TIDMNWKI
RNS Number : 4046Y
Networkers International PLC
07 September 2009
7 September 2009
NETWORKERS INTERNATIONAL PLC
(AIM: NWKI)
Unaudited Interim Results
for the 6 month period to 30 June 2009
The Board of Networkers International Plc ('Networkers' or 'the Group'), the
AIM-listed international recruitment company, is pleased to announce interim
results for the six months ended 30 June 2009.
Highlights
* Pre-tax profits for the period down by 25.4% to GBP2.20m (2008: GBP2.95m);
* Total net borrowings (including drawdown on invoice discounting facilities) have
been reduced to GBP2.9m (June 2008: GBP17.0m);
* Basic earnings per share down by 26.7% to 1.56p (2008: 2.13p);
* Improvement in gross profit margins to 16.6% (2008: 15.3%);
* Net fee income (gross profit) down by 9.7% to GBP11.48m (2008: GBP12.7m);
* Good cash management together with the proceeds from the disposal of the Middle
East joint venture has resulted in operating cash flows before financing of
GBP8.55m (2008: GBP1.95m);
* Strong balance sheet and good liquidity with net tangible assets of GBP11.0m and
net current assets of GBP11.5m;
* Strategic focus on overseas expansion has seen the mix of international net fee
income increase from 46% to 55% in 6 months; and
* Continued growth within the international markets, with additional office
openings planned for second half of the year.
Commenting on today's results, Spencer Manuel, CEO, said "As expected, the first
half of the year has proved to have been a challenging period; however, I am
pleased to report that our geographical diversification and our higher mix of
contract sales has provided us with some resilience to these difficult market
conditions.
"With net borrowings now reduced to below GBP3m from GBP17m a year ago, together
with our profitable trading, solid balance sheet and strong cash generation, the
Group has a sound platform to continue to operate successfully throughout the
current climate."
Enquiries:
Networkers International 020 8315 9000
Spencer Manuel, CEO
Jon
Plassard, CFO
www.networkersint.com
Seymour Pierce Limited 020 7107 8000
Richard Feigen
Catherine Leftley
Bishopsgate Communications Ltd 020 7562 3350
Maxine Barnes
Gemma O'Hara
Networkers International Plc
Chief Executive Officer's Report
I am pleased to report on our Interim Results for the six month period to 30
June 2009. As expected, and as with a number of our peers in the staffing
sector, the first half of 2009 has proved to be a challenging trading period for
the Group. However, despite the difficult global market conditions, the Group
has achieved a profit before tax of GBP2.20m (2008: GBP2.95m).
I am also pleased to report that during the period we have successfully
generated over GBP8.5m in cash from operating and investing activities. This has
been achieved through improved cash management, a lower working capital
requirement and the proceeds from the disposal of our joint venture. This has
reduced the Group's net borrowings to GBP2.9m (June 2008: GBP17m).
Net fee income (gross margin)
We continue to increase our focus on higher margin recruitment activities and to
increase our presence in international markets. As a result of this strategy,
our overall gross margin percentage has increased to 16.6% (2008: 15.3%) and our
International business now accounts for 55% of our net fee income compared to
41% a year ago. Due to overall weaker market conditions, we have seen a 9.7%
reduction in total net fee income.
As a result of our geographical diversification, the Group's contracting
division (representing 87% of net fee income) continues to show some resilience
to market conditions with a 3% decline compared to the first six months of 2008.
We are maintaining gross margin percentages in all our key business streams and
as a result of improvements to our sales mix, overall contracting margins have
increased to 14.7% (2008: 12.7%).
Our permanent division (13% of net fee income), has fared less well with a
36% reduction. With approximately 70% of our permanent division servicing
clients within the UK, the overall weakness in the UK jobs market has had a
negative impact on placements. Our International permanent recruitment division
continues to perform well and, whilst a relatively recent addition to our
offerings, has doubled its revenue compared to the corresponding period.
Profit from operations
Our conversion ratio (the ratio of operating profits before amortisation of
intangible assets and profit on disposal of joint venture to net fee income)
remains healthy at 19.1%, although this has reduced from 26.2% last year, it
clearly demonstrates that our cost base has been prudently managed in order to
align the cost structure of the business to the reduced trading levels we are
currently experiencing. Staff numbers have been reduced by 12% since the start
of 2009.
After accounting for the profit on disposal of joint venture (see below) the
Group's profit from operations for the period totalled GBP2.50m (2008:
GBP3.27m), down by 23.6% from the corresponding period last year.
