+------------------------------------+------------+------------+-------------+-------------+
| (Loss)/profit for the year | (8.8) | 1.2 | (25.0) | 5.2 |
+------------------------------------+------------+------------+-------------+-------------+
| Exceptional items | 9.9 | 1.6 | 28.1 | 6.9 |
+------------------------------------+------------+------------+-------------+-------------+
| Amortisation of customer | 2.7 | - | 7.6 | - |
| relationships | | | | |
+------------------------------------+------------+------------+-------------+-------------+
| | _________ | _________ | _________ | _________ |
+------------------------------------+------------+------------+-------------+-------------+
| Adjusted profit for the year | 3.8 | 2.8 | 10.7 | 12.1 |
+------------------------------------+------------+------------+-------------+-------------+
| | _________ | _________ | _________ | _________ |
+------------------------------------+------------+------------+-------------+-------------+
+------------------------------------+------------+------------+-------------+-------------+
| | Statutory basis |
+------------------------------------+-----------------------------------------------------+
| | Profit for the year | Earnings per share |
+------------------------------------+-------------------------+---------------------------+
| | | Unaudited | | Unaudited |
| | | Year ended | | Year ended |
| | | 31 March | | 31 March |
+------------------------------------+------------+------------+-------------+-------------+
| | | 2008 | | 2008 |
+------------------------------------+------------+------------+-------------+-------------+
| | | GBP m | | Pence |
+------------------------------------+------------+------------+-------------+-------------+
| Diluted | | | | |
+------------------------------------+------------+------------+-------------+-------------+
| Profit for the year | | 1.2 | | 5.0 |
+------------------------------------+------------+------------+-------------+-------------+
| Exceptional items | | 1.6 | | 6.6 |
+------------------------------------+------------+------------+-------------+-------------+
| | | _________ | | _________ |
+------------------------------------+------------+------------+-------------+-------------+
| Adjusted profit for the year | | 2.8 | | 11.6 |
+------------------------------------+------------+------------+-------------+-------------+
| | | _________ | | _________ |
+------------------------------------+------------+------------+-------------+-------------+
5 Issued share capital
+----------------------------------------+------------+----------+----------+----------+
| | Statutory basis |
+----------------------------------------+---------------------------------------------+
| | Number of | Issued | Share | Total |
| | issued | share | premium | share |
| | shares | capital | account | capital |
+----------------------------------------+------------+----------+----------+----------+
| | Millions | GBPm | GBPm | GBPm |
+----------------------------------------+------------+----------+----------+----------+
| 1 April 2007 and 1 April 2008 | 24.1 | 2.4 | - | 2.4 |
+----------------------------------------+------------+----------+----------+----------+
| Exercise of options | 0.1 | - | - | - |
+----------------------------------------+------------+----------+----------+----------+
| | ______ | ______ | ______ | ______ |
+----------------------------------------+------------+----------+----------+----------+
| | 24.2 | 2.4 | - | 2.4 |
+----------------------------------------+------------+----------+----------+----------+
| Cancellation of "own shares" | (1.1) | (0.1) | - | (0.1) |
+----------------------------------------+------------+----------+----------+----------+
| | ______ | ______ | ______ | ______ |
+----------------------------------------+------------+----------+----------+----------+
| Shares subject to terms of the merger | 23.1 | 2.3 | - | 2.3 |
+----------------------------------------+------------+----------+----------+----------+
| | ______ | ______ | ______ | ______ |
+----------------------------------------+------------+----------+----------+----------+
| New shares issued on merger | 23.1 | 0.2 | - | 0.2 |
+----------------------------------------+------------+----------+----------+----------+
| Issued pursuant to acquisition (note | 21.4 | 0.2 | 15.5 | 15.7 |
| 2) | | | | |
+----------------------------------------+------------+----------+----------+----------+
| Exercise of options | 0.5 | - | - | - |
+----------------------------------------+------------+----------+----------+----------+
| | ______ | ______ | ______ | ______ |
+----------------------------------------+------------+----------+----------+----------+
| 31 December 2008 | 45.0 | 0.4 | 15.5 | 15.9 |
+----------------------------------------+------------+----------+----------+----------+
| | ______ | ______ | ______ | ______ |
+----------------------------------------+------------+----------+----------+----------+
Carlisle Group Limited
Carlisle Group Limited ("Carlisle") had an authorised share capital of
GBP5,000,000 consisting of 50,000,000 ordinary shares of 10 pence. Its issued
share capital was GBP2,406,666 consisting of 24,066,660 ordinary shares.
During the year ended 31 March 2008, the Group purchased, in the open market,
110,860 of the Group's ordinary shares of 10 pence each for an aggregate cash
consideration of GBP0.1 million. These shares are held in treasury by a
subsidiary undertaking, Carlisle Group Treasury Limited. At 31 March 2008, the
total number of treasury shares held was 1,055,860,000 with a nominal value of
GBP105,586.
During April 2008 a further 137,200 ordinary share were issued by Carlisle upon
the exercise of share options by employees of the company for a total
consideration of GBP5.
On 6 May 2008 the Company merged with Carlisle Group Limited under Belize law on
terms of one Impellam share for each Carlisle share. As part of this transaction
the shares held in "Treasury" were cancelled. The equity value of the difference
between the 10p shares in Carlisle and the 1 penny shares of the Company has
been transferred to other reserves.
Impellam Group plc
The Company "Impellam Group plc" was incorporated on 21 February 2008 with an
authorised share capital of GBP30,049,999 represented by 3,000,000,000 ordinary
shares of one penny each and 49,999 redeemable preference shares of GBP1 each.
On 3 March 2008 100 ordinary shares of 1 penny were allotted and on 4 March 2008
and 49,999 preference shares of GBP1 were allotted.
Both the ordinary and the preference shares were held in "trust" for the
principal shareholder of Carlisle Group Limited until the date of the merger
described below. At the completion of the merger, on 6 May 2008, the preference
shares were redeemed by the Company.
The 100 ordinary shares held in trust were deducted from the number of shares
allotted to the principal shareholder as part of the merger arrangements and
transferred to the beneficial ownership of that shareholder.
The Corporate Services Group plc
On 7 May 2008 the Company acquired the entire share capital of The Corporate
Services Group plc ("CSG") and under the terms of the acquisition agreement the
Company issued 50.4 shares in the Company for each share in CSG. As a result of
this transaction an additional 21,373,330 shares were issued; at the date of
acquisition these shares had a fair value of GBP15,727,351.
Share options
Subsequent to the merger and acquisition movements detailed above, a further
477,952 ordinary shares were issued by the Company upon the exercise of share
options by employees of the Group for consideration of GBP9 in total.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UWVVRKNRVRAR
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