TIDMRTC
RNS Number : 1749G
RTC Group PLC
02 March 2015
2 March 2015
RTC Group Plc
("RTC", "the Company" or "the Group")
Audited results for the year ended 31 December 2014
RTC Group Plc (AIM: RTC.L), a support services group which
predominantly provides recruitment services, is pleased to announce
its audited results for the year ended 31 December 2014.
Highlights
-- Group revenue up 4% to GBP51m (2013: GBP49m)
-- Net fee income increased 10% to GBP10.18m (2013: GBP9.23m)
-- Profit from operations up 27% to GBP1.11m (2013: GBP0.87m)
-- Profit before tax ahead by 38% to GBP1.02m (2013: GBP0.74m)
-- Earnings per share (basic) up 56% to 5.92p (2013: 3.79p)
During the year the Company paid a 2014 interim dividend of
GBP67,558 (2013: GBPNil) to its shareholders, which represented a
payment of 0.5p per share (2013: Nil). The Directors have
recommended a final dividend of GBP135,116, which represents a
further 1p per share (2013: GBPNil) giving a total dividend of 1.5p
for the year ended 31 December 2014. A resolution regarding this
recommended final dividend is to be considered at the Company's
forthcoming 2015 Annual General Meeting, which is due to be held on
22 April 2015. If shareholders approve the recommended final
dividend, then this will be paid on 24 April 2015 to all holders of
shares who are on the register of members at the close of business
on 27 March 2015, with an ex-dividend date of 26 March 2015.
Commenting on the results Andy Pendlebury, CEO said:
"I am extremely proud of the progress the Group has made during
2014. We have continued to grow underlying profit and shareholder
value ahead of much of our competition, as can be seen from our
profit and earnings per share progression and each of our core
recruitment businesses are well positioned to capitalise on the
growth which is anticipated across all our respective markets.
We have now established an extremely dynamic and innovative
culture across the Group and we believe that this, coupled with
giving all of our businesses the freedom they need to compete in
highly dynamic markets will ensure we continue to attract the
brightest and most ambitious people, which is vital as we pursue
our future growth plans.
Finally, our continued success is a direct result of the hard
work, support and unparalleled commitment of everybody employed in
our business and the Group Board is extremely proud of our
collective achievement."
Enquiries:
RTC Group Plc 01332 861 835
Bill Douie, Chairman
Andy Pendlebury, Chief Executive
Allenby Capital Limited - Nominated
Adviser & Broker 020 3328 5656
Jeremy Porter / Alex Brearley
Chairman's statement
For the year ended 31 December 2014
I am pleased to present the final report for the year to 31st
December 2014.
Group
2014 has again been a year of growth both in turnover and
profit. As a result, although turnover growth was modest at GBP51m,
representing an increase of 4% over 2013, we have achieved Group
operating profits of GBP1.11m and a Group pre-tax profit of
GBP1.02m, increases of 27% and 38% respectively versus the previous
year. This is a clear indication of major increases in efficiency
coupled with reductions in interest charges arising from more
effective credit control.
Net cash from operating activities 'free-cash' has markedly
increased partly as a result of increased profitability and partly
arising from improvements in terms of trade, particularly in debtor
days. In pursuance of Group strategy we have recommenced the
payment of dividends and have made an acquisition for a cash
consideration of GBP891,000.
Capital investment
Our enhanced trading performance has enabled us to continue
carefully focused increases in capital expenditure with a
particular emphasis on improvements in IT.
Acquisition
On 28th November we completed the purchase of RIG Energy
Limited, a provider of contract and permanent gas engineers,
extending and diversifying the range of safety critical clients
served by Ganymede. RIG Energy has now been successfully integrated
into Ganymede and has been rebranded Ganymede Energy. It achieved
operating profits in the year to 31st December 2014 of GBP218,000
of which GBP43,000 were in December and are included in RTC Group's
consolidated results for 2014.