Joint Venture (JV)
During the period the Group disposed of its Middle East JV for a total cash
consideration of GBP2.2m net of foreign taxes. The JV was set up in 2001 as a
resource and project service provider within the telecommunications and IT
sector, originally operating in Saudi Arabia but successfully establishing
itself in Iran, UAE, Pakistan and Algeria. The Group has recognised a profit on
disposal of GBP0.4m. In the corresponding period in 2008 the Group's share of
profits from the joint venture amounted to GBP0.24m.
We maintain a 50:50 partnership with our joint venture partners located in
Dubai, to provide recruitment services in the Middle East (excluding Saudi
Arabia, Iran and Algeria).
Profit before Taxation
The Group's strong cash generation in the period has resulted in a much reduced
net borrowings position. This reduction in borrowings, together with lower
interest rates has resulted in net finance costs being reduced by 54% to
GBP0.25m (2008: GBP0.56m).
After finance expenses and the profit on disposal of the JV, profit before
taxation for the period has been reduced by 25.4% to GBP2.20m (2008: GBP2.95m).
Networkers International Plc
Chief Executive Officer's Report (continued)
Balance Sheet
The Group's balance sheet continues to strengthen with net assets increasing to
GBP15.8m (June 2008: GBP12.4m). The Group's total assets have been reduced to
GBP33.9m (June 2008: GBP44.6m) as a consequence of reduced trading activities
resulting in a lower trade receivables figure. The Group's total liabilities
have been reduced to GBP18.1m (June 2008: GBP32.2m) primarily as a result of the
GBP14.1m reduction in net borrowings.
During the six month period, the Group has repaid GBP4.8m of its term loan
including an early repayment of GBP3m. It is anticipated that the remaining term
loan balance of GBP4.5m will be repaid in full within the next 12 months, a year
earlier than its scheduled repayment date. The original term loan of GBP16m was
taken out in December 2006 to acquire MSB International.
In addition to the repayment of the term loan, the Group has reduced its invoice
discounting balance by GBP2.6m to GBP0.68m.
The Group has also embarked upon a share buy back program. Consequently, the
Group has acquired treasury shares totalling GBP0.2m.
Strategy
We continue with our strategy to develop the NetworkersMSB trading brand and to
raise awareness of the values of the Group. We remain committed to building and
developing strong relationships with our key global clients and to provide them
with local multi sector recruitment services from our overseas offices.
Our commitment to further increase our presence in emerging markets is
demonstrated by the opening of an additional office during the period in China.
Furthermore, we plan to open an additional three international offices during
the second half of the year. With these new openings we will have 16 offices in
11 countries by the financial year end.
Whilst the UK staffing sector remains challenging, we are optimistic that
opportunities exist for medium term growth in the UK and therefore we retain our
UK strategy of focusing on higher value and higher margin business as well as
maintaining our investment in our public sector division.
We continue to prudently manage our cost base but are also mindful of ensuring
that we remain well placed to exploit opportunities when market conditions do
improve.
Current trading and outlook
Overall, the first half year has proved to have been a challenging period and
the trading environment remains difficult. However, our international business
continues to show some resilience, with trading conditions reasonably stable.
The pace of decline in the UK also appears to have slowed in recent weeks with
some stability now being seen in many business streams.
With net borrowings now reduced to below GBP3m, together with our profitable
trading, solid balance sheet and strong cash generation, the Group has a sound
platform to continue to operate successfully throughout the current climate.
Spencer Manuel
CEO
4 September 2009
Networkers International Plc
Consolidated income statement for the six month period to 30 June 2009
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | 6 months | | 6 months | | 12 months |
| | | to 30 | | to 30 | | to |
| | | June | | June | | 31 December |
| | Note | 2009 | | 2008 | | 2008 |
| | | Unaudited | | Unaudited | | Audited |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | GBP000 | | GBP000 | | GBP000 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Revenue | | 69,188 | | 83,094 | | 163,425 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Cost of Sales | | (57,711) | | (70,383) | | (137,364) |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Gross profit | | 11,477 | | 12,711 | | 26,061 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Administrative expenses | | (9,382) | | (9,441) | | (19,309) |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Profit on disposal of joint venture | | 402 | | - | | - |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Profit from operations | | 2,497 | | 3,270 | | 6,752 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Finance income | | 5 | | 100 | | 43 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Finance expense | | (254) | | (664) | | (1,465) |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Share of post tax (loss) / profit of | | (53) | | 240 | | 240 |
| joint venture | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Profit before taxation | | 2,195 | | 2,946 | | 5,570 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Tax expense | | (751) | | (986) | | (2,114) |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Profit for the period | | 1,444 | | 1,960 | | 3,456 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Attributable to: | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| - Equity holders of the parent | | 1,444 | | 1,960 | | 3,462 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| - Minority Interest | | - | | - | | (6) |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | 1,444 | | 1,960 | | 3,456 |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | _______ | | _______ | | _______ |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Earnings per share | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Basic | 2 | 1.56 p | | 2.13 p | | 3.75 p |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| Diluted | 2 | 1.54 p | | 2.04 p | | 3.59 p |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
| | | | | | | |
+---------------------------------------+------+-----------+--+-----------+--+-------------+
Networkers International Plc
Consolidated statement of comprehensive income for the six month period ended 30
June 2009
+---------------------------------------------+-----------+---+-----------+--+------------+
| | 6 months | | 6 months | | 12 month |
| | Unaudited | | Unaudited | | Audited |
| | to 30 | | to 30 | | to 31 Dec |
| | June 2009 | | June 2008 | | 2008 |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | GBP000 | | GBP000 | | GBP000 |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| Profit for the period | 1,444 | | 1,960 | | 3,456 |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| Other comprehensive income: | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| Exchange difference on retranslation of | (267) | | (238) | | 777 |
| foreign operations | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | _______ | | _______ | | _______ |
+---------------------------------------------+-----------+---+-----------+--+------------+
| Total comprehensive income for the period | 1,177 | | 1,722 | | 4,233 |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | _______ | | _______ | | _______ |
+---------------------------------------------+-----------+---+-----------+--+------------+
| Total comprehensive income attributable to: | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| - Equity holders of the parent | 1,177 | | 1,722 | | 4,239 |
+---------------------------------------------+-----------+---+-----------+--+------------+
| - Minority Interest | - | | - | | (6) |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | _______ | | _______ | | _______ |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | 1,177 | | 1,722 | | 4,233 |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | _______ | | _______ | | _______ |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
| | | | | | |
+---------------------------------------------+-----------+---+-----------+--+------------+
Networkers International Plc
Consolidated balance sheet as at 30 June 2009
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
| | At 30 June | | At 30 | | At 31 Dec |
| | 2009 | | June | | 2008 |
| | Unaudited | | 2008 | | Audited |
| | | | Unaudited | | |
+-------------------------------------------+------------+---+------------+--+------------+
| | GBP000 | | GBP000 | | GBP000 |
+-------------------------------------------+------------+---+------------+--+------------+
| Assets | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Non Current Assets | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Intangible assets | 4,866 | | 4,979 | | 4,933 |
+-------------------------------------------+------------+---+------------+--+------------+
| Property, plant and equipment | 311 | | 355 | | 419 |
+-------------------------------------------+------------+---+------------+--+------------+
| Deferred tax asset | 555 | | 614 | | 533 |
+-------------------------------------------+------------+---+------------+--+------------+
| Investment in equity accounted joint | - | | 1,791 | | 58 |
| ventures | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total non current assets | 5,732 | | 7,739 | | 5,943 |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Current Assets | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Trade and other receivables | 25,236 | | 35,144 | | 32,284 |
+-------------------------------------------+------------+---+------------+--+------------+
| Current tax assets | 602 | | 121 | | - |
+-------------------------------------------+------------+---+------------+--+------------+
| Other financial assets | 68 | | 55 | | - |
+-------------------------------------------+------------+---+------------+--+------------+
| Cash and cash equivalents | 2,246 | | 1,555 | | 1,732 |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total current assets | 28,152 | | 36,875 | | 34,016 |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Non-current assets classified as held for | - | | - | | 1,745 |