Dividends
As stated in my report for the year to December 2013, we have
established a policy of paying dividends to shareholders from free
cash flow. In pursuance of this objective, during the year, the
share premium account has been cancelled and the reserve
transferred to the profit and loss account in accordance with
approval given at our last Annual General Meeting. Your Directors
are satisfied that profitability, free cash flow and shareholder
equity are now sufficiently robust to permit a modest return to the
dividend list . During the year the Company paid a 2014 interim
dividend of GBP67,558 (2013: GBPNil) to its shareholders, which
represented a payment of 0.5p per share (2013: Nil). Your Directors
have now recommended a further final dividend of GBP135,116 (1p per
share), making a total of 1.5p per share for the year ended 31
December 2014 (2013: GBPNil). A resolution regarding this
recommended final dividend is to be considered at the Company's
forthcoming 2015 Annual General Meeting, which is due to be held on
22 April 2015. If shareholders approve the recommended final
dividend, then this will be paid on 24 April 2015 to all holders of
shares who are on the register of members at the close of business
on 27 March 2015, with an ex-dividend date of 26 March 2015.
The Group Board
During the year, John White wished to pursue other business
interests and consequently resigned his position as a director. I
would like to thank John for his strong support during difficult
times.
We have been fortunate in securing the services of Tim Jackson
as a Non-Executive director. Tim has particularly relevant
experience in recruitment as past finance director of Staffline
Group Plc in a period of fast growth both organically and by
acquisition. In addition to his role as non-executive director, Tim
is a member of the remuneration and audit committees and provides
help and advice in the identification and evaluation of potential
acquisitions.
Outlook
In addition to the use of free cash flow to finance an
acquisition and return to the payment of dividends working capital
improvements in ATA have permitted a significant investment in
additional consultants.
As previously announced, Ganymede has been successful in
achieving a further and significantly enhanced award as a result of
the Network Rail CP5 procurement process. Ganymede will enter into
a Contract with Network Rail to provide contingent labour services
including the supply of safety critical, track and E&P
(electrification and plant) resources in the West, South West and
North East England, the Midlands and Wales. The Contract will run
for a period of five years from April 2015 and has an estimated
order book value of between GBP80m to GBP100m. Following this
Contract, Ganymede will be one of Network Rail's largest suppliers
of contingent labour to their maintenance and renewals programme.
The outlook for other Ganymede rail business is promising and
Ganymede Energy has made a strong start and is expected to perform
well in 2015.
GSS continues to support NATO operations in Afghanistan through
its contract with Kellogg Brown and Root (KBR) and whilst, as
anticipated, the number of personnel is reducing, the withdrawal
will be more gradual than originally anticipated and our support
will continue into 2015 and possibly 2016. The business is also
securing new contracts with KBR in other regions and is in
discussions with a range of clients to provide work force solutions
on a range of non-military opportunities.
The Derby Conference Centre (DCC) continues to provide our
prestigious Head Office location and is making steady profits
providing facilities for us and other business users.
Although the global situation must continue to cause some
apprehension, the UK economy continues to perform surprisingly well
and we are confident that 2015 will see further growth.
Employees
As always I should like to thank our staff at all levels for
their loyalty, hard work and enthusiasm.
W J C Douie 2 March 2015
Chairman
Chief executive's operational and strategic review
For the year ended 31 December 2014
1. Introduction
2014 began on an optimistic note having delivered a very
positive set of results in 2013. Continuing this momentum, the
delivery of another significant year of profit growth, was
therefore the key strategic imperative for the Group Board. I am
delighted to say that our results for this year have exceeded our
original expectations at the beginning of the year.
All subsidiary businesses were profitable, established strong
footholds in their respective markets and collectively delivered,
for the third year in a row, increased sales, gross profit,
operating profit and net cash collection.
I firmly believe that the turnaround plan and strategic actions
set out five years ago by the Group Board to de-risk and rebuild
the Group have achieved their desired effect and the group now has
an extremely exciting future ahead of it.
I have outlined in section 2 below, the key components of the
turnaround plan and strategic actions which were agreed by the
Group Board in 2008.
2. Turnaround/strategic action plan:
In 2007/08 as newly appointed CEO I conducted an in depth review
of the Groups' capabilities, resources and businesses. I identified
a range of strategic issues which were the main obstacles to the
successful growth of the business. Whilst the actions identified as
solutions for each strategic issue would take varying lengths of
time to be fully effective, the chart below captures the underlying
issues, range of actions needed to drive the desired changes and
the outcomes which have enabled the Group to reposition itself as a
highly focused and profitable recruitment Group.
Strategic Action Taken Outcome
Issue
---------------- ------------------------------------------------------------- --------------------------------------
Lack of
vision/mission * Examine core competencies and skills of Group * New mission/vision agreed:
* Discuss with employees and shareholders ambitions for "To create a highly
Group focussed recruitment
Group supplying white
and blue collar personnel
* Establish new long term vision/mission to communicate to a broad range of
to management team and shareholders clients in domestic
and international
markets."
---------------- ------------------------------------------------------------- --------------------------------------
Strategic Issue Action Taken Outcome
--------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------
Brand Strength
* Change Group name * Name change from ATA to RTC Group
* Create new Group and subsidiary logos * Refreshed/
modernised brands
and logos for Group
and subsidiary businesses
--------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------
Subsidiary company
fit: * Commitment by board to revert to focussed recruitment * Group now has 3 core recruitment businesses: ATA, GSS
* Competing not complimentary brands. Group and Ganymede
* Loss making subsidiaries haemorrhaging cash and * Exit non-recruitment activities * Note: whilst non-core, the Derby conference centre,
restraining reinvestment of other subsidiary profits. which is Group headquarters, generates additional
revenue from spare capacity.
* Complement existing ATA brand with international
operation
* All businesses trade profitably.
* Invest in the growth of Ganymede
--------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------
Senior management
team lacking depth * Incumbent key management team changed * Each subsidiary business has industry experienced
and breadth of experience managing directors with full profit and loss
to grow Group to full responsibility and accountability
potential. * Combination of internal promotion of existing
management and appointment of external management
* Subsidiary structures with succession plans and
training programmes in place
* Senior management, training and development programme
established
* Coaching of subsidiary MDs on continual basis by
Group CEO
--------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------
Business mix exposure Business Shape Change:
across: clients, geographic
delivery, margin type
and order book.
--------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------
5 years Now
ago
--------------------------------------------------------------- ----------------------- ------------------ -----------------
Client
SME 70 30
Large 30 70
--------------------------------------------------------------------------------------- ------------------ -----------------
Net Fee
Perm 80 30
Temp 20 70
--------------------------------------------------------------------------------------- ------------------ -----------------
Location
UK 100 75
Overseas 0 25
--------------------------------------------------------------------------------------- ------------------ -----------------
Order
* Focus on developing business with better mix of SME book
and Blue Chip clients Spot 90 40
Booked 10 60
* Shift of emphasis from permanent to temporary
employment business
* Establish international operation
* Seek out long term order book opportunities
--------------------------------------------------------------------------------------- -------------------------------------------------------------- ------------------ -----------------
It is especially pleasing that the Group achieved this
challenging turnaround plan in the midst of a severe recession
hitting the World economy and in particular the United Kingdom
recruitment sector, which was brutally affected. Whilst many in the
sector failed to survive the severity of its impact, RTC Group has
doubled revenue, significantly improved its balance sheet and laid
the foundations for the next phase of the Group's growth plan.
3. Group Structure
We now have a very clear and focussed structure with three
highly successful and complementary recruitment brands supported by
our Group central services unit, located at our headquarters, the
Derby Conference Centre (DCC).
4. Group business model
Our business model centres around establishing each of our core
recruitment businesses as strong independent market leaders in
their respective sectors. In addition, the businesses leverage
their collective capabilities by collaborating on a range of
domestic and international projects with clients
looking to reduce transaction costs and minimise supply
complexity. Our business model is attracting a significant amount
of interest and we are currently exploring a range of opportunities
with potential clients seeking to establish single-source solutions
on large scale contracts.
The subsidiary businesses are provided with central service
support across all aspects of financial accounts and management,
marketing, legal/human resources and information technology and
systems management, all centrally located at our headquarters, the
DCC. The DCC also attracts external revenue by utilising spare
capacity for other business users, sub-lease of office space and
through facilitating a range of regional and national events.
Whilst not material in comparison to overall Group revenue and
profit, the DCC has been transformed by its MD Mike Ebbitt from a
cost centre constantly draining Group cash into a unique facility
providing first class headquarter accommodation and profitable
revenue from third party sources.
A diagram showing the Group's business model is set out in our
Annual Report 2014 which will be made available Company's website
at www.rtcgroupplc.co.uk later today.
5. Operational Review
All Group businesses had another successful year of trading. The
head count investments made in our ATA subsidiary during the latter
half of 2013 began to deliver encouraging results during 2014 and
given the positive UK economic recovery ATA has continued to invest
in the recruitment of additional consultants throughout the year.
In addition, due to wide spread optimism about the pace of the UK
recovery, ATA will seek to continue investing in the growth of both
its regional branch network and major account business throughout
2015.