| sale | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total assets | 33,884 | | 44,614 | | 41,704 |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Liabilities | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Current Liabilities | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Trade and other payables | (12,261) | | (13,231) | | (13,112) |
+-------------------------------------------+------------+---+------------+--+------------+
| Current tax liabilities | - | | - | | (462) |
+-------------------------------------------+------------+---+------------+--+------------+
| Loans and borrowings | (4,069) | | (11,118) | | (6,996) |
+-------------------------------------------+------------+---+------------+--+------------+
| Other financial liabilities | (214) | | - | | (127) |
+-------------------------------------------+------------+---+------------+--+------------+
| Provisions | (112) | | (141) | | (111) |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total current liabilities | (16,656) | | (24,490) | | (20,808) |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Non current liabilities | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Loans and borrowings | (1,096) | | (7,481) | | (5,639) |
+-------------------------------------------+------------+---+------------+--+------------+
| Provisions | (299) | | (269) | | (299) |
+-------------------------------------------+------------+---+------------+--+------------+
| Other financial liabilities | - | | - | | (136) |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total non current liabilities | (1,395) | | (7,750) | | (6,074) |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total liabilities | (18,051) | | (32,240) | | (26,882) |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | _______ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| Total Net Assets | 15,833 | | 12,374 | | 14,822 |
+-------------------------------------------+------------+---+------------+--+------------+
| | _______ | | _______ | | ________ |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
| | | | | | |
+-------------------------------------------+------------+---+------------+--+------------+
Networkers International Plc
Consolidated balance sheet as at 30 June 2009 (continued)
+--------------+------------+--------+-----------+--------+----------+
| | | | | | |
| | At 30 | | At 30 | | At 31 |
| | June | | June | | Dec |
| | 2009 | | 2008 | | 2008 |
| | Unaudited | | Unaudited | | Audited |
+--------------+------------+--------+-----------+--------+----------+
| | GBP000 | | GBP000 | | GBP000 |
| | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Equity | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Share | 933 | | 921 | | 922 |
| capital | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Share | 18 | | - | | 5 |
| premium | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Retained | 13,943 | | 11,197 | | 12,667 |
| earnings | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Foreign | 263 | | (420) | | 530 |
| exchange | | | | | |
| reserve | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Reverse | 676 | | 676 | | 676 |
| acquisition | | | | | |
| reserve | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| | _______ | | _______ | | _______ |
+--------------+------------+--------+-----------+--------+----------+
| | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Attributable | 15,833 | | 12,374 | | 14,800 |
| to equity | | | | | |
| holders of | | | | | |
| the parent | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Minority | - | | - | | 22 |
| Interest | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| | _______ | | _______ | | _______ |
+--------------+------------+--------+-----------+--------+----------+
| | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| Total | 15,833 | | 12,374 | | 14,822 |
| equity | | | | | |
+--------------+------------+--------+-----------+--------+----------+
| | _______ | | _______ | | ________ |
+--------------+------------+--------+-----------+--------+----------+
Networkers International Plc
Consolidated cash flow statement for the period ended 30 June 2009
+-------------------------------------------+------+------------+--+------------+--+------------+
| | Note | 6 months | | 6 months | | 12 months |
| | | to | | to | | to 31 |
| | | 30 June | | 30 June | | December |
| | | 2009 | | 2008 | | 2008 |
| | | Unaudited | | Unaudited | | Audited |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | GBP000 | | GBP000 | | GBP000 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash flow from operating activities | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Profit before taxation | | 2,195 | | 2,946 | | 5,570 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Adjustments for: | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Share of loss/ (profit) in joint venture | | 53 | | (240) | | (240) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Profit on disposal of joint venture | | (402) | | - | | - |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Depreciation | | 88 | | 142 | | 199 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Amortisation of intangibles | | 93 | | 62 | | 197 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Equity settled share based payments | | 14 | | 41 | | 136 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Movement on fair value of derivatives | | (49) | | (90) | | 228 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Finance income | | (5) | | (10) | | (43) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Finance expense | | 303 | | 664 | | 1,237 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash flows from operating activities | | | | | | |
| before changes in working capital and | | 2,290 | | 3,515 | | 7,284 |
| provisions | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Decrease / (increase) in debtors | | 6,688 | | (2,216) | | 1,480 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| (Decrease) / increase in creditors | | (691) | | 1,695 | | 1,342 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Decrease in provisions | | - | | - | | (10) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash flows generated from operations | | 8,287 | | 2,994 | | 10,096 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Income taxes paid | | (1,857) | | (887) | | (945) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Net cash flows from operating activities | | 6,430 | | 2,107 | | 9,151 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash flow from investing activities: | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Interest received | | 5 | | 10 | | 43 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Purchase of property, plant and equipment | | (31) | | (164) | | (370) |