GSS continues to support NATO through its relationship with our
client, Kellogg Brown and Root, and whilst there has been a
continued demobilisation of international military personnel from
Afghanistan over the past year, a larger than anticipated GSS
support structure remained in Afghanistan throughout 2014. It is
also anticipated that this will continue throughout 2015 and
potentially into 2016. In addition GSS has been securing additional
military support contracts in other NATO supported regions and
non-military support operations across the Middle East, Africa and
Europe.
Ganymede continues to position itself as a leading supplier of
safety critical contingent labour to the rail industry and
following the recent award relating to part of CP5, is now set to
become one of network rails' largest strategic partners for its
maintenance and renewal programme. Growth in 2014 was again well
ahead of our expectations and the new five year work programme with
network rail alongside its other rail sector business will see
Ganymede establish itself as one of the UK's most respected
contingent labour suppliers to the rail industry. Furthermore the
acquisition of RIG Energy towards the end of 2014 enables Ganymede
to diversify into the energy sector and given the size of the smart
meter rollout programme expected to be completed by 2020, we are
very optimistic about Ganymede's future growth prospects.
The DCC had another promising year and delivered a healthy
return on activities for the Group. In addition to providing a
unique home for our Group's headquarters, the DCC hosted a number
of high profile events during 2014 and continues to establish its
reputation as one of the major providers of facilities for business
users in the Midlands.
6. Long term value plan
We believe that the long-term support and commitment of all our
stakeholders is a vital component to the success of the Group as we
enter the next phase of our growth plan. We have therefore
established a long-term value plan for each stakeholder Group to
measure our progress in pursuit of this commitment.
Long term value plan
-----------------------------------------------------------------------------
Stakeholder Objectives
-------------- -------------------------------------------------------------
Shareholders
* Improve earnings per share year-on-year
* Progressively increase dividend payment
* Invest in the long-term capability of the Group
* Balance risk/reward in subsidiaries
* Complement strong organic growth with value based
acquisitions
-------------- -------------------------------------------------------------
Employees
* Provide an entrepreneurial environment for employees
to achieve personal and business goals and ambitions
* Offer benchmark reward packages to attract the
highest calibre of talent
* Accelerated career plans for brightest and most
promising employees
-------------- -------------------------------------------------------------
Clients
* Seek to establish sensible long-term strategic
partnerships
* Provide competitive but profitable margins for
contingent recruitment activities
* Support both domestic and international clients for
continuity of business
-------------- -------------------------------------------------------------
Candidates
* Offer local and international permanent and temporary
opportunities for career development
* Provide confidential support and career management to
all candidates
* Treat candidates with respect and recognise their
value to the Group
-------------- -------------------------------------------------------------
Suppliers
* Establish long term supply agreements for competitive
pricing with our supply chain
* Involve suppliers in strategic evaluation of client
opportunities/challenges
* Pay our suppliers promptly to secure their long term
commitment
-------------- -------------------------------------------------------------
7. Summary
I am extremely proud of the progress that the Group has made
during 2014. We continue to seek to grow underlying profit and
shareholder value ahead of much of our competition, as can be seen
from our key performance indicators on page 14 of our annual
report, and each of our core recruitment businesses are well
positioned to capitalise on the growth which is anticipated across
all of our respective markets.
We have now established an extremely dynamic and innovative
culture across the Group. We believe that giving all of our
businesses the freedom they need to compete in highly dynamic
markets will allow us to continue to attract the brightest and most
ambitious people, which is vital as we pursue our future growth
plans.
Finally, our continued success is a direct result of the hard
work, support and unparalleled commitment of everybody employed in
our business and the Group Board is extremely proud of our
collective achievement.
Andy Pendlebury
Group Chief Executive 2 March 2015
Finance Director's statement
For the year ended 31 December 2014
Financial highlights
In the year ended 31 December 2014, Group revenue increased by
4% to GBP51m (2013:GBP49m) reflecting good performances in all
Group businesses.
Revenue growth has flowed through to an overall profit from
operations of GBP1.11m, an increase of 27% on 2013. Gross margin
was 20% (2013: 19%), reflecting efficiencies across all of our
businesses.
Acquisitions
On 28 November 2014 the Group acquired RIG Energy Limited ("RIG
Energy") for cash consideration of GBP0.9m. RIG Energy is a
specialist engineering recruitment agency which is focussed on
providing domestic and commercial gas engineers. The business has
now been successfully integrated into Ganymede and has performed in
line with our expectations.
The Group will continue to actively monitor and research good
acquisition opportunities that meet our strategic requirements.
Taxation
The total tax charge for the year was GBP218,000 (2013:
GBP224,000). The small variance between this and the expected
charge if a 21% corporation tax rate was applied to the profit for
the year is explained in note 3.
Earnings per share
The basic earnings per share figure is 5.92p (2013: 3.79p)
reflecting the 38% increase in profits before tax in 2014.
Cancellation of share premium
Following the approval of the cancellation of the share premium
account by shareholders at the Company's Annual General Meeting on
21 May 2014, by order of the High Court, the cancellation became
effective on 27 November 2014. Following the cancellation, the
total number of ordinary shares of 1p each in issue remained
unchanged at 13,511,626 shares. The cancellation enhances the
Company's ability to make future distributions to shareholders.
Dividends
During the year the company paid an interim dividend of
GBP67,558 (2013: GBPNil) to its equity shareholders. This
represents a payment of 0.5p (2013: Nil p) per share.
Statement of financial position, cash generation and
financing
The Group balance sheet has strengthened during the year with
the acquisition of RIG Energy creating an intangible asset of
GBP0.7m, in respect of customer lists. Net working capital has been
maintained near 2013 levels at GBP1.2m (2013: GBP1.1m) despite an
increase in turnover, and there is a similar ratio of current
assets to current liabilities of 1.16 (2013: 1.14). The Group's
gearing ratio, which is calculated as total borrowings over net
assets, has fallen to 1.3 (2013: 2.3) and interest cover has
increased to 12.1 (2013: 6.5) which is further evidence of
improvement in the Group's financial position and improved cash
generation during the year.
Post tax cash generation during the year has been strong, with
cash generated from operations of GBP2.3m (2013: GBP0.2m).
Effective credit control succeeded in maintaining levels of working
capital similar to 2013 despite the increase in revenue and the
acquisition of RIG Energy for a cash consideration of GBP0.9m.
It is pleasing to note that as an indicator of the quality of
our earnings, free cash flow as a percentage of our underlying
profit before interest and taxation is 198% (2013: 28%). It is our
intention to continue to invest in our growth and supporting
infrastructure during 2015, which should lead to further reductions
in this percentage.
The Group's current bank facilities include an overdraft of
GBP50,000 and a confidential invoice discounting facility of up to
GBP7.0m with HSBC. Both are renewable annually with the next review
due 28 February 2016. The Group is currently operating well within
its facility cap.
The Board closely monitors the level of facility utilisation and
availability, to ensure that there is sufficient headroom to manage
current operations and support the growth of the business.
The Group continues to be focussed on cash generation and
building a robust balance sheet to support the growth of the
business
Sarah Dye 2 March 2015
Group Finance Director
Consolidated statement of comprehensive income
For the year ended 31 December 2014
2014 2013
Notes Restated
GBP'000 GBP'000
---------------------------------------- ------- ---------- ----------
Revenue 2 50,932 48,817
Cost of sales (40,756) (39,554)
----------------------------------------- ------- ---------- ----------
Gross profit 10,176 9,263
Administrative expenses (9,067) (8,392)
----------------------------------------- ------- ---------- ----------
Profit from operations 1,109 871
Finance expense (91) (135)
----------------------------------------- ------- ---------- ----------
Profit before tax 1,018 736
Tax expense 3 (218) (224)
----------------------------------------- ------- ---------- ----------
Profit and total comprehensive income
for the year 800 512
----------------------------------------- ------- ---------- ----------
Earnings per ordinary share
Basic 4 5.92p 3.79p
----------------------------------------- ------- ---------- ----------
Diluted 4 5.42p 3.69p
----------------------------------------- ------- ---------- ----------
Dividend per share
Paid 0.5p -
----------------------------------------- ------- ---------- ----------
Proposed 1.0p -
----------------------------------------- ------- ---------- ----------
Consolidated statement of changes in equity
For the year ended 31 December 2014
Share Share Capital Share Profit and Total
capital premium redemption based loss account equity
reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2014 135 2,468 50 18 (970) 1,701
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Profit and total
comprehensive
income for the
year - - - - 800 800
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Dividends - - - - (68) (68)
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Share premium
cancellation - (2,468) - - 2,468 -
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Share based payment
reserve - - - 8 - 8
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
At 31 December
2014 135 - 50 26 2,230 2,441
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Share Share Capital Share Profit and Total
capital premium redemption based loss account equity
reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2013 135 2,468 50 - (1,482) 1,171
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Profit and total
comprehensive
income for the
year - - - - 512 512
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Share based payment
reserve - - - 18 - 18
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
At 31 December
2013 135 2,468 50 18 (970) 1,701
---------------------- ---------- ---------- ------------- ---------- --------------- ---------
Cancellation of share premium
Following the approval of shareholders at the Company's Annual
General Meeting on 21 May 2014 of the cancellation of the share
premium account, by order of the High Court, the cancellation
became effective on 27 November 2014. Following the cancellation,
the total number of ordinary shares of 1p each in issue remained
unchanged at 13,511,626 shares.