| & Intangibles | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Payments to acquire investment in joint | | (56) | | - | | - |
| venture | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Net proceeds from disposal in joint | | 2,202 | | - | | - |
| venture | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Net cash used in investing activities | | 2,120 | | (154) | | (327) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash flow from financing activities: | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Interest paid | | (303) | | (664) | | (1,237) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| (Repayment) / drawdown of invoice | | (2,627) | | 139 | | (3,983) |
| discounting | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Repayment of bank borrowings | | (4,843) | | (1,843) | | (3,686) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Issue of share capital | | 25 | | - | | 6 |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Purchase of treasury shares | | (214) | | - | | - |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Net cash used in financing activities | | (7,962) | | (2,368) | | (8,900) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Exchange gains/(losses) on cash and cash | | | | | | |
| equivalents | | (74) | | (30) | | (192) |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Net increase / (decrease) in cash & cash | | 514 | | (445) | | (268) |
| equivalents | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash and cash equivalents at beginning of | | 1,732 | | 2,000 | | 2,000 |
| period | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
| Cash and cash equivalents at end of | 3 | 2,246 | | 1,555 | | 1,732 |
| period | | | | | | |
+-------------------------------------------+------+------------+--+------------+--+------------+
| | | ______ | | ______ | | ______ |
+-------------------------------------------+------+------------+--+------------+--+------------+
Networkers International Plc
Consolidated Statement of Changes in Equity
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | | | | | | | |
| | | Share | Reverse | | Foreign | | |
| | Share | Premium | Acquisition | Retained | Exchange | Minority | Total |
| | Capital | Account | Reserve | | Reserve | Interest | Equity |
| | GBP000 | GBP000 | GBP000 | Earnings | GBP000 | GBP000 | GBP000 |
| | | | | GBP000 | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Balance at 1 | | | | | | | |
| January 2008 | 921 | - | 676 | 9,149 | (103) | - | 10,643 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Total | | | | | | | |
| comprehensive | - | - | - | 1,960 | (238) | - | 1,722 |
| income for the | | | | | | | |
| period | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Share based | | | | | | | |
| payment charge | - | - | - | 41 | - | - | 41 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Deferred tax on | | | | | | | |
| share based | - | - | - | (32) | - | - | (32) |
| payment charge | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Transfer | | | | | | | |
| between | - | - | - | 79 | (79) | - | - |
| reserves | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | ________ | ________ | ________ | _______ | ________ | _______ | _______ |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Balance at 30 | | | | | | | |
| June 2008 | 921 | - | 676 | 11,197 | (420) | - | 12,374 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Total | | | | | | | |
| comprehensive | - | - | - | 1,502 | 1,015 | (6) | 2,511 |
| income for the | | | | | | | |
| period | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Share based | | | | | | | |
| payment charge | - | - | - | 57 | - | - | 57 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Deferred tax on | | | | | | | |
| share based | - | - | - | (154) | - | - | (154) |
| payment charge | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | | | | | | | |
| Issue of shares | 1 | 5 | - | - | - | - | 6 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Transfer | | | | | | | |
| between | - | - | - | 65 | (65) | - | - |
| reserves | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Minority | | | | | | | |
| Interest | - | - | - | - | - | 28 | 28 |
| acquisition | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | ________ | ________ | ________ | _______ | ________ | _______ | _______ |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Balance at 31 | | | | | 530 | | 14,822 |
| December 2008 | 922 | 5 | 676 | 12,667 | | 22 | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Total | | | | | | | |
| comprehensive | - | - | - | 1,444 | (267) | - | 1,177 |
| income for the | | | | | | | |
| period | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Share based | | | | | | | |
| payment charge | - | - | - | 14 | - | - | 14 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Deferred tax on | | | | | | | |
| share based | - | - | - | 32 | - | - | 32 |
| payment charge | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | | | | | | | |
| Issue of shares | 11 | 13 | - | - | - | - | 24 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Reclassification | | | | | | | |
| of minority | - | - | - | - | - | (22) | (22) |
| interest | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Purchase of | | | | | | | |
| treasury shares | - | - | - | (214) | - | - | (214) |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | ________ | ________ | ________ | _______ | ________ | _______ | _______ |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| Balance at 30 | | | | | | | |
| June 2009 | 933 | 18 | 676 | 13,943 | 263 | - | 15,833 |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | ________ | ________ | ________ | _______ | ________ | _______ | _______ |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
| | | | | | | | |
+------------------+----------+----------+-------------+----------+----------+----------+---------+
Networkers International Plc
Notes to the accounts
1 Basis of preparation
This financial information has been prepared using the recognition and
measurement principles of International Accounting Standards, International
Financial Reporting Standards and Interpretations adopted for use in the
European Union (collectively EU Adopted IFRSs).
The principal accounting policies used in preparing the interim results are
those the Group expects to apply in its financial statement for the year ended
31 December 2009 and are unchanged from those disclosed in the Group's Report
and Financial Statements for the year ended 31 December 2008, except for the
adoption of IAS 1 "Presentation of Financial Statements" (Revised).