Consolidated statement of financial position
As at 31 December 2014
2014 2013
GBP'000 GBP'000
--------------------------------------- --------- ---------
Assets
Non-current
Goodwill 132 -
Other intangible assets 662 -
Property, plant and equipment 466 431
Deferred tax asset 62 110
---------------------------------------- --------- ---------
1,322 541
Current
Cash and cash equivalents 41 232
Inventories 19 15
Trade and other receivables 9,267 9,127
---------------------------------------- --------- ---------
9,327 9,374
Total assets 10,649 9,915
---------------------------------------- --------- ---------
Liabilities
Current
Trade and other payables (4,713) (4,230)
Corporation tax (186) (95)
Current borrowings (3,166) (3,867)
(8,065) (8,192)
Non-current liabilities
Creditors falling due after one year
- finance leases (11) (22)
Deferred tax liabilities (132) -
--------------------------------------- --------- ---------
Net assets 2,441 1,701
---------------------------------------- --------- ---------
Equity
Share capital 135 135
Share premium - 2,468
Capital redemption reserve 50 50
Share based payment reserve 26 18
Profit and loss account 2,230 (970)
Total equity 2,441 1,701
---------------------------------------- --------- ---------
The financial statements were approved and authorised for issue
by the Board and were signed on its behalf on 2 March 2015 by:
A M Pendlebury S Dye
Director Director
Consolidated statement of cash flows
For the year ended 31 December 2014
2014 2013
GBP'000 GBP'000
----------------------------------------- --------- ---------
Cash flows from operating activities
Profit from operations 1,109 871
Adjustments for:
Depreciation, loss on disposal and
amortisation 217 184
Employee equity settled share options 8 18
Change in inventories (4) (2)
Change in trade and other receivables 734 (1,068)
Change in trade and other payables 207 245
------------------------------------------ --------- ---------
Cash generated from operations 2,271 248
Income tax paid (80) -
Net cash from operating activities 2,191 248
------------------------------------------ --------- ---------
Cash flows from investing activities
Purchases of property, plant and
equipment (245) (212)
Acquisition of business - cash paid (875) -
Debt acquired on acquisition (391) -
---------
Net cash used in investing activities (1,511) (212)
------------------------------------------ --------- ---------
Cash flows from financing activities (170) (162)
Net cash (outflow) from financing
activities (170) (162)
Net increase/(decrease) in cash
and cash equivalents from operations 510 (126)
------------------------------------------ --------- ---------
Total net (decrease) in cash and
cash equivalents 510 (126)
------------------------------------------ --------- ---------
Cash and cash equivalents at beginning
of period (3,635) (3,509)
------------------------------------------ --------- ---------
Cash and cash equivalents at end
of period (3,125) (3,635)
------------------------------------------ --------- ---------
1. Corporate information and basis of preparation
RTC Group Plc is a public limited company incorporated and
domiciled in England whose shares are publicly traded.
The announcement of results of the Group for the year ended 31
December 2014 was authorised for issue in accordance with a
resolution of the directors on 2 March 2015.
The financial information included in this announcement has been
compiled in accordance with the recognition and measurement
criteria of International Financial Reporting Standards ("IFRS"),
including International Accounting Standards ("IAS") and
interpretations issued by the International Accounting Standards
Board ("IASB") and its committees, and as adopted by the EU. This
announcement does not itself however contain sufficient information
to comply with IFRS.
The accounting policies adopted are consistent with those
described in the annual financial statements for the year ended 31
December 2014. Other than the restatement of gross profit detailed
below, there have been no significant changes in the basis upon
which estimates have been determined, compared to those applied at
31 December 2013 and no change in estimate has had a material
effect on the current period.
Restatement of gross profit
Following a review by the directors of the Group's policy for
presenting costs arising within the recruitment segments against
companies within the same industry the Group has restated the prior
year consolidated statement of comprehensive income in order to
re-allocate certain expenses within cost of sales to administrative
expenses in order to enhance comparability with those companies.
The expenses reallocated to administrative expenses are those not
directly attributable to contractors. The effect of the
re-allocation was to increase administrative expenses for the year
ended 31 December 2013 by GBP3.7m and reduce cost of sales by
GBP3.7m and increasing gross profit by GBP3.7m. There was no change
to reported revenue or profit from operations or earnings per
share. Segment reporting in note 2 has been restated to reflect the
change in basis of allocation.
2. Segment analysis
The Group is a provider of recruitment services and conferencing
services that is based at the Derby Conference Centre. The
recruitment business comprises three distinct business units - ATA
predominantly servicing the UK SME engineering market and a number
of vertical markets; Global Staffing Solutions servicing the
international market and Ganymede Solutions supplying labour into
safety critical environments, mainly rail.
Segment information is provided below in respect of ATA, Global
Staffing Solutions, Ganymede Solutions and the Derby Conference
Centre which, as well as being the head office for the Group,
provides hotel and conferencing facilities.
The Group manages the trading performance of each segment by
monitoring operating contribution and centrally manages working
capital, borrowings and equity.
Revenues are generated from permanent and temporary recruitment
in the Recruitment division. Revenue is analysed by origin of
customer/point of invoicing and as such all recruitment division
revenues are supplied in the United Kingdom. Hotel and conferencing
services are wholly provided in the UK at the Derby Conference
Centre.
All revenues have been invoiced to external customers. During
2014, one customer in the Global Staffing Solutions segment
contributed 10% or more of that segment's revenues being GBP12.2m
(2013: GBP14.8m).
The segmental information for the current reporting period is as
follows:
Recruitment Conferencing
ATA Global Ganymede Derby Conference Total Group
Staffing Solutions Centre
Solutions
2014 2014 2014 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- ------------ ------------ ------------------ -------------
External sales
revenue 23,867 12,772 12,534 1,759 50,932
Cost of sales (18,703) (10,815) (10,446) (792) (40,756)
----------------------- ---------- ------------ ------------ ------------------ -------------
Gross profit 5,164 1,957 2,088 967 10,176
Administrative
expenses (3,858) (1,064) (1,130) (802) (6,854)
Depreciation (128) - (9) (69) (206)
Segment contribution 1,178 893 949 96 3,116
Group costs (2,007)
-------------
Profit from operations per statement of
comprehensive income 1,109
-------------
The segmental information restated for the prior reporting
period is as follows:
Recruitment Conferencing
ATA Global Ganymede Derby Conference Total Group
Staffing Solutions Centre Restated
Solutions
2013 2013 2013 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- ------------ ------------ ------------------ -------------
External sales
revenue 22,500 14,840 9,938 1,539 48,817
Cost of sales (17,875) (12,645) (8,311) (723) (39,554)
----------------------- ---------- ------------ ------------ ------------------ -------------
Gross profit 4,625 2,195 1,627 816 9,263
Administrative
expenses (3,624) (1,270) (837) (678) (6,409)
Depreciation (27) - (8) (78) (113)
Segment contribution 974 925 782 60 2,741
Group costs (1,870)
-------------
Profit from operations per statement of comprehensive
income 871
-------------
All operations are continuing. All assets and liabilities are
held in the United Kingdom.
3. Tax expense
2014 2013
Continuing operations GBP'000 GBP'000
---------------------------------------------------- --------- ---------
Analysis of tax:
Current tax
UK corporation tax 185 95
Adjustment in respect of previous period (15) -
---------------------------------------------------- --------- ---------
170 95
Deferred tax
Origination and reversal of temporary differences 48 129
Tax 218 224
---------------------------------------------------- --------- ---------
Factors affecting the tax expense
The tax assessed for the year is greater than (2013: greater
than) would be expected by multiplying profit on ordinary
activities by the standard rate of corporation tax in the UK of 21
% (2013: 23.5%). The differences are explained below:-
Factors affecting tax expense
2014 2013
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Result for the year before tax 1,018 736
-------------------------------------------- --------- ---------
Profit multiplied by standard rate of tax
of 21% (2013: 23.5%) 214 173
Non-deductible expenses 23 17
Utilisation of losses (29) 34
Adjustment in respect of previous period 10 -
-------------------------------------------- --------- ---------
Tax charge for the year 218 224
-------------------------------------------- --------- ---------
Factors that may affect future tax charges
Estimated losses available to offset against future taxable
profits on continuing operations in the UK amount to approximately
GBP397,000 (2013: GBP449,000).