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to
present a Statement of Changes in Equity as a primary statement and introduces
the possibility of either a single Statement of Comprehensive (combining the
Income Statement and a Statement of Comprehensive Income) or to retain the
Income Statement with a supplementary Statement of Comprehensive Income. The
second option has been adopted by the Group in the preparation of the interim
financial statements. As this standard is concerned with presentation only it
does not have any impact on the results or net assets of the Group.
The financial information for the six months ended 30 June 2009 and the six
months ended 30 June 2008 is unaudited and does not constitute the group's
statutory financial statements for those periods. The comparative financial
information for the full year ended 31 December 2008 has, however, been derived
from the audited statutory financial statement for that period. A copy of those
statutory financial statements has been delivered to the Registrar of Companies.
The auditors' report on those accounts was unqualified, did not include
references to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and did not contain a statement under
section 237(2)-(3) of the Companies Act 1985.
The Board of Directors approved this interim report on 4 September 2009.
Networkers International Plc
Notes to the accounts (Continued)
2 Earnings per share
The calculation of basic earnings per share is based on the profit after
taxation and minority interests.
+---------------------------------------+------------+-----------+-------------+
| | | | |
| | 6 months | 6 months | 12 months |
| | ended | ended | ended |
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+---------------------------------------+------------+-----------+-------------+
| | | | |
+---------------------------------------+------------+-----------+-------------+
| Numerator | | | |
+---------------------------------------+------------+-----------+-------------+
| Earnings used for calculations of | | | |
| basic and diluted EPS | 1,444 | 1,960 | 3,456 |
+---------------------------------------+------------+-----------+-------------+
| | ________ | ________ | ________ |
+---------------------------------------+------------+-----------+-------------+
+---------------------------------------+------------+------------+-------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
| | Number | Number | Number |
+---------------------------------------+------------+------------+-------------+
| | | | |
+---------------------------------------+------------+------------+-------------+
| Denominator | | | |
+---------------------------------------+------------+------------+-------------+
| Weighted average number of shares | 92,594,410 | 92,115,377 | 92,161,952 |
| used in basic EPS | | | |
+---------------------------------------+------------+------------+-------------+
| Exercise of options | 1,474,140 | 4,202,325 | 4,044,726 |
+---------------------------------------+------------+------------+-------------+
| | ________ | ________ | ________ |
+---------------------------------------+------------+------------+-------------+
| | | | |
| Weighted average number of shares | 94,068,550 | 96,317,702 | 96,206,678 |
| used in diluted EPS | | | |
+---------------------------------------+------------+------------+-------------+
| | ________ | ________ | ________ |
+---------------------------------------+------------+------------+-------------+
| | | | |
+---------------------------------------+------------+------------+-------------+
| Basic (pence) | 1.56p | 2.13p | 3.75p |
+---------------------------------------+------------+------------+-------------+
| | ________ | ________ | ________ |
+---------------------------------------+------------+------------+-------------+
| | | | |
+---------------------------------------+------------+------------+-------------+
| Diluted (pence) | 1.54p | 2.04p | 3.59p |
+---------------------------------------+------------+------------+-------------+
| | ________ | ________ | ________ |
+---------------------------------------+------------+------------+-------------+
| | | | |
+---------------------------------------+------------+------------+-------------+
The number of anti dilutive share options excluded from the calculations is
1,920,000 (2008 - 50,000)
Networkers International Plc
Notes to the accounts (Continued)
3 Reconciliation of Cash and cash equivalents
+--------------------------------------------+-----------+-----------+-----------+
| | | | |
| | 30 June | 30 June | 31 Dec |
| | 2009 | 2008 | 2008 |
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+-----------+-----------+-----------+
| | | | |
+--------------------------------------------+-----------+-----------+-----------+
| Cash available upon demand | 2,246 | 1,573 | 1,732 |
+--------------------------------------------+-----------+-----------+-----------+
| Bank overdrafts | - | (18) | - |
+--------------------------------------------+-----------+-----------+-----------+
| | ______ | ______ | ______ |
+--------------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents | 2,246 | 1,555 | 1,732 |
+--------------------------------------------+-----------+-----------+-----------+
| | ______ | ______ | ______ |
+--------------------------------------------+-----------+-----------+-----------+
4Payment of Dividend
The Directors do not recommend the payment of an interim dividend for the six
months ended 30 June 2009.
These interim results are available from the Group's website
www.networkersint.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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