The provision for deferred tax is calculated based on the tax
rates enacted or substantially enacted at the balance sheet date.
The Chancellor of the Exchequer has announced that the rate of
corporation tax will be reduced each year until 2015 when it will
remain at 20%.
4. Basic and diluted earnings per share
The calculation of basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of all diluted earnings per share is based on
the basic earnings per share adjusted to allow for dilutive
potential ordinary shares.
Basic Diluted
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
Earnings GBP'000 800 512 800 512
----------------------------- ------------ ------------ ------------ ------------
Weighted average number
of shares 13,511,626 13,511,626 14,747,458 13,889,918
----------------------------- ------------ ------------ ------------ ------------
Earnings per share (pence) 5.92p 3.79p 5.42p 3.69p
----------------------------- ------------ ------------ ------------ ------------
5. Dividends
During the year the company paid an interim dividend of
GBP67,558 (2013: GBPNil) to its equity shareholders. This
represents a payment of 0.5p (2013: Nil p) per share. A final
dividend of GBP135,116 (2013: GBPNil) has been proposed but has not
been accrued within these financial statements. This represents a
payment of 1.0p (2013: Nil p) per share.
6. Business combinations
On 28 November 2014 the Company acquired RIG Energy Limited,
based in Milton Keynes, and assumed control by acquiring 100% of
the voting rights. The acquisition met a strategic objective of the
Group in respect of diversification in the supply of labour into
other 'safety critical environments'.
An adjustment was required to the book values of the assets and
liabilities of the business acquired in order to present the net
assets at estimated values in accordance with the Group accounting
policies. The purchase was accounted for as an acquisition.
Goodwill is primarily related to growth expectations, expected
future profitability, the skill and expertise of the acquired
workforce and expected cost synergies. The goodwill that arose from
this acquisition is not expected to be deductible for tax
purposes.
Book value
Fair value
on acquisition adjustment
Value
to Group
GBP'000 GBP'000 GBP'000
----------------------------------------- ---------------- ------------- -----------
Intangible Assets - Customer Contracts - 673 673
Fixtures & Fittings 2 - 2
Trade and other Receivables 841 - 841
Borrowings (391) - (391)
Trade and other Payables (234) - (234)
Deferred Tax Liability - (132) (132)
---------------- ------------- -----------
Net assets at acquisition 218 541 759
Goodwill 132
----------------------------------------- ---------------- ------------- -----------
891
----------------------------------------- ---------------- ------------- -----------
Satisfied by:
Cash 891
----------------------------------------- ---------------- ------------- -----------
Acquisition costs recognised as expenses (included within
administrative expenses) amounted to GBP29,560.
Consideration transferred
The acquisition was settled in cash amounting to GBP891,000
(GBP875,000 was paid on 28 November 2014 and the balance of
GBP16,000 relating to the excess of net assets per the completion
accounts was settled post year end).
Identifiable net assets
The value of the trade and other receivables acquired as part of
the business combination amounted to GBP841,000 which equated to
the gross contractual amount.
Contribution to the Group results
The acquisition contributed post acquisition revenues of
GBP409,000 and profits totalling GBP43,000. If the acquisition had
been made on 1 January 2014 revenues of GBP4,948,000 and profit
from operations before amortisation of intangible assets of
GBP218,000 would have been included and the Group revenues would
have been GBP55,946,000 and the Group profit from operations would
have been GBP1,327,000.
7. Report and accounts
The above financial information does not constitute the
Company's statutory accounts for the years ended 31 December 2014
or 2013 but is derived from those accounts. The auditor has
reported on these accounts; their report was unqualified, did not
draw any matters by way of emphasis without qualifying their report
and did not contain statements under s498 (2) or (3) Companies Act
2006 or equivalent preceding legislation. The statutory accounts
for 2013 have been filed with the Registrar of Companies.
Full audited accounts of RTC Group plc for the year ended 31
December 2014 will be made available on the Company's website at
www.rtcgroupplc.co.uk later today and will be dispatched to
shareholders on 20 March 2015 and then be available from the
Company's registered office:- The Derby Conference Centre, London
Road, Derby, DE24 8UX.
--- Ends---
This information is provided by RNS
The company news service from the London Stock Exchange
END
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